Patricia Rosi, CEO of the Wellness Connection (right) stands with some of the cannabis buds for sale while Paul Robbins (left) works behind the counter in Portland in March 2019. Rosi's company runs four of the eight medical marijuana stores in the state.

AUGUSTA, Maine — Maine will not enforce a residency requirement in its recreational marijuana program after the attorney general’s office refused to defend that part of the law from a constitutional challenge in federal court, a regulator said Monday.

The agreement between the Office of Marijuana Policy and Wellness Connection, which operates medical marijuana dispensaries in Portland, South Portland, Brewer and Gardiner, would end the lawsuit over a residency requirement that had its roots in the law approved by voters in 2016 to establish the recreational market.

The market, however, has not yet opened. Former Gov. Paul LePage, a Republican, vetoed a 2017 implementing law before the Legislature coalesced around a different plan to override LePage’s veto the next year. While the administration of Gov. Janet Mills has worked to let sales begin, the coronavirus led it to delay a planned spring rollout.

Wellness Connection sued the state in March over a part of the law requiring that a majority of the ownership in companies licensed under the new program be held by Maine residents or whose owners are Maine residents of the state. Every officer, director, manager and general partner of the business must also be a Maine resident.

The dispensary chain, which plans to be a dominant player in the recreational market and is 49 percent owned by a Delaware investor, challenged the requirement as unconstitutional under the 14th Amendment, which bars overly restrictive commercial regulations between states. The law made it difficult to raise money, much which would have to come from out of state, it said.

The Mills administration acceded to that lawsuit on Monday after the office of Attorney General Aaron Frey said the requirement was not likely to withstand the legal challenge and refused to defend the restriction in court, according to a statement from the Office of Marijuana Policy.

The office said it would introduce legislation to repeal the requirement. The agency would “continue to work diligently to fulfill its obligations to the industry and public,” the office’s director, Erik Gundersen, said.

Michael Shepherd

Michael Shepherd joined the Bangor Daily News in 2015 after three years as a reporter at the Kennebec Journal. A Hallowell native who now lives in Augusta, he graduated from the University of Maine in...