How Big Weed is trying to rewrite marijuana legalization to its advantage and wins

A court case that unfolds in the federal appeal process could have serious consequences for the U.S. cannabis industry and could pave the way for Big Weed to overturn what little authority governments have to steer lucrative business opportunities. of marijuana to those most affected by the war on drugs.

Along with jobs and tax revenues, one of the central promises of legalizing marijuana was restorative. At least some of the $ 17.5 billion to $ 20 billion to $ 50 billion in economic opportunity estimated by the legal weed industry (a number that varies depending on who you ask, but always falls within several billion) would go to people with a history of cannabis arrests or living in areas with high arrest rates.

But figuring out how to keep that promise has proven difficult. One method, tried by local governments in Maine as well as Georgia, was to impose a residency requirement. Under Maine’s original legalization laws, commercial licenses for medical and adult cannabis could only go to licensees who had lived in the state for a period of time.

Although Maine is a relatively small state with a relatively young adult cannabis industry – voters legalized adult cannabis in 2016, but licenses were not granted until 2020 – residency requirements have nevertheless considerably limited the ability of foreign firms to compete. .

Residence laws are bad for Big Weed, in other words, and Big Weed didn’t resist. As the Portland Press Herald noted, Wellness Connection of Maine, described as “the largest cannabis company in the state,” has filed a lawsuit to overturn the rule. And last year, a judge ruled in favor of the company.

According to records, Wellness Connection’s parent company is High Street Capital Partners. In 2018, High Street Capital Partners changed their company name to Acreage Holdings.

And Acreage Holdings, a publicly traded company whose directors are New York financiers, according to records, but which is listed on Canadian stock exchanges, is one of the largest marijuana companies in the United States.

Last year, a lower court sided with the company and dismissed the residency requirement for adult cannabis licenses. A federal judge in the District of Maine has ruled that the residency requirements violate the dormant trade clause of the U.S. Constitution, which reserves the federal government the power to regulate interstate commerce – even though interstate cannabis is illegal, spreads to marijuana.

Foreign companies with commercial cannabis licenses in Maine appear to be a settled issue. However, the company and state regulators in Maine have appealed the medical cannabis licensees’ request for the ruling to the U.S. First Circuit Court of Appeals.

Who would benefit if the residency requirements were declared unconstitutional by a federal appeals court? Big Weed certainly has a major stake in the game.

Acreage Holdings did not respond to a request for comment sent by email on Friday. But if the company and its subsidiaries continue to be successful in challenging the residency requirement, it would be a victory for Big Weed across the United States.

It would also be a setback for local governments, regulators, and advocates of “social fairness,” the concept of ensuring that the legalization of cannabis means economic opportunity only for venture capitalists and predominantly white entrepreneurs and male, while people of color and others who have worked in the underground cannabis economy for years are excluded.

“These are the best shots of mice and humans,” said David C. Holland, a New York cannabis lawyer and co-founder of the New York State Cannabis Industry Association. A residency requirement “is a great idea, but at some point a court will say it violates the dormant trade clause.”

Arguments for the appeal have yet to be scheduled, but already cannabis companies in other states are using the ruling as a precedent to challenge similar residency requirements.

In August, a company called Georgia Atlas, which court records show is affiliated with a company of the same name based in Illinois, filed a lawsuit to overturn the Georgia HOPE Act residency requirement.

According to a brief filed last month, litigants cited both the situation in Maine as well as a brief effort by the city of Detroit to impose residency conditions there.

Acreage reached a level of notoriety in 2018 when the company hired John Boehner, the former Republican Speaker of the House of Representatives who had consistently opposed cannabis reform when he was one of the most prominent lawmakers. powerful in Washington, as a board member and spokesperson.

But Acreage would achieve even greater notoriety if the company and its subsidiaries succeeded in overturning Maine’s residency requirements entirely.

In an interview, Holland suggested that states could find other ways to secure business opportunities for locals, including minorities harmed by marijuana arrests. At the same time, Big Weed can find ways around these rules as well – and as this case shows, Big Weed certainly wants to.

And while governments can’t reserve cannabis licenses for locals rather than foreign companies, the list of methods they have to give small entrepreneurs a head start – and fulfill one of the promises of legalizing cannabis. marijuana – gets even smaller.