PROVIDENCE – The U.S. First Circuit Court of Appeals has revived a constitutional challenge to the Rhode Island's cannabis retail licensing requirements that disputes its social equity provisions, including the requirement that cannabis retailers with a social equity license be at least 51% owned by Rhode Island residents.
The opinion reverses a February dismissal by the U.S. District Court for Rhode Island. The lawsuit was filed by Justyna Jensen, wife of Beverly Hills, Calif., attorney Jeffrey Jensen. The defendants are the R.I. Cannabis Control Commission and its former chairperson, Kimberly Ahern.
The plaintiffs argue Rhode Island's provisions violate the Dormant Commerce Clause, which prohibits discrimination against residents from other states, and the Equal Protection Clause, which protects against discrimination based on factors such as race and religion. Both clauses are found in the U.S. Constitution.
Referencing previous rulings from the First and Second Circuits that have invalidated similar residency-based cannabis licensing restrictions in other states, the Nov. 25 opinion issued by the three-judge panel orders "prompt consideration" on the constitutional merits of Jensen's claims at least 45 days before the commission issues any new retail licenses.
The appeals court was critical of the February "one-paragraph text order" issued by
U.S. District Court Judge Melissa DuBose, which they said cited three cases "without any analysis as to the relevance of those cases,"
rested on "erroneous reasoning," and "has delayed resolution of the complex merits issues in this case."
In legal filings, the state had contended that the Dormant Commerce Clause outlined in Article 1 of the U.S. Constitution does not apply to its recreational cannabis sector because its language relates to real and legal markets. It further argued Jensen lacked standing to bring the challenge because the Commission had yet to finalize its licensing process.
The Rhode Island Cannabis Act authorized 24 additional retail licenses across six geographic zones, including one “social equity” license per zone, defining “social equity applicant” to include individuals with a cannabis offense eligible for expungement or those from “impacted families,” as well as individuals who have lived for five of the past 10 years in a “disproportionately impacted area.”
In August, the R.I. Cannabis Control Commission began accepting pre-applications and earlier this month said that just 38% of those vying for a social equity cannabis retail license qualified under the eligibility criteria to submit a formal application
Starting Jan. 1 the Cannabis Office will have 90 more days to verify applicants eligible to be placed in a lottery.
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
