Dormant Commerce Clause Provides Relief to State License Applicants But Can It Eliminate Bans on Interstate Commerce For Cannabis??

It is a challenging time for the legal cannabis industry. Burdened by taxes, fees and intense regulations, cannabis operators and license applicants push for change. In Maine, out of state applicants trying to secure a dispensary licenses were ineligible because they were not residents of Maine. The First Circuit Court struck down Maine's ban on out of state license holders. Courts in NY and LA struck down regulations restricting social equity applicants to individuals who sustained local (instate) cannabis convictions only.  

In all of these cases, Plaintiffs successfully argued that the dormant commerce clause prevented states from discriminating against out of state competing economic interests in a way that harms the out of state interest. What does that mean exactly? Laws that favor instate economic interests over out of state competing economic interests will be struck down.

So consider state laws that ban interstate trade of cannabis and mandate intrastate trade only. Cannabis remains federally illegal but many states have bucked the supremacy of the federal government and allowed commercial cannabis activities within their borders so long as the businesses obtain state approval and remain compliant with state regulations. Moreover, the federal government has refrained from prosecuting licensed state cannabis operators operating under the authority of state law. State laws prohibit trading across state lines. For example, licensed operators in California cannot trade goods with licensed operators in Florida. They can only trade with licensed cannabis businesses within their state boundaries. If you agree with me that such restrictions expressly violate the dormant commerce clause, then keep an eye on Oregon where one cannabis operator is making just this argument in a lawsuit they filed against the state. Jefferson Packing House, LLC may light the spark that set interstate cannabis commerce on fire. Watch this space.