On December 29, 2022, over 18 months after cannabis became legal to sell in New York State, the first retail dispensary is scheduled to open. This begs the question - should it have taken this long? Recent federal court precedent call into question the constitutionality of state residency requirements for licensees, and at least one pending case could open the cannabis industry to interstate commerce, despite it still being illegal federally.
Many states that legalized marijuana established residency requirements. This is done for a few reasons. One is to ensure state residents receive the financial benefits of legalization in their own state. Another is to curtail outside entities from coming into a newly legalized state and dominating the market from afar. With cannabis still illegal under federal law, state policymakers believe states have the right to establish state laws regulating the industry. But do they?
In New York, the Cannabis Control Board and Office of Cannabis Management require the first round of cannabis retail dispensary licenses be awarded to persons with ties to New York, including a marijuana-related conviction in New York. But, out-of-state operators have cried foul. Hoping to benefit from legalization, out-of-state grower have filed lawsuits. Suits are predicated on the U.S. Constitution's Commerce Clause1. Article 1 of the US Constitution contains the Commerce Clause. The Commerce Clause charges Congress with regulating...
