A federal judge in February upheld Washington state’s residency requirement for cannabis business ownership, putting it at odds with previous decisions striking down similar requirements in Maine.
The ruling, from U.S. District Judge Benjamin Settle in Tacoma, states that the Commerce Clause, which gives Congress the power of regulating commerce between the states, does not apply to federally illegal markets.
“Although Washington’s ‘legalization’ of cannabis certainly does not align with Congress’s intent, the residency requirements do,” Settle wrote, disagreeing with the plaintiff’s reasoning that by allowing state markets to exist, Congress has “substantially legalized” cannabis, adding, “There’s no such thing.”
“The residency requirements attempt to prevent any interstate commerce in cannabis and to prevent cannabis from Washington from moving into states where it remains illegal, like Idaho.”
The case was filed by Todd Brinkmeyer, an Idaho resident, who sued the Washington Liquor and Cannabis Board in 2020, alleging that the state’s requirement that owners and investors in cannabis businesses live in Washington for at least six months was a violation of the federal Constitution’s interstate commerce clause. Brinkmeyer provided debt financing for a friend in Washington with a cannabis retail store and the friend, a cancer survivor, wanted to transfer some ownership to Brinkmeyer should his health decline.
Though Brinkmeyer never applied for a license, an inquiry to the LCB from Brinkmeyer’s lawyer “made clear that Brinkmeyer could not inherit [the friend’s] businesses until he complied with the residency requirements,” prompting the suit.
Amicus briefs supporting Brinkmeyer were filed by the Craft Cannabis Coalition and Washington CannaBusiness Association.
In a footnote, Settle acknowledged that his decision is “contrary to the majority of courts” that have taken up these cases.
“However,” he wrote, “most of those courts failed to fully consider whether the dormant Commerce Clause can apply to a federally illegal market.”
In August 2021, a federal Judge in Maine overturned that state’s residency requirement. But in her ruling, Judge Nancy Torresen said the state’s argument that the Commerce Clause did not apply because regulations created an intrastate market that did not cross borders and therefore did not qualify for interstate commerce protections was “not without logic,” but ultimately ruled that because non-residents can purchase products to take home with them, the concept that the industry is “wholly intrastate does not square with reality.”
— Brian Beckley