420 with CNW — Experts Say Federal Court Ruling

420 with CNW — Experts Say Federal Court Ruling in Maine Could Pave Way for Interstate Cannabis Commerce

Last week, a federal appellate court ruled that the law prohibiting nonresidents in Maine from owning medical cannabis businesses in the state violated the United States’ constitution. Stakeholders in the industry have been monitoring the case keenly, with many arguing that the dormant commerce clause of the constitution applies to the cannabis industry, despite ongoing federal marijuana prohibition.

Legal experts believe that this ruling may have extensive implications for interstate marijuana commerce, with some noting that it could create potential complications for social equity programs. In the 2 to 1 ruling, the U.S. Court of Appeals for the First Circuit stated that while marijuana was illegal federally, Congress had acknowledged the existence of a medical cannabis market via the Rohrabacher–Farr amendment, which barred the Department of Justice from interfering with state-legal medical marijuana markets using its funds. The ruling added that in approving this legislation in 2014 and renewing it yearly since then, Congress had also acknowledged that the cannabis market could continue existing in some circumstances without federal criminal enforcement.

The state of Maine had in the past eliminated the residency requirement for its adult-use cannabis market. If the appellate court ruling is not appealed, interested parties will now have the chance to operate and own medical cannabis dispensaries in the state.

It should be noted that this ruling is limited in scope because it only directly affects states within its jurisdiction, which include Maine, Rhode Island, Puerto Rico, New Hampshire and Massachusetts. Despite this, the ruling has still caught the attention of many in the country, as more states move to enact legislations to lay the groundwork for interstate cannabis commerce.

For instance, Senate President Nicholas Scutari of New Jersey recently filed a measure that would permit the governor to enter into agreements with other legal states to export and import marijuana. This measure is similar to another interstate commerce initiative that was filed and signed into law in 2019 by Governor Kate Brown of Oregon.

It is important to note that these agreements can only be drawn up if the state attorney general (AG) verifies that the measure’s implementation won’t bring about considerable legal risk to the state, and the law can only take effect if the Department of Justice issues guidance authorizing such activity or if the federal law changes.

Meanwhile, a measure introduced by Sen. Anna Caballero of California, which would permit the governor to enter into interstate cannabis commerce agreements, was cleared for floor consideration by an assembly committee recently.

When cannabis interstate commerce finally becomes legal, multistate operators such as Flora Growth Corp. (NASDAQ: FLGC) will find an easier time optimizing their operations across the different markets in which they wish to have a presence.

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