Apr. 8—A state agency that was sued two years ago for discriminating against out-of-state marijuana dispensaries argued in a federal appeals court Thursday that it has the right to discriminate because marijuana is still illegal under federal law.
Attorneys for the Maine Department of Administrative and Financial Affairs told a panel of judges that because Congress has yet to legalize marijuana, interstate commerce in cannabis products is illegal.
The department is appealing a 2021 U.S. District Court ruling that the state's residency requirement for Maine dispensaries — which barred anyone who is not a Maine resident from becoming a licensed seller or owning a dispensary in the state — was unconstitutional because it violated federal laws that bar states from interfering with interstate commerce.
The case is the first of its kind to reach a federal appeals court and could have ramifications for other states in which medical and recreational marijuana are legal.
In 2020, one of Maine's largest cannabis companies, Wellness Connection of Maine, sued to challenge the residency rule in both the medical and recreational markets.
Maine eliminated its residency requirement for recreational stores in 2020 but is appealing the district court ruling for medical dispensaries.
"In this case, Congress, through the Controlled Substances Act, has declared there is to be no market in marijuana," said Maine Chief Deputy Attorney General Christopher Taub, representing the state Department of Administrative and Financial Affairs, during oral arguments in the 1st Circuit Court of Appeals.
The department is joined in its appeal by a group of small local sellers of marijuana for medical use called the Maine Cannabis Coalition. These sellers — legally called caregivers — are classified differently from dispensaries such as Wellness Connection because they operate on a much smaller scale. Caregivers pay less in licensing fees than dispensaries, which are allowed to operate with more space.
"The caregiver model is what we're really protecting," said Susan Meehan, a caregiver and chairperson for the coalition. Meehan said out-of-state dispensaries would "interfere with the opportunity of [Maine] citizens and mom-and-pop shops to participate in the market."
Attorneys for Wellness Connection of Maine said Congress has not explicitly barred the interstate commerce of cannabis.
In its February response to the state's appeal, the company wrote that "[n]othing in the Controlled Substances Act affirmatively grants states the power to discriminate against nonresidents."