PROVIDENCE – A federal judge on Wednesday temporarily stymied the expansion of Rhode Island's cannabis industry by blocking state regulators from conducting a lottery for up to 24 cannabis retail licenses sometime this spring.
The preliminary injunction, issued by U.S. District Court Judge Melissa DuBose, was in response to constitutional challenges filed by three prospective cannabis retailers from Florida and California who contested that the state's residency requirements and social equity provisions for cannabis licenses violated the Dormant Commerce Clause and Equal Protection Clause, respectively.
Dismissed in federal court in February 2025, the legal challenges were revived last November by the U.S. First Circuit Court of Appeals.
In addition to arguing there are no violations of the Dorman Clause because cannabis is prohibited on the federal level, the state has argued that its social equity provisions are "a plausible means"... to advance the legitimate goal of reduc[ing] barriers to ownership and/or participation in the cannabis industry for individuals and communities most adversely impacted by the enforcement of cannabis-related laws[.]."
However, DuBose wrote that allowing an individual to be eligible for the social equity license even "if they suffered no harm from cannabis criminal laws but lived in a certain area, yet making another individual ineligible if they suffered harm from cannabis criminal laws but lived in a different area, would likely fail to survive rational basis scrutiny."
And the state's third contention that the plaintiffs are causing harm by disrupting the current licensing process "at the eleventh hour carries no merit," wrote DuBose.
Applicants and the cultivators who rely upon them have long criticized the licensing roll-out that has been marked by repeated delays. A year passing before the formation of the Cannabis Control Commission, which then took almost two years to issue regulations.
Acknowledging there is a "hazy area between the United States’ federal prohibition on marijuana and the State of Rhode Island’s emerging recreational marijuana market," DuBose wrote that the plaintiffs have a “likelihood of success on the merits" and suggested the state could refund application fees or transfer existing applications to the next lottery period, which has yet to be determined.
And in the face of these legal challenges, any fall-out from the commission's decision to move forward with its licensing scheme will be "blunt" and "self-inflicted."
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
