The DCC Circuit Split

Last verified: April 2026

The Constitutional Question

The Dormant Commerce Clause (DCC) is the inverse of the federal Commerce Clause: just as Congress has authority to regulate interstate commerce, so the states are restricted from discriminating against interstate commerce. State residency requirements that favor in-state actors over out-of-state actors face strict-scrutiny review under DCC.

Cannabis presents a unique constitutional puzzle: federal law (Controlled Substances Act) makes cannabis Schedule I, meaning there is no federally-lawful interstate commerce in cannabis. The Dormant Commerce Clause typically protects interstate commerce, so the question becomes whether the doctrine reaches commerce that federal law itself prohibits.

The Circuit Split

The First Circuit — NPG v. Maine (2022)

NPG v. Maine Department of Administrative and Financial Services (1st Cir. 2022) held that Maine’s state cannabis residency requirement violates the Dormant Commerce Clause. The First Circuit was the first federal appellate court to reach the question on the merits, and the holding established the framework that the Second Circuit later adopted.

The Second Circuit — Variscite NY One (August 2025)

Variscite NY One v. NYS Office of Cannabis Management (2d Cir. August 2025, 2-1) extended the First Circuit’s reasoning to New York’s CAURD program residency-linked priority. Judge Dennis Jacobs, writing for the majority:

“The dormant commerce clause prohibits state protectionism unless Congress clearly authorizes specific protectionist laws.”

The Second Circuit’s 2-1 split signaled the contested nature of the question even within the panel; the dissenting judge would have held that federal Schedule I status removes cannabis from DCC scrutiny.

The Ninth Circuit — Peridot Tree WA (January 2026)

Peridot Tree WA, Inc. v. Washington State Liquor & Cannabis Control Board (9th Cir. January 2026, 3-0) went the opposite direction. The Ninth Circuit held that Washington’s and Sacramento’s residency rules survive DCC challenge because federal illegality means the Constitution does not protect interstate commerce in marijuana. The unanimous 3-0 panel produced a clear circuit-split signal.

Appellants in Peridot Tree WA had until March 17, 2026 to seek en banc review or Supreme Court certiorari. As of April 2026, the procedural status of any cert petition is unclear from public sources.

The Supreme Court Resolution

The split sets up a likely Supreme Court resolution within the next 18–24 months. The constitutional question — whether the Dormant Commerce Clause reaches state cannabis residency rules despite federal Schedule I status — is the kind of clean, well-developed circuit split that the Supreme Court typically accepts for review.

Possible Supreme Court outcomes:

• Adopts First/Second Circuit view — state cannabis residency rules unconstitutional under DCC. Would force significant restructuring of state-level equity programs that retain residency anchors.
• Adopts Ninth Circuit view — federal Schedule I status removes DCC protection; states free to use residency anchors. Would entrench the Washington/Sacramento approach and allow other states to tighten residency rules.
• Splits the difference — some narrower holding that allows residency rules under specific conditions. Less likely but possible.
• Declines review — leaves circuit split intact, with state policy effectively determined by which circuit a given state sits in.

Implications for Detroit

Detroit’s revised 2022 ordinance was designed to be DCC-durable regardless of how the Supreme Court resolves the question:

• The revised ordinance does not use Detroit-residency anchors for licensing eligibility
• “Equity applicant” status tracks Michigan’s state-defined social-equity criteria (20% poverty rate + above-median marijuana conviction rate)
• Legacy Detroiter status is preserved as a support category (mentoring, financing, city-property) but is not a licensing-eligibility prerequisite

If the Supreme Court adopts the First/Second Circuit view, Detroit’s revised ordinance survives largely intact. If the Supreme Court adopts the Ninth Circuit view, Detroit could potentially tighten residency rules back — but the political and operational benefits of the two-track design likely keep the revised model in place regardless.

Implications for Other Cities

The Supreme Court resolution will determine the durability of cannabis equity programs across the country:

• Los Angeles — Social Equity Program tied to past cannabis arrest, low income, and City of Los Angeles residency in disproportionately impacted areas. Vulnerable post-Ninth Circuit Peridot on residency.
• Oakland — Equity permit categories based on past arrest in Oakland or residency in police beats with above-median arrest rates. Vulnerable on residency component.
• Chicago — State-level Illinois social equity (disproportionately impacted area, arrest, family-member arrest) — no Chicago-specific residency. More durable.
• New York City — New York State CAURD program centered on past New York cannabis convictions. Partially enjoined under Variscite (2025).
• Detroit — State-defined social equity, separate licensing tracks, Legacy Detroiter as support category. The constitutionally durable template.

The Broader Federal Framework

The Supreme Court resolution will also have implications for federal Schedule III rescheduling. If cannabis moves from Schedule I to Schedule III (as the December 18, 2025 executive order directed), the constitutional analysis may shift — Schedule III status would mean cannabis is federally scheduled but legal for medical use under federal supervision, which could change DCC analysis. The interaction between federal rescheduling and the DCC question is not yet developed in the case law.

What to Watch

• Supreme Court cert decisions on Peridot Tree WA or related cases
• Federal Schedule III completion — could reshape the constitutional question
• State-level legislative responses in jurisdictions with vulnerable residency-anchored equity programs
• Other circuit-court rulings that may further develop the split or align with one of the existing positions

Related on this site: Detroit Cannabis Expungement & De..., Detroit Equity Outcomes, Send a Message.