No Out of State Ownership of Cannabis Businesses in Washington State (For Now)
So what happened?
State residency requirements were implemented to meet three specific goals:
(1) ensure state residents receive the economic benefits from the cannabis industry;
(2) deter conversion of cannabis inventory to the black market; and
(3) avoid retaliation by the federal government.
However, a recent flurry of challenges are based on the dormant Commerce Clause of the U.S. Constitution.
Proposed rule change by the Washington State Liquor and Cannabis Board would allow out of state financiers as well as out of state ownership of cannabis businesses.
On one side: those who say outside investors are needed to sustain some small companies.
The other side: those who assert that outside owners would put the entire industry at risk, citing there have been more cannabis arrests under the Biden administration than Trump’s previous administration.
The “dormant Commerce Clause,” raises concerns when regulatory measures are designed to benefit in-state economic interests by burdening out-of-state competitors.
For that reason, several trial courts have determined that certain residency requirements for cannabis licensing are likely unconstitutional under the dormant Commerce Clause.
So will Washington open their doors to out of state investors & operators? You’re going to have to come back to Weed Talk News to find out.
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