Dawson Julia, owner of East Coast CBD in Unity, filed a lawsuit against the state for violating the Maine Marijuana Legalization Act by licensing out-of-state retail store owners.

After his first lawsuit was dismissed this summer because the state had not yet licensed anyone, he filed a new lawsuit Oct. 19 after the state started issuing permits Sept. 8 to out-of-state retail owners, he said.

The Marijuana Act states an applicant must be a Maine resident, or if the applicant is a business, then its officer, director, manager and general partner must live in Maine. Majority business shares, partnership interests or other equity ownership interests must be owned by residents.

The court filing states that on May 12 the Office of Marijuana Policy removed all application materials pertaining to the residency requirement on the assumption that it violates the Dormant Commerce Clause of the U.S. Constitution.

This clause gives Congress the power to regulate commerce between states and bars states from creating laws that limit or burden interstate commerce. However, a judge has yet to rule that the residency requirement violates this clause, according to the suit.

Julia and co-plaintiff Christian Roney claim Theory Wellness of Maine, Theory Wellness of Maine Manufacturing, Theory Wellness of Maine Cultivation, Cannabis Cured Cultivation, Mainely Baked, Full Spectrum Solutions and Northland Botanicals are all licensed businesses that have owners or shareholders who are not Maine residents.

He said a lot of Maine residents who want to enter the retail market feel sold out by a few corrupt individuals who hold power in state departments.

Maine Senate President Troy Jackson, D-Allagash, supports the residency requirement and any provision that gives Maine residents the first opportunity to enter an industry, he said. He thinks that until a court has ruled that the residency requirement is unconstitutional, the Marijuana Policy Office should adhere to the provision.

A lot of opponents to residency requirements in the Legislature claim they are unconstitutional, but many requirements applied to laws or tax breaks are not later challenged in court, Jackson said.

His experience dealing with shell companies (corporations with no office or employees that own property or have funds in a bank) as a logger in northern Maine has made him a strong supporter of provisions that promote Maine businesses, he said.

Jackson said he does not intend to introduce legislation or vote for legislation that would eliminate the residency requirement in the Maine Marijuana Act.

In October, the first full month of sales since retail licenses were issued, the state made $107,394 in taxes from $1,073,848 in recreational marijuana sales statewide, according to the Office of Marijuana Policy’s website.

Julia said Maine cannabis is nationally regarded and residents have a vested interest in protecting the brand, similar to the state’s lobster industry. But out-of-state corporations are coming to Maine and suppressing local retail businesses by lobbying for high permit requirements and fees that place an increased financial burden on small retail owners.

In 2016 the Act to Legalize Marijuana was passed, requiring the Legislature to establish regulations for adult use, according to the Legislature’s website. It took nearly four years after legalization to roll out a plan for marijuana sales and taxation and then license retailers.

The medical marijuana industry took even longer to establish after its legalization in 1999. It was not until 2010 that rules and regulations for medical marijuana dispensaries were established after a citizen-initiative bill to create a Medical Marijuana Act was passed, according to the Legislature’s website.

The Legislature then passed emergency rules that limited the number of total dispensaries in the state to eight until a full rollout expanded the number of caregivers across the state. Over half of those first eight licenses issued were to out-of-state businesses, Julia said.

He supports a free retail marijuana market, but he said, “It’s not free when corporations are dominating the industry.”

The Office of Marijuana Policy referred all comments regarding the litigation to the Attorney General's Office, which declined to comment. Theory Wellness of Maine declined to comment on the litigation. Northland Botanicals' owner declined to comment, but said he is a Maine resident and his business is Maine-based.