UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
NPG, LLC d/b/a Wellness Connection,
and
Wellness and Pain Management
Connection, LLC,
Plaintiffs
v.
Department of Administrative and
Financial Services, State of Maine,

Civil Action No.
INJUNCTIVE RELIEF SOUGHT

and
Kristine Figueroa, in her official
capacity as Commissioner of the
Department of Administrative and
Financial Services, State of Maine,
Defendants.

MOTION FOR PRELIMINARY INJUNCTION
WITH INCORPORATED MEMORANDUM OF LAW
Plaintiffs move for the entry of a preliminary injunction, pursuant to Fed.R.Civ.P.
65(a), enjoining the Department from enforcing the residency requirement in 28-B
M.R.S. § 202(2) because it violates the Commerce Clause of the United States
Constitution.
FACTUAL BACKGROUND
There is a vibrant marijuana industry in the United States. Marijuana is legal for
adult use in 11 states and for medical use in 33 states. See Jeremy Berke and Skye

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15345522.1

 Gould, Legal marijuana just went on sale in Illinois. Here are all the states where
cannabis is legal, Business Insider (Jan. 1 2020).1 The federal government has not
stood in the way of legalization at the state level, but instead has let marijuana sellers
that comply with state law go about their business. See Memorandum for all United
States Attorneys: Guidance Regarding Federal Marijuana Enforcement, Office of the
Deputy Attorney General (Aug. 29 2013).2
As goes the nation, so goes Maine. Medical marijuana has been legal in Maine
since 1999. See 22 M.R.S. § 2383-B (1999)(amended in 2009 by LD 975). Adult use
marijuana was legalized by citizen referendum in 2016, and the legislature subsequently
created the framework in Title 28-B that governs the commercial cultivation,
production, and sale of adult use marijuana. See LD 1719 (2018)(subsequently amended
in part). After promulgating additional rules to govern the industry, the Office of
Marijuana Policy in the Department of Administrative and Financial Services began
accepting applications for the adult use market in December 2019. That application
process is ongoing, and the Department has not yet issued any final adult use marijuana
licenses. The Department speculates that the first retail marijuana stores will open in
June of this year at the earliest. See Penelope Overton, State now expects retail
marijuana stores won’t be open until June, Portland Press Herald (Feb. 28, 2020).

1

Available online at https://www.businessinsider.com/legal-marijuana-states-2018-1

This federal policy is expressed in a document known as the Cole Memorandum. The
Cole Memorandum, issued during the Obama administration, was purportedly
“rescinded” by Attorney General Sessions, see Memorandum for all United States
Attorneys: Marijuana Enforcement, Office of the Attorney General (Jan. 4, 2018), but
current U.S. Attorney General William Barr has told Congress that the Justice
Department is “operating under my general guidance that I’m accepting the Cole
Memorandum for now.” Review of the FY2020 Budget Request for DOJ, 116th Cong.
(Apr. 10, 2019) (testimony of William Barr, Att’y Gen. of the United States).
2

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 In terms of economic opportunity, Maine’s medical marijuana industry is
enormous, with eight dispensaries and approximately 2,500 caregivers producing and
selling marijuana in every corner of the state. See Penelope Overton, State’s medical
marijuana market much bigger than anyone realized, Portland Press Herald (Feb. 24
2019). Retail sales of medical marijuana in Maine reached $111.6 million last year,
making it the state’s third largest industry. Id.
As lucrative as Maine’s medical marijuana program has been, it is expected to be
quickly eclipsed by the adult use marijuana industry. See Lori Valigra, How the first
year of Maine’s recreational marijuana market will likely roll out, Bangor Daily News
(Jun. 17, 2019). This makes sense, because while the medical marijuana market is
limited to card-carrying patients, adult use sales can be made to anyone over 21 years of
age. 28-B M.R.S. § 504.
As a business opportunity, the adult use market will be most valuable at its
inception. This is because, as explained to the Bangor Daily News by the research editor
for the Marijuana Business Factbook, there is expected to be “a rush of consumers to a
handful of retail stores when the market starts, and then business will fall off” as more
competitors open. Valigra, supra at 3. In other words, the combination of pent-up
demand and limited competition will result in higher prices and the opportunity to build
goodwill and brand loyalty in this new market. As more companies enter the market,
competition will increase, prices are expected to fall, and the opportunity for new
entrants to establish goodwill and brand loyalty will diminish as incumbent sellers
become entrenched. Id.
In order to participate in Maine’s adult use marijuana industry from the start,
businesses need a license from the Department of Administrative and Financial
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 Services. See 28-B M.R.S. § 103. As explained further below, Plaintiff Wellness and
Pain Management Connection, LLC (“WPMC”) is unable to obtain a license because it is
an out-of-state corporation (see Declaration of Kevin Murphy ¶ 5, attached as Exhibit
A), and 28-B M.R.S. § 202(2) discriminates against corporations owned by nonresidents in violation of the dormant Commerce Clause of the U.S. Constitution.
Plaintiff NPG, LLC d/b/a Wellness Connection (“Wellness Connection”) is majorityowned by Maine residents, and so complies with the residency requirements in Title 28B. See Declaration of Ron A. MacDonald ¶¶ 3-4 (attached as Exhibit B.) But this is only
true because Wellness Connection has tailored its ownership structure to Maine’s
residency requirements. This has forced Wellness Connection to forego capital it could
otherwise have raised through equity sales to non-residents, capital it could use to invest
in and expand its anticipated adult use marijuana operations. MacDonald Decl. ¶ 6. If
the residency requirements of Title 28-B remain in effect, WPMC will be shut out of the
adult use market altogether, and Wellness Connection will remain undercapitalized and
undervalued.
The effect of the Title 28-B residency requirement on Wellness Connection and
WPMC is particularly striking because they have each been long-term prominent
participants in Maine’s medical marijuana industry. Wellness Connection is majorityowned by Northeast Patients Group, Inc., which has been an industry leader in Maine’s
medical marijuana market since 2011 and runs four of the state’s eight medical
marijuana dispensaries. MacDonald Dec. ¶¶ 3-4. WPMC has been involved financially
in Maine’s medical marijuana program, with the approval of state regulators, since
2012. Murphy Dec. ¶ 4. Both companies are harmed, and WPMC is excluded entirely
from Maine’s adult use marijuana program, as a result of the residency requirements of
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 28-B M.R.S. § 202(2). Because these requirements are unconstitutional, the
Department should be enjoined from enforcing them, so both Wellness Connection and
WPMC have full opportunity to participate in Maine’s adult use program.
ARGUMENT
Courts weigh four factors in ruling on a motion for preliminary injunction: (1) the
plaintiff’s likelihood of success on the merits; (2) the potential for irreparable harm to
the plaintiff if injunctive relief is denied; (3) the potential hardship to the defendant and
the balance of harms; and (4) the public interest. See, e.g. Esso Standard Oil Co. v.
Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006). Because the residency requirement is
unconstitutional under binding Supreme Court precedent, and the other factors support
preliminary injunctive relief, this motion should be granted.
A.

Plaintiffs are likely to succeed on the merits of their claims
because the Title 28-B residency requirement discriminates on
its face against non-residents.

The first and “most important part of the preliminary injunction assessment” is
the likelihood of success on the merits. Jean v. Massachusetts State Police, 492 F.3d
24, 27 (1st Cir. 2007). This factor favors Plaintiffs because Section 202(2) is
unconstitutional under binding Supreme Court precedent.
Maine law provides that “[a]n applicant for a license to operate a marijuana
establishment must,” if the applicant is a business entity, meet the following residency
requirements:
A. Every officer, director, manager and general partner of the business
entity must be a natural person who is a resident; and
B. A majority of the shares, membership interests, partnership interests
or other equity ownership interests as applicable to the business entity
must be held or owned by natural persons who are residents or

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 business entities whose owners are all natural persons who are
residents.
28-B M.R.S. § 202(2). “’Resident’” means a natural person who: A. Has filed a resident
individual income tax return in this State pursuant to Title 36, Part 8 in each of the 4
years prior to the year in which the person files an application for licensure under this
chapter. . . .; B. Is domiciled in this State; and C. Maintains a permanent place of abode
in this State and spends in the aggregate more than 183 days of the taxable year in this
State.” 28-B M.R.S.§ 102(48). Simply put, Section 202 requires that for a business to
be eligible for a license to operate a marijuana establishment in Maine, its owners and
officers must be Maine residents.
The protectionist purpose of this statute is clear. The website of the Office of
Marijuana Policy previously stated, until this language was removed, that Maine’s adult
use marijuana program is designed to “[e]nsure that economic opportunities afforded by
marijuana legalization is [sic] available chiefly for the citizens of Maine.”3 And in a
Boston Globe article titled Maine is finally moving ahead with recreational marijuana
– and Mainers will be the first to profit, the Office of Marijuana Policy declares that
Maine “was lucky enough to be able to learn from other states, where we saw big
companies coming in, gobbling up the industry, and pushing out small businesses and
locals. We’re doing our best to ensure that doesn’t happen here.” Dan Adams, Maine is
finally moving ahead with recreational marijuana – and Mainers will be the first to
profit, The Boston Globe (May 8, 2019). The residency requirement is unconstitutional

Draft Adult-use Marijuana Rules – Public Feedback, Department of Administrative
and Financial Services, State of Maine, https://maine.gov/dafs/services/
marijuana/rulemaking/feedback (Apr. 22, 2019 – no longer available online), attached
as Exhibit C.
3

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 because it discriminates on its face against nonresidents and does so for the explicit
purpose of benefitting Mainers. This violates the Commerce Clause of the U.S.
Constitution.
Resolution of the constitutional question in this case is controlled by the Supreme
Court’s recent decision in Tennessee Wine & Spirits Retailers Ass’n v. Thomas, 139 S.
Ct. 2449 (2019). In Tennessee Wine the Court upheld a challenge to a Tennessee law
requiring that applicants for a license to operate a liquor store have resided in the state
for the prior two years. Id. at 2457. The Court declared that Tennessee’s two-year
residency requirement “plainly favors Tennesseans over nonresidents,” id. at 2462, and
noted that the party defending the residency requirement had not even tried to justify it
“under the standard that would be triggered if the requirement applied to a person
wishing to operate a retail store that sells a commodity other than alcohol.” Id. The
remainder of the opinion addressed an argument that sought to salvage the residency
requirement under § 2 of the Twenty First Amendment (concerning commerce in
liquor). The Court rejected that argument and held that the residency requirement
violated the Commerce Clause. Id. at 2476.
The decision in Tennessee Wine & Spirits has ample precedential support. The
Commerce Clause addresses the problem that existed “[d]uring the first years of our
history as an independent confederation,” when “the National Government lacked the
power to regulate commerce among the States.” Camps Newfound/Owatonna v. Town
of Harrison, 520 U.S. 564, 571 (1997). “Because each State was free to adopt measures
fostering its own local interests without regard to possible prejudice to nonresidents, . . .
a conflict of commercial regulations, destructive to the harmony of the States ensued.”
Id. (quotation marks omitted). To solve this problem, the Commerce Clause “not only
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 granted Congress express authority to override restrictive and conflicting commercial
regulations adopted by the States, but . . . it also . . . effected a curtailment of state
power.” Id. (citing with approval Justice Johnson’s observation in Gibbons v. Ogden, 9
Wheat. 1 (1824) (opinion concurring in judgment), that “[i]f there was any one object
riding over every other in the adoption of the constitution, it was to keep the commercial
intercourse among the States free from all invidious and partial restraints.”); Hughes v.
Oklahoma, 441 U.S. 322, 325 (1979) (the Commerce Clause reflects “a central concern
of the Framers that was an immediate reason for calling the Constitutional Convention:
the conviction that in order to succeed, the new Union would have to avoid the
tendencies toward economic Balkanization that had plagued relations among the
Colonies and later among the States under the Articles of Confederation.”).
“The core purpose of the dormant Commerce Clause is to prevent states and their
political subdivisions from promulgating protectionist policies.” Houlton Citizens’ Coal.
v. Town of Houlton, 175 F.3d 178, 188 (1st Cir. 1999). “Protectionism . . . is forbidden
under the dormant Commerce Clause.” Camps Newfound/Owatonna, 520 U.S. at 588.
“[I]f a state law has either the purpose or effect of significantly favoring in-state
commercial interests over out-of-state interests, the law will ‘routinely’ be invalidated
‘unless the discrimination is demonstrably justified by a valid factor unrelated to
economic protectionism.’” Walgreen Co. v. Rullan, 405 F.3d 50, 55 (1st Cir. 2005).
Application of the dormant Commerce Clause is straightforward where a statute
discriminates against nonresidents on its face. “In the jurisprudence of the dormant
Commerce Clause, a finding of facial discrimination is almost always fatal.” Houlton
Citizens’ Coal. v. Town of Houlton, 175 F.3d 178, 185 (1st Cir. 1999); see also Camps
Newfound/Owatonna, 520 U.S. at 575 “(State laws discriminating against interstate
8
15345522.1

 commerce on their face are virtually per se invalid.”) (quotation marks omitted). The
key principle is that “in matters of foreign and interstate commerce there are no state
lines.” West v. Kansas Natural Gas Co., 221 U.S. 229, 255 (1911) (quotation marks
omitted).
There does exist “the possibility that a State may validate a statute that
discriminates against interstate commerce by showing that it advances a legitimate local
purpose that cannot be adequately served by reasonable nondiscriminatory
alternatives.” New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 278 (1988). But
“the standards for such justification are high.” Id. If plaintiffs meet their burden, then
“a discriminatory law is virtually per se invalid . . . and will survive only if it advances a
legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.” Dep’t of Revenue v. Davis, 553 U.S. 328, 128 S.Ct. 1801,
1808, 170 L.Ed.2d 685 (2008) (citations omitted) (quotation marks omitted); see also
Tennessee Wine, 139 S. Ct. at 2461–62 (“Under our dormant Commerce Clause cases, if
a state law discriminates against out-of-state goods or nonresident economic actors, the
law can be sustained only on a showing that it is narrowly tailored to advanc[e] a
legitimate local purpose.”) (quotation marks omitted). “The state bears the burden of
showing legitimate local purposes and the lack of non-discriminatory alternatives, and
discriminatory state laws rarely satisfy this exacting standard.” Family Winemakers of
California v. Jenkins, 592 F.3d 1, 9 (1st Cir. 2010). To meet this burden a state must
present “‘concrete record evidence,’ and not ‘sweeping assertion[s]’ or ‘mere
speculation,’ to substantiate its claims that the discriminatory aspects of its challenged
policy are necessary to achieve its asserted objectives.” Id. at 17 (quoting Granholm,
544 U.S. at 492–93).
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 Maine cannot demonstrate a legitimate local purpose for the residency
requirement of Title 28-B. The State has acknowledged that the residency requirement
is intended to favor Mainers and prevent “big companies coming in…and pushing out
small businesses and locals.” See Adams, supra at 3. Because the statute facially
discriminates against non-residents it is “virtually per se invalid.” Camps
Newfound/Owatonna, 520 U.S. at 575. And because Maine has been explicit that
discrimination against non-residents is the whole point of the residency requirement, it
cannot overcome the per se rule of invalidity. See Or. Waste Sys. V. Dep’t of Envtl.
Quality, 511 U.S. 93, 101 (1994) (“The State’s burden of justification is so heavy that
facial discrimination by itself may be a fatal defect.”) (quotation marks omitted).
Although marijuana remains illegal at the federal level, federal marijuana laws
are not enforced with respect to the type of commerce the Maine marijuana statute
permits. See supra at 2. In fact, far from prohibiting their operation, the federal
government regulates, oversees, and profits from marijuana businesses in all sorts of
ways. Marijuana businesses must pay taxes to the Internal Revenue Service.4 They must
comply with requirements of the Occupational Safety and Health Administration. 5
Banks can serve marijuana-related businesses, so long as they meet certain reporting

Section 280E of the U.S. tax code states that a marijuana business is “obligated to pay
federal income tax,” though it cannot deduct the cost of goods sold. This means that
marijuana businesses that are legal under state law must pay a significant portion of
their revenues to the IRS each year. The IRS obviously benefits from this scheme; it
collected $4.7 billion in taxes from cannabis companies in 2017, for example, while the
entire industry reported under $13 billion in total sales that year. See Sean Williams,
The IRS is seeing green on marijuana’s dime, The Motley Fool (Nov. 20, 2018).
4

Cannabis business Curaleaf Nj, Inc., for example, was recently fined by OSHA for
certain violations in New Jersey. See Occupational Safety and Health Administration
Inspection 1417453.015 (March 2, 2020).
5

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 requirements of the Treasury Department. BSA Expectations Regarding MarijuanaRelated Businesses, FIN-2014-G001, Financial Crimes Enforcement Network, U.S.
Treasury Department (Feb. 14, 2014). And the Rohrabacher-Farr Amendment, passed
in 2014 and renewed by Congress each year since, prohibits the U.S. Department of
Justice from using federal funds to interfere with the implementation of state medical
cannabis laws. See Pub. L. No. 113-235, § 538, 128 Stat. 2130, 2217 (2014). Because the
federal government has, in practice, accepted intrastate sales of marijuana, but has not
formally endorsed the practice, the real action in marijuana regulation is at the state
level. There is no reason why state regulators should not be required to observe the
same constitutional requirements in their regulation of marijuana that governs state
regulation of markets generally.6
To be clear, the injunction Plaintiffs seek would not allow the interstate sale of
marijuana products, or change any aspect of Maine marijuana law other than the
residency requirement. With respect to the residency requirement, Maine law already
permits non-residents to participate in the Maine marijuana market as minority owners
of market participants; the injunction Plaintiffs seek would simply permit them to
expand their participation to be majority owners. In all other respects Maine law would
be unchanged.

A number of other states that allow the sale of adult use marijuana do not have any
restrictions on non-resident ownership of marijuana businesses. California has no
residency requirement. See California Medicinal and Adult-Use Cannabis Regulation
and Safety Act. Nor do the adult use programs in Nevada and Washington. See Nevada
Revised States, Chapter 453D; ‘OLCC Marijuana Program: Frequently Asked Questions
(all).” Oregon Liquor Control Commission.
https://www.oregon.gov/olcc/marijuana/Documents/MJ_FAQS.pdf.
6

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 The Supreme Court has held that regulation of marijuana “is squarely within
Congress’ commerce power . . . .” Gonzales, 545 U.S. at 19. Since the Commerce Clause
gives Congress the power to regulate marijuana, it also bars states from discriminating
against nonresidents with respect to commerce in marijuana. See Hughes v. Oklahoma,
441 U.S. 322, 326 n. 2 (1979)(“the definition of ‘commerce’ is the same when relied on to
strike down or restrict state legislation as when relied on to support some exertion of
federal control or regulation”). The current state of federal marijuana policy is unsettled
(see testimony of Attorney General Barr cited supra note 2), but that does not give states
a license to engage in unconstitutional discrimination. As the Supreme Court has made
clear, “[a]ll objects of interstate trade merit Commerce Clause protection; none is
excluded by definition at the outset.” Philadelphia v. New Jersey, 437 U.S. 617, 622
(1978); see also Oregon Waste Sys., Inc., 511 U.S. at 99 (“discrimination simply means
differential treatment of in-state and out-of-state economic interests that benefits the
former and burdens the latter. If a restriction on commerce is discriminatory, it is
virtually per se invalid”).
The bedrock rule that “[p]rotectionism . . . is forbidden under the dormant
Commerce Clause” (Camps Newfound/Owatonna, 520 U.S. at 588) is not somehow
suspended or attenuated simply because the federal government regulates marijuana
too. If states elect to permit this form of commerce, they are not free to discriminate
against citizens of other states. See id. at 578 (“By encouraging economic isolationism,
prohibitions on out-of-state access to in-state resources serve the very evil that the
dormant Commerce Clause was designed to prevent.”).
In sum, the unique legal status of marijuana does not mean that the usual
constitutional rules do not apply. The federal government has permitted states to
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 experiment with marijuana policy, and that experimentation must adhere to the
requirements of constitutional law. If the federal government wished to single out
interstate actors to be excluded from participating in Maine’s marijuana market, it could
do so, but that is not a step the State of Maine is constitutionally permitted to take.
B.

Plaintiffs will experience irreparable harm if a preliminary
injunction is not granted.

“If the plaintiff suffers a substantial injury that is not accurately measurable or
adequately compensable by money damages, irreparable harm is a natural sequel.”
Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 19 (1st Cir. 1996). Here,
Plaintiffs’ injuries are not adequately compensable by money damages because the
Eleventh Amendment prevents Plaintiffs from suing the state for compensatory
damages. And the injury is not adequately measurable because the opportunity to enter
a new market at its inception is not one to which a reliable dollar figure may be
assigned.
1. Plaintiffs’ injury would be irreparable because they cannot
recover damages against the State of Maine.
If the Court declines to enjoin the enforcement of Section 202(2) while this
litigation is pending, and Plaintiffs later prevail on the merits of their constitutional
claim, Plaintiffs’ injuries would be irreparable, because they cannot recover damages
against the State of Maine. “[P]ursuant to the Eleventh Amendment, the State can
assert sovereign immunity for any back-damage claims, barring any claims for
recovery.” Long Term Care Pharmacy All. v. Ferguson, 260 F. Supp. 2d 282, 294 (D.
Mass. 2003), vacated on other grounds, 362 F.3d 50 (1st Cir. 2004). That situation
transforms an injury that might otherwise be remedied with monetary damages into an
irreparable one. See id. (“While financial loss is traditionally not deemed an irreparable
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 harm,” because of the State’s sovereign immunity plaintiffs “will suffer irreparable
financial damage in lost reimbursements that they will be unable to recover.”); see
Rosario-Urdaz v. Rivera-Hernandez, 350 F.3d 219, 222 (1st Cir. 2003) (“The
unavailability of back pay or other monetary damages against either the Commonwealth
or the defendants in their official capacities goes a long way toward establishing
irreparable injury.”).
Courts have found injuries to plaintiffs to be irreparable where the Eleventh
Amendment barred recovery of damages against the state. See Kansas Health Care
Ass’n, Inc. v. Kansas Dept. of Soc. & Rehab. Services, 31 F.3d 1536, 1543 (10th Cir.
1994) (“Because the Eleventh Amendment bars a legal remedy in damages, and the
court concluded no adequate state administrative remedy existed, the court held that
plaintiffs’ injury was irreparable. We agree.”); Temple Univ. v. White, 941 F.2d 201, 215
(3d Cir. 1991) (“As to the inadequacy of legal remedies, the Eleventh Amendment bar to
an award of retroactive damages against the Commonwealth clearly establishes that any
legal remedy is unavailable and that the only relief available is equitable in nature.”)
(citation omitted)); Idaho v. Coeur d’Alene Tribe, 794 F.3d 1039, 1046 (9th Cir. 2015)
(“Purely economic harms are generally not irreparable, as money lost may be recovered
later, in the ordinary course of litigation. But . . . the Tribe’s sovereign immunity likely
would bar the State from recovering monetary damages incurred during the course of
this litigation . . . .”) (citation omitted); United States v. Charmer Indus., Inc., 711 F.2d
1164, 1169 n. 3 (2d Cir. 1983) (“The court rejected the suggestion that liquor license
revocation might constitute irreparable injury, on the assumption that injury of that
type would be compensable in damages. Given the immunity of states under the
Eleventh Amendment to the Constitution from damage suits without their consent . . . ,
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 the availability of an award, even assuming that damages would be reasonably
susceptible to calculation, seems doubtful.”).
Here, if WPMC is not permitted to participate in Maine’s adult use marijuana
market under Section 202(2), or Wellness Connection is forced by the residency statute
to enter the market in a corporate form that limits its ability to raise capital, and the
Court later determines that the statute is unconstitutional, the Eleventh Amendment
would bar Plaintiffs from suing the State for damages. See New Hampshire v. Ramsey,
366 F.3d 1, 14 (1st Cir. 2004) (a state’s immunity under the Eleventh Amendment
constitutes “a defense to monetary liability,” and indeed “provides an immunity from
suit.”). Their injury would therefore be irreparable.
2. Plaintiffs’ injury would be irreparable because it is hard to
put a monetary value on the harm caused by the loss of a
unique or fleeting business opportunity.
While “it has long been held that traditional economic damages can be remedied
by compensatory awards, and thus do not rise to the level of being irreparable,” courts
have held that “some economic losses can be deemed irreparable.” Vaqueria Tres
Monjitas, Inc. v. Irizarry, 587 F.3d 464, 485 (1st Cir. 2009). The First Circuit has
“recognized that the loss of a unique or fleeting business opportunity can constitute
irreparable injury.” Starlight Sugar, Inc. v. Soto, 114 F.3d 330, 332 (1st Cir. 1997).
“[A]s a practical matter the potential value of an evanescent business opportunity may
be extremely difficult to measure, after the fact.” Id.
If enforcement of the residency requirement is not enjoined, WPMC cannot
obtain a license to enter Maine’s marijuana market. See Murphy Declaration ¶¶ 5, 9. The
injury caused to WPMC by denial of the opportunity to be present at the creation of
Maine’s marijuana market—a moment of unique and fleeting business opportunity—
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 would be irreparable. See id.; see also Starlight Sugar Inc. v. Soto, 909 F. Supp. 853,
862 (D.P.R. 1995), aff’d, 114 F.3d 330 (1st Cir. 1997) (“[R]ecognizing that ‘timing is
everything’ in business, the First Circuit has recognized that the frustration of a
business opportunity can constitute irreparable injury.”) (citing Hyde Park Partners v.
Connolly, 839 F.2d 837, 853 (1st Cir.1988)) (emphasis added); Springfield Terminal Co.
v. United Transp. Union, 688 F. Supp. 68, 69 (D. Me. 1988) (“It is well established that
the loss of first amendment freedom constitutes irreparable injury, Elrod v. Burns, 427
U.S. 347, 373 (1976), and the principle of Elrod is plainly applicable to other prospective
denials of constitutional rights in which a constitutionally protected opportunity would
be irretrievably lost if temporary injunctive relief were not granted.”).
Further supporting the conclusion that Plaintiffs’ injuries would be irreparable is
the First Circuit’s observation that “harm to goodwill, like harm to reputation, is the
type of harm not readily measurable or fully compensable in damages—and for that
reason, more likely to be found ‘irreparable.’” K-Mart Corp. v. Oriental Plaza, Inc., 875
F.2d 907, 915 (1st Cir. 1989). At a new market’s inception, of course, goodwill has yet to
be created; indeed, the essential task for entrants into a new market is to create goodwill
that did not previously exist. If harm to goodwill is not readily measurable or fully
compensable in damages, the same must be true of the denial of the opportunity to
establish goodwill in the first place. That too constitutes irreparable harm. See
Vaqueria Tres Monjitas, Inc. v. Irizarry, 587 F.3d 464, 485 (1st Cir. 2009) (“[W]e have
held that the irreparable harm requirement may be met upon a showing that ‘absent a
restraining order, [a party] would lose incalculable revenues and sustain harm to its
goodwill.’”) (quoting Ross–Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 19
(1st Cir.1996)).
16
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 WPMC will be denied any opportunity to establish goodwill since it cannot obtain
a license. Murphy Decl. ¶ 5. WPMC’s inability to create a brand, build a reputation, and
establish customer loyalty at the market’s inception will harm it in ways that cannot be
reduced to a monetary damages award. See Vaqueria Tres Monjitas, Inc., 587 F.3d at
485. Along the same lines, the First Circuit has observed that an economic loss may be
irreparable “where the potential economic loss is so great as to threaten the existence of
the movant’s business.” Vaqueria Tres Monjitas, 587 F.3d at 485 (quotation marks
omitted). Here, the loss to WPMC if the injunction it seeks is denied would not just
threaten WPMCs marijuana business—it would prevent the business from ever coming
into existence. That harm would be irreparable. See id.
Wellness Connection will also be unable to take full advantage of the unique
opportunities at the start of the adult use market. As explained in the Declaration of
Ron MacDonald, because of the Title 28-B residency requirement, Wellness Connection
does not have the capital to purchase, among other things, equipment needed to help
the company increase the speed and efficiency of its production operations to meet full
customer demand. See MacDonald Dec. ¶¶ 10 - 11. This harm is irreparable since “the
inability to supply a full line of products may irreparably harm a merchant by shifting
purchasers to other suppliers.” Vaqueria Tres Monjitas, 587 at 485 (emphasis added).
If the residency requirement remains, Wellness Connection will lose customers to
competitors and sustain harm to its goodwill. This too is irreparable harm.
Although it is not a bright-line rule that a deprivation of a constitutional right
necessarily constitutes an irreparable injury, “the best approach is to consider the
deprivation of a plaintiff’s rights under the dormant commerce clause (or any other
constitutional provision) as a factor in assessing irreparable injury.” Starlight Sugar,
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15345522.1

 909 F. Supp. at 862 (emphasis in original); see also Vaqueria Tres Monjitas, 587 F.3d at
484–85 (“[I]t cannot be said that violations of plaintiffs’ rights to due process and equal
protection automatically result in irreparable harm.”) (emphasis in original). If the
Court is uncertain as to whether the loss of the unique and fleeting business opportunity
just described constitutes an irreparable injury, the fact that the cause of this loss would
be a violation of Plaintiffs’ constitutional rights is an additional factor that should be
enough to resolve that uncertainty in their favor.
C.

The balance of harms weighs in favor of a preliminary
injunction.

The irreparable injury to Plaintiffs if injunctive relief is denied and Plaintiffs go
on to prevail on the merits would, as just explained, be stark and severe. In contrast, the
injury to the State if injunctive relief is granted and Plaintiffs do not prevail on the
merits would be much more limited: at that point Plaintiffs could simply be required to
change their ownership structure or sell the business to owners who complied with
Section 202(2). The balance of harms therefore favors Plaintiffs.
D.

A preliminary injunction would serve the public interest.

The First Circuit has made clear that, if a statute is unconstitutional, “the public
interest would be adversely affected by denial of . . . an injunction” against its
enforcement. Hyde Park Partners, L.P. v. Connolly, 839 F.2d 837, 854 (1st Cir. 1988)
(affirming preliminary injunction issued in dormant Commerce Clause challenge). This
Court has said that “[g]iven the likely unconstitutionality” of a law, “the public interest is
best served by the issuance of a preliminary injunction” against its enforcement, as “[i]t
is hard to conceive of a situation where the public interest would be served by
enforcement of an unconstitutional law or regulation.” Condon v. Andino, Inc., 961 F.

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 Supp. 323, 331 (D. Me. 1997). As explained above, Section 202 is likely
unconstitutional. The public interest therefore favors the injunction Plaintiffs seek.
CONCLUSION
The requirements for obtaining preliminary injunctive relief have been met. The
Court should therefore grant this motion and order preliminary injunctive relief.
___/s/ Matthew Warner___________
Matthew S. Warner, Maine Bar No. 4823
Jonathan G. Mermin, Maine Bar No. 9313
Attorneys for NPG, LLC d/b/a Wellness
Connection
Preti Flaherty Beliveau & Pachios LLP
One City Center
P.O. Box 9546
Portland, ME 04112-9546
207.791.3000
mwarner@preti.com
jmermin@preti.com

_/s/ Michael D. Traister_____________
Michael D. Traister, Esq.
Murray Plumb & Murray, P.A.
75 Pearl Street, P.O. Box 9785
Portland, ME 04101-5085
207.773.5651
mtraister@mpmlaw.com
Thomas O’Rourke (PA 308233)
Cozen O’Connor
1650 Market Street, Suite 2800
Philadelphia, PA 19103
215-665-5585
tmorourke@cozen.com
Pro hac vice application forthcoming
Attorneys for Wellness and Pain
Management Connection, LLC
March 20, 2020

19
15345522.1

 CERTIFICATE OF SERVICE
I hereby certify that on March 20, 2020, I electronically filed the Motion for
Preliminary Injunction with the Clerk of Court using the CM/ECF system which will
send notification of such filing(s) to the counsel of record.
__/s/ Matthew Warner___________
Matthew S. Warner, Maine Bar No. 4823
Attorneys for NPG, LLC d/b/a Wellness
Connection
Preti Flaherty Beliveau & Pachios LLP
One City Center
P.O. Box 9546
Portland, ME 04112-9546
207.791.3000
mwarner@preti.com
March 20, 2020

20
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