PERIDOT TREE, INC., ET AL. V. CITY OF SACRAMENTO, ET AL.
Split Score
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Case Summary
Disposition
Affirmed
The Ninth Circuit consolidated appeals challenging Washington and Sacramento cannabis-licensing schemes that give preference to local residents. The court held that the dormant Commerce Clause does not protect an interstate market that Congress has criminalized and therefore upheld dismissal of the suits, affirming that the residency requirements are valid.
Circuit Split Identified
Legal Issue
Whether the dormant Commerce Clause applies to state cannabis-licensing residency requirements even though marijuana remains illegal under the federal Controlled Substances Act.
Circuit Positions
Dormant Commerce Clause applies to marijuana markets; residency requirements are per se discriminatory and invalid.
Dormant Commerce Clause does not apply to marijuana markets outlawed by Congress; residency requirements are permissible.
Conflict Summary
The First and Second Circuits hold that state residency preferences for marijuana-dispensary licenses violate the dormant Commerce Clause because the Clause applies notwithstanding the federal ban. In contrast, the Ninth Circuit holds that the dormant Commerce Clause does not extend to an interstate market Congress has declared illegal, so such residency preferences are permissible.