Dormant commerce clause Archives - Green Market Report

StaffFebruary 8, 2023


The Daily Hit is a recap of the top financial news stories for February 8, 2023.

On the Site

Scotts Miracle Gro Sues TerrAscend, Jason Wild Over Etain Acquisition

The acquisition of New York medical cannabis operator Etain by Riv Capital is entering another messy chapter. Scotts Miracle-Gro (NYSE: SMG), owner of the hydroponic company Hawthorne, has filed a lawsuit against Jason Wild and TerrAscend (OTC: TRSSF) claiming they ruined its $175 million investment. Read more here.

Washington State Cannabis Residency Requirement Upheld by Federal Court

In a break from a national trend, a federal judge in Washington state upheld the state’s residency requirement for cannabis business ownership and ruled that the U.S. Constitution’s dormant commerce clause doesn’t apply because marijuana is still federally illegal. Read more here.

Biggest Cannabis Grower in Louisiana to Double Capacity

Good Day Farm, which is a partner with Louisiana State University and one of only two cannabis farmers in the state, is increasing its canopy size by 40,000 square feet within an already immense 225,000-square-foot facility in the town of Ruston. Read more here.

Capital Crunch Sparks Crowdfunding Campaigns

Capital has dried up in the cannabis industry, but companies still need investors and their money. This is sparking a renewed interest in crowdfunding. Companies are also finding that many platforms allow for debt deals versus straightforward equity deals. Read more here.

In Other News

Drippy Enterprises

Drippy Enterprises Inc., a cannabis-infused beverage company, aims to raise up to $1 million for the purpose of growing its cannabis-infused soda lines, expanding distribution channels, and increasing product inventories to meet the growing demand for cannabis beverages. Read more here.

EGF Theramed Health Corp.

EGF Theramed Health Corp. (CSE: TMED) (OTC Pink: EVAHF) (FSE: AUH) signed a nonbinding letter of intent to acquire its first cannabis dispensary, a single store on Vancouver Island in British Columbia. EGF Theramed noted in the announcement that it believes the market has become increasingly favorable to acquire assets from distressed single store operators favoring scaled centralized operations. Read more here.

Item 9 Labs

Phoenix-based Item 9 Labs Corp. (OTCQX: INLB), a vertically integrated U.S. cannabis franchisor and operator, shared that its premium cannabis brand, Item 9 Labs, recorded a 30% year-over-year increase in units sold in January 2023, compared to January 2022. Read more here.

Jenel Stelton-HoltmeierNovember 10, 2022


A district judge is the New York has issued a preliminary injunction against the New York Office of Cannabis Management, preventing it from issuing licenses in several localities.

Variscite NY One, an LLC owned by Kenneth Gay, requested the injunction as it challenges the state’s decision to award its first cannabis licenses to New Yorkers who have been incarcerated or arrested for the plant.

This injunction prevents the OCM from issuing licenses to applicants under the conditional adult-use retail dispensary (CAURD) program for the following geographic areas in the state:

  • Finger Lakes
  • Central New York
  • Western New York
  • Mid-Hudson
  • Brooklyn

According to the court filing (attached below), Variscite NY One requested the injunction in order to “preserve the status quo,” as the program had yet to issue any of the CAURD licenses. The company argued that New York’s social equity program runs afoul of the dormant commerce clause, in part because it is not narrowly tailored enough to serve a “legitimate local purpose.”

In issuing his decision, U.S. District Judge Gary Sharpe wrote that the OCM “did not even attempt” to show that its restrictions advanced such a local purpose.

In addition, the court agreed with Variscite that its exclusion from the initial process could cause “irreparable harm” by granting an early advantage to other applicants.

The New York adult-use cannabis program specifically wanted to address the social equity aspect of licensing and chose to award the first licenses to what it calls “justice applicants.” These applicants can be individuals who were convicted of or who had a parent, legal guardian, child, spouse, or dependent convicted of a “marihuana-related” offense in New York state prior to March 2021.

This is a developing story and will be updated as new information becomes available.


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