Have cannabis residency requirements worn out their welcome?
Published 3 seconds ago | By Jeff Smith
This story appears in the January issue of Marijuana Business Magazine.)
Montana voters passed a recreational cannabis initiative on Election Day that will require licensed operators to be state residents, as is now the case with its medical marijuana program.
In keeping this requirement, Montana is a rare breed. Several states have abandoned residency requirements in recent years, and similar mandates in other states are being challenged as unconstitutional.
It remains to be seen whether Montana’s residency requirement will face lawsuits as well.
But the issue raises questions about whether residency requirements in the marijuana industry eventually will become a thing of the past.
Worthy Purpose, Mixed Results
The original purpose of residency requirements in the marijuana industry seemed worthy enough: Advocates of the effort were concerned about corporate takeovers of the cannabis industry and believed that residents – rather than out-of-state investors – should derive the economic benefits of the nascent sector.
The architects behind the regulations also believed that residency requirements would help curb illicit markets.
But as many states have found, residency requirements can become a rather onerous form of economic protectionism and don’t necessarily repress illicit sales.
Instead, they can prevent the industry from developing or growing naturally by restricting the flow of capital.
Several states ditched residency requirements as a result: