Dispensary Chain Sues Portland Over Residency Requirement

Maine’s largest medical marijuana dispensary chain is suing the city over an ordinance favoring state residents for adult-use marijuana licenses, calling it “unconstitutional” and “discriminatory” to non-local companies.

Wellness Connection of Maine, which operates dispensaries in Portland, Brewer, South Portland and Gardiner, and High Street Capital Partners, a Delaware investor, filed a civil lawsuit in U.S. District Court against Portland on Monday. It mirrors a lawsuit filed against Maine in March that was dropped after the state said it would not enforce its residency requirement.

The dispensary chain alleges that a “points matrix” passed by the City Council, which assigns competitive point values to retail license applicants based on a number of criteria, discriminates against operations with non-resident ownership by violating the 14th Amendment of the U.S. Constitution, which bars overly restrictive commercial regulations between states.

The lawsuit was anticipated after councilors voted last month to approve a licensing ordinance that favored certain qualities desirable to the city, against the advice of city attorneys. Wellness Connection has been the dominant force in Maine’s medical marijuana market and is aiming to be a key player in the adult-use market.

Points are varyingly awarded, for example, to experienced medical marijuana caregivers, applicants from socially disadvantaged demographics and those who own the proposed retail location. The second-highest point value will be awarded to businesses with majority ownership of residents of more than five years.

Portland plans to use the competitive points matrix to determine 20 licenses from what is projected to be a much larger pool of applicants, as industry experts anticipate a strong retail cannabis industry nearly four years after Mainers voted to legalize it in a 2016 referendum.

Since then, the system has been delayed after a 2017 implementing bill was vetoed by former Gov. Paul LePage, a Republican. His successor, Democrat Janet Mills, has moved to allow retail sales, but the planned spring opening of the market was delayed due to the coronavirus.

Wellness Connection of Maine mounted a similar lawsuit against Maine earlier this year, but the office of Attorney General Aaron Frey advised the Office of Marijuana Policy to not enforce a four-year residency requirement. That decision came a week before the Portland City Council approved its ordinance on May 18.