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Missouri Federal Judge Prevents State From Enforcing Residency Rules

Missouri medical cannabis businesses no longer have to be majority-owned by residents who have lived in the state for at least one year.

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June 24, 2021

On June 21, U.S. District Judge Nanette K. Laughrey ruled against Missouri's residency rules and removed the state requirement that medical cannabis businesses must be majority-owned by individuals who have lived in the state for a minimum of one year.

Laughrey said that the residency requirement violated the U.S. Constitution’s Dormant Commerce Clause, which refers to the prohibition implied in the Commerce Clause "against states passing legislation that discriminates against or excessively burdens interstate commerce," according to Cornell Law School.

According to Law360Laughrey ruled that it was unclear how Missouri's residency policy fulfilled its goal of keeping medical cannabis from being trafficked out of the state. She added that for the one-year residency requirement to pass, the state must prove it was tailored to advance a legitimate local interest; however, she said the Missouri Department of Health and Senior Services (MDHSS) and the state's cannabis regulator did not meet that requirement.

Laughrey said the court did not accept the MDHSS claims that the residency requirement would ease the need to secure an application's out-of-state records just because that applicant lived in Missouri for one year, Law360 reported. And the court added that if the department had a legit interest in keeping medical cannabis from being interstate trafficked or diverted into the illicit market, there are other ways to do that besides discriminating against out-of-state business owners.

"It is no easier for a person who has lived in Missouri for less than a year to drive from Missouri to Kansas with medical marijuana in their trunk than it is for a person who has lived in Missouri for a year and a day," Laughrey wrote in her decision. "And it is no more difficult for a long-time Missouri resident to smuggle marijuana out of the medical system and into the recreational market than it is for anyone else."

Essentially, the court order prevents the state from improperly burdening interstate commerce and similar policies in city and state-regulated cannabis industries, according to Law360.