Maine Drops Residency Requirement Over Constitutionality Concerns

When Maine enacted the Marijuana Legalization Act in 2018 the legislature included one of the most stringent residency requirements in the nation.  In order to obtain a license, an applicant had to be majority owned by individuals who were Maine residents for the past four years.  Earlier this week Maine’s Attorney General conceded that the residency requirement was likely unconstitutional and Maine’s Office of Marijuana Policy announced that it would no longer enforce the requirement.

The Attorney General’s Office announced its position on the residency requirement in response to a recent lawsuit.  Wellness Connection, a major player in Maine’s medical marijuana market, sued the state in federal court, arguing that the requirement violated the dormant Commerce Clause of the U.S. Constitution.  The Attorney General stated that the requirement was not likely to survive the constitutional challenge and that he would no longer defend the provision.

The Attorney General’s announcement is the latest twist in what has been a long saga to make Maine’s recreational marijuana program a reality.  Maine voters originally legalized marijuana by passing a ballot initiative in 2016.  The legislature then replaced the initiative with the Marijuana Legalization Act in 2018.  The state’s Governor at the time, Paul LePage, strongly opposed legalizing marijuana, and his administration significantly delayed the roll-out of the state’s recreational marijuana program.  Maine’s current Governor, Janet Mills, has been far more proactive in trying to jumpstart Maine’s recreational marijuana market, though the COVID-19 crisis has caused further delays.

The state’s decision to drop the residency requirement is big news for marijuana companies already in Maine and for companies and investors hoping to enter the Maine marketplace.  For companies already in Maine, the announcement means much-needed access to out-of-state capital.  For out-of-state companies and investors, the announcement means increased access to a budding marketplace.

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