The state of Maine is being sued by local marijuana businesses for refusing to enforce a component of its marijuana laws. On Friday, the Maine Cannabis Coalition filed a lawsuit against the state, claiming that the Department of Administrative and Financial Services was in violation of state law after it failed to enforce the residency requirements included by lawmakers in the Marijuana Legalization Act.
According to the law, only Maine residents can run a recreational marijuana grow, manufacturing, or retail operation. Last month, the state announced that it would abandon the residency requirement, a move that garnered outrage from stakeholders and local marijuana businesses.
“Maine Cannabis Coalition and its members along with many other citizens fought hard for two years to include residency. To have it all be ignored after all the hard work and efforts is extremely aggravating to the citizens and policymakers of Maine who expect no one to be above the law,” said the coalition in a statement.
The announcement was made after Wellness Connection of Maine filed a lawsuit against the state seeking to overturn the residency requirement. The Auburn-based company operates four of the state’s medical marijuana dispensaries, and it has financial ties to international cannabis company Acreage Holdings. It claimed that the rule is unconstitutional and makes it harder for companies seeking to operate recreational marijuana to raise money.
Maine Cannabis Coalition argues that the state’s decision to grant non-residents licenses hurts medical marijuana providers by increasing the number of rivals competing for limited market share. Dawson Julia, the co-founder of the Maine Cannabis Coalition and Christian Roney of Waterville, who is seeking a recreational marijuana business license, say they relied on the competitive advantage offered by the Maine residency requirement when developing their business plans.
They want the Office of Marijuana Policy to follow through and enforce the residency requirement when awarding recreational marijuana business licenses. According to their lawsuit, the office has no authority to abandon a state law that has not been struck down by any court or repealed by the state legislature. It is seeking an injunction barring the Office of Marijuana Policy from awarding licenses to out of state applicants.
“This is a pay-to-play constitutional meltdown scheme being orchestrated by the fat cats of Wall Street,” Julie says.
Erik Gundersen, Director of the Office of Marijuana Policy says that his office took action on the advice of the Attorney General’s Office, which concluded the state would be unable to beat the Wellness Connection of Maine lawsuit.
It would be interesting to hear what industry players like Sugarmade, Inc. (OTCQB: SGMD) think about the legal battle shaping up in Maine even before the recreational pot industry gets underway.
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