A recent U.S. Supreme Court ruling over alcohol beverage licensing will likely be the death of new residency requirements for commercial marijuana licenses, said Tulsa medical marijuana attorney Stephen Cale.
Oklahoma’s New Residency Law
The Oklahoma Medical Marijuana and Patient Protection Act went into effect Aug. 30, 2019. Part of the act requires marijuana business applicants to be a resident for a certain period of time.
First, business applicants must show that an Oklahoma resident, or residents, hold at least 75 percent ownership of the business entity. This requirement was in effect before the new law.
Secondly, the new law requires business applicants to show proof of Oklahoma residency for:
- at least two (2) years immediately preceding the date of application; or
- five (5) years of continuous Oklahoma residency during the preceding twenty-five (25) years immediately preceding the date of application.
Tennessee Wine and Spirits Retailers Association v. Thomas
On June 26, 2019, the U.S. Supreme Court issued a ruling in Tennessee Wine and Spirits Retailers Association v. Thomas, striking down a two-year residency requirement for Tennessee retail liquor stores, said Tulsa medical marijuana attorney Stephen Cale.
Background On The Battle
Tennessee law imposed durational residency requirements on persons and companies wanting to operate retail liquor stores. The law required two years of residency for applicants of an initial license. It also required an applicant for license renewal to reside in the state for 10 consecutive years.
Two businesses that did not meet the residency requirements applied for licenses to own and operate liquor stores in Tennessee.
Meanwhile, the state attorney general issued an opinion that the residency requirements discriminated against out-of-state economic interests in violation of the Commerce Clause of the U.S. Constitution. So, the Tennessee Alcoholic Beverage Commission (TABC) declined to enforce the requirements.
However, Tennessee Wine and Spirits Retailers Association (Association), a trade association of in-state liquor stores, threatened to sue the TABC if it granted the licenses. The two businesses prevailed in a series of court battles in state and federal courts. The Association appealed to the U.S. Supreme Court.
Holding By The U.S. Supreme Court
Ultimately, the highest court in the land ruled in favor of the two license applicants. Here’s a summary of what the court said:
- The Commerce Clause, provides that “[t]he Congress shall have Power . . . [t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Although the Clause is framed as a positive grant of power to Congress, the Court has long held that this Clause also prohibits state laws that unduly restrict interstate commerce.
- This ‘negative’ aspect of the Commerce Clause” prevents the States from adopting protectionist measures and thus preserves a national market for goods and services. This interpretation, generally known as “the dormant Commerce Clause.
- Under U.S. Supreme Court dormant Commerce Clause cases, if a state law discriminates against out-of-state goods or nonresident economic actors, the law can be sustained only on a showing that it is narrowly tailored to advanc[e] a legitimate local purpose.
- Because Tennessee’s two-year residency requirement for retail license applicants blatantly favors the state’s residents and has little relationship to public health and safety, it is unconstitutional.
What This Means For Oklahoma Commercial Medical Marijuana License Applicants
“Under the facts and holding in Tennessee Wine and Spirits Retailers Association v. Thomas, Oklahoma’s residency requirement likely will be deemed unconstitutional,” said Tulsa medical marijuana attorney Stephen Cale.
A state agency such as the State Health Department could ask for an Attorney General opinion regarding the enforceability of the residency requirement, Cale said. Or, it may take a lawsuit to declare the requirement unconstitutional.
“If the State Legislature is smart, it will remove this residency requirement,” he said. “Unfortunately, the Legislature doesn’t always move quickly. I think it will take a lawsuit to strike down the residency requirement.”
Working With The Cale Law Office
The Cale Law Office is dedicated to the practice of medical marijuana law and criminal defense. Our mission is to achieve the best possible results for our clients through hard work, attention to detail, and aggressive representation. This is done while maintaining the highest level of professionalism, integrity, and ethical standards.
If you or someone you know needs legal representation or consultation in the Oklahoma medical marijuana field, call the Cale Law Office at 918-277-4800. Your initial consultation is free.
We also offer compliance auditing services for medical marijuana dispensaries, grow operations, processors, and laboratories. Contact us at 918-277-4800 or through the web.
Tulsa medical marijuana attorney Stephen Cale is a Legal Committee member of the National Organization for the Reform of Marijuana Laws (NORML). He’s not new to cannabis law. He is also a board member for Green Country NORML, headquartered in Tulsa.
Attorney Cale consistently stays abreast of the complex area of marijuana regulations and laws. He has been serving people with legal needs for 20 years. So, you’ll be getting a Tulsa medical marijuana attorney with experience.