Maine's biggest cannabis company threatens to sue the state if barred from industry

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The biggest cannabis company in Maine, U.S., has announced its intent to sue the state if rules barring the business will potentially prevent its participation in the state’s burgeoning market for adult-use cannabis.

The state’s residency requirements threaten to shut Wellness Connection out of the recreational industry.

In a hearing with the Veterans and Legal Affairs Committee on Monday, the company blasted proposed residency rules that allow the first set of cannabis business licenses to be granted exclusively to Maine residents, and ban licenses for businesses involving out-of-state partnerships and investment.

“We’re very concerned that the residency requirement in the current form would provide a serious obstacle to Wellness’ entry into the adult-use market,” said attorney Dan Walker during his testimony to the Committee.

Walker says that the residency requirements are unconstitutional and a violation of interstate commerce laws. Furthermore, he says, the rules are unclear.

“You have added a requirement that seems to say that out-of-state entities cannot have ‘more than minimal influence’ over or be ‘entitled to a share of the revenue or profits’ of a marijuana establishment,” Walker said as part of his scathing testimony. “These two categories could be read by regulators to encompass nearly anyone in a contractual relationship of any sort with a marijuana establishment.

“Furthermore, ‘more than minimal influence’ is an entirely subjective standard that gives the department enormous discretion to penalize or shut down marijuana operations, even for something as commonplace and benign as out-of-state bank loans or even loans from out-of-state relatives.”

Wellness Connection is a non-profit but has financial ties to Acreage Holdings after the latter bought out Wellness’ initial investor, who was also located outside of Maine.

The Maine Office of Marijuana Policy’s regulations will be reviewed by the committee, with the intent to send them to the Legislature for a vote before it takes a leave for the summer a week from today.

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