Article 1, Paragraph 8, Clause 3 of the U.S. Constitution, the Dormant Commerce Clause, has for years been considered an arcane doctrine of American constitutional law; however, recent cases brought by out-of-state cannabis applicants have challenged its constitutionality as it pertains to state cannabis licensing residency requirements. This article takes a look at the issues underpinning two recent lawsuits brought against Missouri and Maine by non-resident applicants seeking cannabis licensure in states with durational residency requirements, and explores the potential impact on the emerging regulatory framework and adult use market being established in New Jersey.
The Dormant Commerce Clause
The Dormant Commerce Clause prohibits states from enacting laws that discriminate or unduly burden interstate commerce unless doing so is the only way to achieve a legitimate policy goal. Historically, this clause has been implicated when the United States Supreme Court has found that state laws or regulations either discriminate against out-of-state interests or unduly burden the free flow of commerce among the states. In other words, state laws violate the Dormant Commerce Clause if they require differential treatment of in-state and out-of-state economic actors that benefit those in-state and burden those out-of-state, unless the regulation is narrowly tailored to advance a legitimate local interest.