A strain of marijuana called Power Plant is photographed on Saturday, Feb. 22, 2020, at the University City home of a grower who is cultivating in his basement legally for personal use. Photo by Christian Gooden, cgooden@post-dispatch.com
JEFFERSON CITY — A federal lawsuit filed Friday seeks to overturn state rules requiring Missouri residents to own the majority of any company operating a medical marijuana business in the state.
Mark Toigo, of Cumberland County, Pennsylvania, said in the lawsuit that he has been “deprived of significant and valuable business opportunities” due to the residency requirement, which he argues violates the Commerce Clause of the U.S. Constitution.
The lawsuit says that because of the rule, applying for a business license in Missouri would be “futile.”
It adds that Toigo is a minority owner in one Missouri firm, Organic Remedies MO Inc. (ORMO), but isn’t able to increase his ownership share above 49% because of the state rules, which are embedded into the state constitutional amendment legalizing medical marijuana.
“Moreover, Residency Requirement significantly narrows the universe of potential equity holders and prevents Mr. Toigo from selling any additional ORMO equity to potential non-Missouri partners,” the lawsuit says.
The lawsuit, filed in the U.S. District Court in the Western District of Missouri, argues the Commerce Clause bars protectionist policies that favor a state’s citizens or businesses at the expense of those in other states.
“The Residency Requirement, and the related state regulations, explicitly discriminates against residents of other states, and are thus precisely the type of state laws that are prohibited by the dormant Commerce Clause of the U.S. Constitution,” the lawsuit says.
It continues, “The real effect of the Residency Requirement has been and will continue to be to stifle Missouri’s medical marijuana program by severely restricting the flow of investment into the State.”
State records show ORMO won one cultivation license, three dispensary licenses and one marijuana-infused product manufacturer license.
The lawsuit asks U.S. District Judge Nanette K. Laughrey to declare the state requirements unconstitutional.
The state had filed no briefs in the case as of Tuesday. A spokesman for the Missouri attorney general’s office declined to comment.
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