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Maine to End Planned Residency Requirement for Recreational Marijuana Sales

By Eric Volkman - May 13, 2020 at 12:45PM

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The state was advised that it would likely lose a court case challenging the requirement on constitutional grounds.

When Maine's recreational cannabis market launches, it will not be exclusive to the state's residents. On Tuesday, the state's Office of Marijuana Policy (OMP) announced that it will no longer enforce a residency requirement previously mandated for adult-use buyers of the drug.

The decision stems from a lawsuit brought against the state by NPG, a marijuana company that operates a network of dispensaries in Maine under the brand name Wellness Connection. In its lawsuit, NPG argued that the residency requirement violated the U.S. Constitution.

Gavel with marijuana leaf.

Image source: Getty Images.

The state's attorney general informed OMP that the residency requirement would face stiff challenges on constitutional grounds. Following that, the attorney general and NPG filed to have the case dismissed, essentially handing the victory to the latter and leading OMP to abandon the requirement.

The OMP said it and its parent state agency "will introduce legislation to remove the relevant language from state law. Once that step is complete, OMP will amend its administrative rule to align it with the underlying statute."

The people of Maine voted to legalize the sale and use of recreational marijuana in a 2016 ballot initiative. Despite that, the recreational market has yet to open because the state hadn't set up a licensing structure for cultivation facilities and dispensaries; a planned launch this spring was postponed due to the coronavirus pandemic.

Maine's current medical marijuana retail scene is relatively limited. One multistate operator (MSO) with a single dispensary there is Curaleaf (CURLF -1.39%), based in nearby Massachusetts. The abandonment of the residency requirement will benefit that store if it also ends up selling to recreational users, although Curaleaf hasn't yet made an official statement on the matter.

On Tuesday, Curaleaf's shares rose by nearly 7.4%, in contrast to the declines suffered by the major market indexes.

 

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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