Federal Judge Strikes Down Missouri Residency Requirement

The decision would allow out-of-state companies to join the stateโ€™s medical marijuana sector.

Missouri State Capitol, Springfield.
Missouri State Capitol, Springfield.
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The nationโ€™s major cannabis companies could soon be able to join Missouriโ€™s medical marijuana market after a federal judge struck down a state residency requirement.

U.S. District Judge Nanette Laughrey on Thursday issued an order that blocks Missouriโ€™s requirement that its cannabis businesses be majority-owned by Missouri residents, the Springfield News-Leader reports. Laughrey had issued a temporary order blocking the requirement earlier this year.

The requirement was included as part of the constitutional amendment authorizing medical marijuana approved by voters in 2018. Many out-of-state companies have partnered with in-state operators in order to comply with the law, but one โ€” Mark Toigo of Pennsylvania โ€” sued over his inability to acquire a majority stake in his Missouri cultivation and dispensary operations.

State attorneys offered no additional arguments or briefs leading up to an eight-minute bench trial last week; an attorney representing Toigo suggested that the state hoped for a quick decision in order to take the matter to federal appeals court. Missouri officials did not indicate whether they planned to appeal.

Although the ruling would allow multi-state operators to bring much-needed external investment into Missouriโ€™s medical cannabis industry, current companies warned that it could be difficult to compete with established industry giants.

โ€œIt kind of takes out one of those few things that we had to keep everybody on even ground,โ€ Kim Andrews, the part-owner of Springfield dispensary OzaRX Botanicals, told the News-Leader.

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