A federal judge on June 4th dismissed a lawsuit filed by a Washington state business that challenged Oklahoma’s residency law for medical marijuana businesses, Tulsa medical marijuana attorney Stephen Cale said.
“Selling marijuana is a criminal offense, punishable by imprisonment, everywhere in the United States. The dispositive question in the matter now before the court is whether the court should facilitate the plainly criminal activity in which plaintiff proposes to engage in the State of Oklahoma. The court declines to do so.”
— Judge Stephen Friot of the United States District Court for the Western District of Oklahoma
THE PROGRESSION OF OKLAHOMA’S RESIDENCY LAW
Oklahoma’s original medical marijuana program law found in SQ788 passed on June 26, 2018. It had an Oklahoma residency requirement whereby at least 75 percent of the owners of the marijuana business must be Oklahoma residents.. However, it did not specify how long someone had to live in Oklahoma to be considered a resident, Cale said.
In 2019, Gov. Kevin Stitt signed several pieces of legislation that altered SQ788. A business applying for a commercial medical marijuana license still had to have at least 75 percent ownership by Oklahoma residents. But the 2019 law, which is still in effect, specifies how long someone has to reside in-state to be considered a resident. For purposes of a medical marijuana business license, a person qualifies as an Oklahoma resident if they provide proof of Oklahoma residency for:
- At least the last two years immediately before the date of the license application; OR
- Five consecutive years out of the past 25 years immediately preceding the date of the license application.
THE OUT-OF-STATE CHALLENGER
The Plaintiff in the lawsuit was Original Investments, LLC. It does business as Dank’s Wonder Emporium. Original Investments wanted the federal court to block enforcement of Oklahoma’s residency law. It argued that the law violated the dormant Commerce Clause of the United States Constitution because it discriminates against non-residents.
However, the State of Oklahoma argued that even though its medical marijuana law permits licensed businesses to grow, process, sell, and distribute marijuana, those activities are illegal under federal law. Consequently, the State argued, the federal court should not overturn a state law that allows conduct that is federally illegal. The federal court agreed.
OTHER LAWSUITS CHALLENGING OKLAHOMA RESIDENCY LAW
Dank’s Wonder Emporium wasn’t the first to challenge Oklahoma’s residency law for medical marijuana business licenses, said Oklahoma medical marijuana attorney Stephen Cale.
In 2019, a group of Oklahoma marijuana businesses who got their licenses before the 2-year / 5-year residency requirement sued the State over the newly passed residency law. The 2019 law failed to grandfather in businesses that had already received their medical marijuana licenses the year before.
The parties reached a settlement in that lawsuit whereby the State agreed not to enforce the residency rule for businesses that applied for, or received, their commercial medical marijuana license before Aug. 30, 2019.
See Genesis Canna-Farms, LLP et al v. Oklahoma Medical Marijuana Authority
OTHER MARIJUANA STATES HAVE DITCHED THEIR RESIDENCY REQUIREMENTS
Other states that have legalized marijuana started out with residency requirements for marijuana businesses. But some are now eliminating that requirement, said Tulsa medical marijuana attorney Stephen Cale.
- In 2016, Oregon eliminated a law that required marijuana businesses to be at least 51% owned by an Oregon resident who lived in the state for at least two years.
- In 2019, Colorado passed a law that allows for out-of-state investors.
- In May 2020, following a lawsuit filed in March, Maine decided not to enforce state residency requirements for recreational marijuana. Another lawsuit filed in December 2020 is attacking Maine’s residency statute for medical marijuana.
RELATED: MJBizDaily: “Have cannabis residency requirements worn out their welcome?”
Tulsa medical marijuana attorney Stephen Cale is the founder of Cale Law Office, located in Tulsa, Oklahoma. He has been serving people with legal needs for more than 22 years.
Cale works with a number of marijuana-related organizations. He is a Legal Committee member of the National Organization for the Reform of Marijuana Laws (NORML). Additionally, he serves on the board of Green Country NORML, a Tulsa chapter of NORML. He also serves as a board member for, and is on the Standard Operating Procedures steering committee for, OK4U Approved, a medical marijuana patient union and trade organization.
The Cale Law Office has helped numerous people acquire their commercial medical marijuana dispensary, processor, and grower licenses. If you want a medical marijuana business license, marijuana compliance auditing, or need legal representation in the Oklahoma medical marijuana industry, call the Cale Law Office at 918-771-7314. Your initial consultation is free. Or, contact us through the web.