Could the NY conditional adult use retail dispensary program (CAURD) be in jeopardy?

The US Court of Appeals for First Circuit recently ruled against a Maine law that required all medical marijuana business owners to be residents of the state. “Dormant Commerce Clause”the United States Constitution, which forbids states from passing legislation that restricts interstate commerce. Its opinion (Northeast Patients Group and al. United Cannabis Patients and Caregivers of Maine v. United Cannabis Patients and Caregivers of Maine. The Appellate Court upheld a lower court’s ruling that the residency requirement is an inconstitutional restriction on interstate commerce.

Under the Maine’s medical marijuana program, all directors or officers of a licensed medical cannabis dispensary are required to be residents of the state. After a legal challenge that was also based upon the Dormant Commerce Clause, Maine had dropped its residency requirement to allow adult-use cannabis dispensaries to operate. However, it sought to keep it in force for its medical marijuana program. This could be a problem for NY’s new adult use cannabis program, as of the requirements is that the potential licensees must have been arrested (or are related to someone who was arrested) for a marijuana related crime in New York and must also have been a New York resident at the time of the arrest. This could be considered a residency requirement, and it could lead to problems for individual licenses granted as well as the entire CAURD program.

This ruling could also open up to legal challenges to other State laws banning or importing cannabis from other States. The same reasoning invalidating residency requirements could apply. Thus, disallowing cannabis imports and exports between states could be construed to similarly place unreasonable restrictions on interstate commerce.

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