When many states, including New York, legalized marijuana, they established residency requirements to ensure state residents receive the financial benefits of legalization in their own state and to curtail outside entities from entering and dominating a newly legalized state market from afar. This led out-of-state operators to cry foul, filing lawsuits predicated on the U.S. Constitution’s Commerce Clause, which charges Congress with regulating interstate commerce.
Another court recently ruled on residency requirements in the legal cannabis industry. The ruling further muddles the legal landscape around the interstate commerce of marijuana.
Judge Benjamin Settle, a judge with the United States District Court, Western District of Washington in Tacoma, upheld Washington state’s residency requirement for involvement in the state’s legal cannabis industry, finding it could not violate interstate commerce laws because there is no legal interstate commerce of cannabis – a drug illegal under federal law.
“The dormant Commerce Clause does not apply to federally illegal markets, including Washington’s cannabis market, and, thus, it does not apply to Washington’s residency requirements,” Settle wrote.
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