A recently filed lawsuit challenges the constitutionality of "Maine’s state law banning non-residents from controlling licenses for adult-use marijuana businesses." At the heart of this dispute is whether Maine's residency requirements violate the U.S. Constitution's dormant commerce clause.
In a 1987 Duke Law Journal article, Martin H. Redish and Shane V. Nugent explained:
"In a number of instances, ... although Congress has failed to enact legislation preempting state commerce regulation, the Supreme Court nevertheless has invalidated a state regulation as a violation of the commerce clause. The Court has done so when it has found that such regulation either discriminates against out-of-state interests or unduly burdens the free flow of commerce among the states. The commerce clause in its 'dormant' state is thought to invalidate such state regulation, although it is accepted that Congress may choose to overrule the judicial invalidation of a particular state regulation by statutorily authorizing it."
"Traditionally, those authors noted, "the dormant commerce clause was considered an arcane aspect of American constitutional law." But, that continues to change. The doctrine has taken on particular importance to the cannabis industry. It will be important to assessing not just the constitutionality of state residency requirements but also other protectionist laws, including certain state laws concerning hemp.
In particular, if and when marijuana is legalized at the federal law, and states try to restrict who can sell cannabis in their states or to whom cannabis can be sold in their states, the dormant commerce clause is likely to be implicated.
The potential significance of this "arcane" doctrine cannot be overstated when it comes to this novel industry. As such, going forward, it is important to consider legislation and litigation through the lens of this constitutional doctrine,
The lawsuit claims the residency requirement runs afoul of the Constitution’s ban on laws that discriminate against residents of different states. In particular, it is a violation of the dormant Commerce Clause, which says states may not put undue burdens on interstate commerce, the suit says.