A resident of Pennsylvania and an investor in its cannabis program, Mark Toigo would like to apply for a medical marijuana license in Missouri, however state law prevents him from doing so.
That's because, under Missouri’s residency requirement, non-residents are disallowed from securing medical use marijuana licenses and from owning a majority of any Missouri company that holds a medical marijuana license.
“I don't see any rational basis to have a residency requirement,” Toigo’s attorney Benjamin Stelter-Embry said. “I understand this state's desire to restrict their marijuana markets to in-state residents but it flies in the face of what the Supreme Court has ruled for decades and decades.”
Toigo has sued Missouri’s Department of Health and Senior Services in an attempt to outlaw the state requirement that medical marijuana licenses should only be awarded to Missouri based business owners.
“It's not explicitly stated but the courts for hundreds of years have found restrictions that favor in-state residents over out of state residents on a whole cornucopia of trade issues are violations of the constitution,” Stelter-Embry told the St. Louis Record.
Filed on Dec. 11, the lawsuit further alleges that if the requirement is not enjoined by the federal court, smaller Missouri businesses that are looking for financial assistance from family members and acquaintances residing beyond Missouri’s borders will be impeded.
“The inability for in-state residents to raise capital from out-of-state investors could certainly affect in-state residents who could have obtained a license or would be a good business person to have in that market but they just can't do it because they don't have the funds themselves,” Stelter-Embry said in an interview.
The first licensed sales began in October 2020 after medical use was legalized in 2018 through a ballot initiative to amend the state constitution.
“The federal government has chosen not to prosecute any of these businesses that have been operating medical and or recreational marijuana establishments and even though you can't take marijuana out of the state, there shouldn't be any prohibitions on out of state investors to engage in those business practices,” Stelter-Embry said.
Toigo’s attorney filed the complaint seeking injunctive relief in the Western District of Missouri Central Division, alleging the state is discriminating against non-residents and that the residency requirement violates the commerce clause of the U.S. Constitution.
“The dormant commerce clause prohibits restrictions on trade between the states and this was one of the central reasons that the articles of Confederation failed was because there was all this protectionist behavior happening between the States,” Stelter-Embry said.
As a result, when the U.S. Constitution was drafted a commerce clause was included.
“Residency requirements don't exist in many States and several states that had residency requirements in their marijuana statutes like Maine threw them out because a district court in Maine recently found the residency requirements were unconstitutional,” Stelter-Embry said.
The case is currently pending in the hands of U.S. District Judge Nanette K Laughrey who was nominated by former President Bill Clinton.