The Portland City Council is standing by its plan to give Mainers an advantage in the local marijuana market, voting late Monday night against the advice of municipal attorneys a week after the state abandoned its efforts to give residents exclusive rights to the $300 million state market.

Supporters argued the city’s five-point retail licensing preference for Mainers would be easier to defend in court than the state’s outright prohibition on out-of-state applicants until 2021. Unlike the state’s all-or-nothing rule, the city favors locals only if it gets more than 20 applications and must break a tie among those with similar business experience, bank deposits and employee wages.

“If we decide we are going to not include this, to me it seems we just need to abandon the matrix altogether,” said Councilor Belinda Ray. “It was something that was very important as we were putting together the matrix. That’s why it has a high point value. Many of us felt that we wanted to make sure that we were focused on allowing the local market to grow.”

But councilors Nick Mavodones and Tae Chong didn’t want to ignore the advice of the city attorneys who drafted the amendment that would have removed the residency preference. The COVID-19 pandemic has left the city too broke to fend off an avoidable lawsuit or waste the time of staff attorneys, they said.

Also, a legal challenge could result in an injunction that could delay the city’s ability to award any marijuana licenses, Chong said.

The vote on the staff amendment that would have stripped the residency bonus points from the business-license evaluation failed 5-3, with Mavodones, Chong and Mayor Kate Snyder voting to get rid of the residency points.

It is unclear what will happen now that Portland has adopted its marijuana licensing, fees and rules ordinance. After the state abandoned its residency requirement last week, a lawyer for Wellness Connection, the largest cannabis company in Maine, said the company expected Portland to drop its resident preference because of the same constitutional concerns raised in his client’s lawsuit challenging the state requirement.

City lawyers said the amendment to strip the residency bonus was meant to eliminate risk, not a sign the matrix was indefensible.

“I’m not saying if this was challenged we would lose, but it’s a risk,” said attorney Anne Torregrossa. “Any time you are picking and choosing winners based on in-state versus out-of-state, or even in-city versus out-of-city, you run the risk of running up against the Constitution. This is a legal risk. The state scheme is slightly different but it chose not to take that risk.”

In its lawsuit, Wellness Connection argued that a residency requirement violates its constitutional right to interstate commerce by explicitly favoring Mainers over non-residents. Wellness, whose flagship store is on Congress Street in Portland, is controlled by an out-of-state investor that is owned by multinational Acreage Holdings.

The courts have struck down residency requirements on constitutional grounds before, but not in the cannabis industry, which still violates federal law. Other legal states such as Colorado and Oregon have abandoned resident-only licensing mandates for policy reasons, not legal ones.

A Wellness spokesperson did not return a call Tuesday seeking comment on the City Council’s vote. On Monday, during the public comments preceding the vote, the Wellness attorney who filed the lawsuit against the Maine Office of Marijuana Policy urged the council to follow the state’s example.

“There are good policy reasons not to have a residency requirement, but the big reason is that it’s unconstitutional,” said attorney Matt Warner. “The courts have repeatedly found dozens if not more times that laws like this which gives a preference to the citizens of one state over the citizens of another violates the Constitution.”

Many residents who shared their opinions with the council before the hours-long debate on an ordinance more than a year in the making urged Portland to abandon a cap on the number of retail licenses altogether so everyone, Maine residents included, would have a chance to succeed or fail on their own merits.

But councilors stood by the 20-store cap as the best way to “go slow” when it comes to launching the controversial new industry.

When it adopted its marijuana ordinance Monday, Portland joined 40 other towns to allow some kind of adult-use marijuana business. Maine had planned to launch adult-use sales next month but put its plans on indefinite hold because of public health concerns raised by the COVID-19 pandemic.

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