{"id":801,"date":"2020-06-27T20:22:32","date_gmt":"2020-06-28T01:22:32","guid":{"rendered":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/?p=801"},"modified":"2020-06-27T20:31:30","modified_gmt":"2020-06-28T01:31:30","slug":"locals-sue-seeking-to-force-maine-to-re-instate-residency-requirement-for-marijuana-licenses","status":"publish","type":"post","link":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/2020\/06\/locals-sue-seeking-to-force-maine-to-re-instate-residency-requirement-for-marijuana-licenses\/","title":{"rendered":"Locals Sue, Seeking to Force Maine to Re-instate Residency Requirement for Marijuana Licenses"},"content":{"rendered":"

As I blogged about earlier, the state of Maine recently\u00a0abandoned\u00a0a\u00a0residency requirement\u00a0for obtaining commercial adult use marijuana licenses.\u00a0See\u00a0Company Sues Maine for Discriminating Against Non-residents When Licensing Marijuana Businesses<\/a>\u00a0and\u00a0UPDATE: Maine Drops Residency Requirement for Adult-Use Commercial Licenses, Moots Legal Challenge<\/a>. Residency had been expressly required by the state’s adult use marijuana law (the 2018 Marijuana Legalization Act), but the state’s licensing agency dropped the requirement after the state attorney general\u00a0advised that the requirement probably violated the dormant commerce clause. (The issue arose when\u00a0the licensing agency was sued by\u00a0an out-of-state marijuana company, Wellness Connection, back in March.)<\/p>\n

Now some residents of Maine want the state licensing agency (the Maine Department of Administrative and Financial Services) to reinstate the residency requirement. A group\u00a0calling itself “United Cannabis Patients and Caregivers of Maine”\u00a0and two individual Maine residents have sued the state\u00a0licensing agency,\u00a0demanding that it enforce and defend the residency requirement. I have posted the full complaint (it’s only 10 pages long, including one of the exhibits), which was filed in state superior court:<\/p>\n

United Cannabis Patients and Caregivers v. Maine Department of Administrative and Financial Services complaint<\/a><\/p>\n

I’ll excerpt some key language from the complaint, then I’ll briefly explain why I think the suit is likely to fail.<\/p>\n

The complaint starts with the obligatory description of the plaintiffs and their interest in bringing the lawsuit:<\/p>\n

15. Plaintiff United Cannabis’s members, including Plaintiff Dawson\u00a0Julia, operate\u00a0licensed medical marijuana storefronts, as provided by the Maine Medical Use of Marijuana Act,\u00a0as caregivers involved with the cultivation and sale of\u00a0medical marijuana.<\/p>\n

16. Licensure and operation of new adult use dispensaries will create new economic\u00a0competition that affects licensed medical marijuana caregivers’ business operations, including\u00a0the businesses of Plaintiff United Cannabis’s members and Plaintiff Dawson Julia.<\/p>\n

17. Plaintiff Christian Roney has applied for an adult use medical marijuana license\u00a0in compliance with all requirements of.the [Marijuana Legalization] Act, including the Residency Requirement.<\/p>\n

18. Plaintiff Roney has developed business plans in order to obtain the necessary\u00a0grow and sales licenses from the Department to operate an adult use marijuana establishment as\u00a0provided by the Act.<\/p>\n

19.Plaintiffs have all invested in their Maine marijuana businesses, and developed\u00a0and tailored their anticipated business operations in reliance on the express language of the\u00a0Department’s Rules and the Act, including the Residency Requirement.<\/p>\n

20. The Residency Requirement provides an economic advantage to plaintiffs by\u00a0limiting the eligibility for adult use marijuana businesses to Maine residents.<\/p>\n

21. Plaintiffs have reasonably relied upon the economic advantage provided by the\u00a0Residency Requirement in the Act and the Department’s Rules.<\/p>\n

22. Plaintiffs have an economic interest in the Department’s enforcement of the\u00a0Residency Requirement when the Department exercises its exclusive statutory authority to grant\u00a0or deny applications for licensure as marijuana establishments under the Act.<\/p>\n

23. Issuance of an adult use marijuana license to any individual or entity\u00a0that cannot\u00a0comply with alt requirements of the Act injures Plaintiffs by wrongfully increasing economic\u00a0competition to Plaintiffs’ business operations that the Maine Legislature expressly excluded from\u00a0Maine’s marijuana marketplace.<\/p>\n

The complaint then notes that the defendant\u00a0licensing agency has publicly acknowledged that it “‘will not be enforcing the Residency Requirement or any agency rules, regulations or guidance which enforce or implement the Residency Requirement.'” (Paragraph 27, quoting the Stipulation of Dismissal of Wellness Connection’s lawsuit against the state.)\u00a0 It also notes that no court has yet ruled that the Residency Requirement is unconstitutional, and the Maine legislature has not amended the Marijuana Legalization Act to remove the requirement.<\/p>\n

The complaint alleges that the licensing agency’s decision to abandon the Residency Requirement thus “violates the Act and its statutory mandate to enforce the provisions of the Act.” It requests that the court order the agency to re-instate the requirement — i.e., to refuse to issue any cannabis licenses to non-residents (like Wellness Connection).<\/p>\n

Ultimately, this is going to be a very tough lawsuit for the Plaintiffs to win. For one thing, they have to convince the state court that\u00a0the state licensing agency\u00a0exceeded its\u00a0authority when it dropped the\u00a0Residency Requirement. That’s no easy task. Generally, courts give agencies\u00a0a lot of leeway to decide how to implement statutes they are charged with enforcing. Courts are hesitant to force an agency to take\u00a0 action against one private party at the\u00a0request of another private party. For example, no\u00a0private citizen could successfully sue the federal Department of Justice to force it to bring civil or criminal enforcement actions against state-licensed marijuana distributors. To be sure, some states might be more receptive to such requests, and Plaintiffs are not asking for the\u00a0licensing agency to\u00a0punish anyone — they’re just asking the agency to consider residency before it awards commercial marijuana licenses. Still, this reluctance to let private Plaintiffs\u00a0direct agency action\u00a0is one obstacle the Plaintiffs need to overcome.<\/p>\n

Second, the Plaintiffs have to establish standing to sue the licensing agency. Among other things, standing requires that the Plaintiffs\u00a0suffered a direct and concrete injury because of the\u00a0agency’s decision to abandon the Residency Requirement. The allegations the Plaintiffs make in the complaint — that\u00a0they will face\u00a0greater competition and thus lose money if the agency licenses non-resident companies (perhaps, because they are better financed)\u00a0— are probably enough to survive a motion to dismiss. However, the Plaintiffs will likely have to back up these claims if the lawsuit moves forward, and there’s no guarantee they will be able to demonstrate an injury from the agency’s action. For example, if the agency demonstrates that the Plaintiffs failed to meet some other licensing criteria or would have gone out of business quickly anyway, then the Plaintiffs would not have suffered a cognizable injury from the agency’s decision to award some licenses to non-residents.<\/p>\n

Third, the state might be able to convince the court that the Residency Requirement really is doomed. True, as the Plaintiffs point out, no court has yet found the requirement to be unlawful. However, as I discuss in my original post on the Wellness Connection lawsuit, linked above, there is a good chance that a court would hold that\u00a0the Residency Requirement violates the dormant commerce clause. So the court in this case may refuse to order the licensing agency to do something unlawful — namely, to discriminate against non-residents.<\/p>\n

Let me quickly point out that the Maine suit is similar to one brought in California by a\u00a0group of small California marijuana suppliers. Those small suppliers sued the California marijuana licensing agency for abandoning\u00a0limitations\u00a0on cultivator size that were\u00a0supposed to be imposed under\u00a0Proposition 64. However,\u00a0the group\u00a0later abandoned\u00a0its suit. See\u00a0Cases to Watch: California Growers Association vs. California Department of Food and Agriculture<\/a>\u00a0.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

As I blogged about earlier, the state of Maine recently\u00a0abandoned\u00a0a\u00a0residency requirement\u00a0for obtaining commercial adult use marijuana licenses.\u00a0See\u00a0Company Sues Maine for Discriminating Against Non-residents When Licensing Marijuana Businesses\u00a0and\u00a0UPDATE: Maine Drops Residency Requirement for Adult-Use Commercial Licenses, Moots Legal Challenge. Residency had been expressly required by the state’s adult use marijuana law (the 2018 Marijuana Legalization Act),…<\/p>\n","protected":false},"author":6789,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,4],"tags":[6,607,629,41,166,167,110,628,15,5,630,609,627,626],"class_list":["post-801","post","type-post","status-publish","format-standard","hentry","category-news","category-updates","tag-cannabis","tag-dormant-commerce-clause","tag-figueroa","tag-lawsuit","tag-license","tag-licensing","tag-maine","tag-maine-department-of-administrative-and-financial-services","tag-marihuana","tag-marijuana","tag-residency-requirement","tag-resident","tag-united-cannabis-patients-and-caregivers-of-maine","tag-wellness-connection"],"_links":{"self":[{"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/posts\/801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/users\/6789"}],"replies":[{"embeddable":true,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/comments?post=801"}],"version-history":[{"count":11,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/posts\/801\/revisions"}],"predecessor-version":[{"id":812,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/posts\/801\/revisions\/812"}],"wp:attachment":[{"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/media?parent=801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/categories?post=801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/my.vanderbilt.edu\/marijuanalaw\/wp-json\/wp\/v2\/tags?post=801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}