The Rhode Island Cannabis Control Commission (CCC) is looking for a way to move forward on its long-awaited adult-use retail license lottery after the First Circuit Court of Appeals halted the process on April 8.
“The effect of the preliminary injunction issued by the court is that the commission is stopped by court order from proceeding with its current application and licensing period,” explained CCC attorney Mariana Ormonde during the commission’s April 17 meeting. “This means that the commission is not permitted to finalize its application review process or hold the selection process for awarding any retail licenses.”
Ormonde further explained the case has been moved back to the U.S. District Court of Rhode Island from the circuit court and remains ongoing, despite the preliminary injunction.
“This language did not prohibit the commission from continuing its application process, but it did prohibit the commission from issuing any licenses until such time that the district court had an opportunity to rule on the merits of those claims,” added Ormonde.
Jensens find temporary success
The court order is the result of a lawsuit from Jeffrey and Justyna Jensen, who have been challenging cannabis license residency requirements across the country. Unlike similar cases in other states, the Jensens were joined by others in Rhode Island. John Kenney and Justin Palmore each had their own lawsuits against the state consolidated into the Jensens’ case.
“Each of these Plaintiffs contend that the Act excludes them from the Rhode Island recreational cannabis market and that the Act is unconstitutional because it expressly favors in-state residents over out-of-state residents,” said the circuit court’s 28-page order.
U.S. District Judge Melissa DuBose noted that although the First Circuit decision in Northeast Patients Group v. United Cannabis Patients and Caregivers of Maine, which established the idea that federally illegal cannabis markets could still be governed by constitutional law, was applied to medical cannabis, the ruling also has precedence when considering adult use.
“The Court finds that all Plaintiffs have shown a likelihood of success on the merits of their Dormant Commerce Clause claims,” DuBose wrote in the order.
“With this recent decision, the circumstances have changed,” said Commissioner Layi Oduyingbo during the CCC’s April 17 meeting. “Now that there is a pretty significant bump in the road, and there’s an appeal that’s been filed, we obviously have things to look at that we can’t fully discuss in terms of strategy. But we intend to continue to move forward to the extent that we’re able to do so.”
Medical cannabis retailers serve adult-use sales
Rhode Island currently has eight compassionate care centers that are medical and adult-use hybrids and 57 independent cultivators. Adult-use sales officially began in Rhode Island on Dec. 1, 2022, but the state’s existing medical dispensaries were the only establishments allowed to sell to the general public. More than three years later, the medical cannabis operators continue to be the only source for legal cannabis in the state.
State regulations split up Rhode Island into six regions, with each getting four licenses. Of those 24, each region had one license reserved for social equity candidates and one license for worker co-ops.
The CCC approved the final rules that allow for the issuance of retail licenses on April 11, 2025. Ninety-seven applicants submitted their bids by the Dec. 29 deadline to be included in the lottery. Not every reserved license type received an application, so the state planned to issue a total of 20 licenses.
Jeffrey and Justyna Jensen sued the state shortly after regulators announced the proposed licensing scheme in 2024.
Jeffrey Jensen has established a track record of suing states over residency requirements in cannabis licensing, with lawsuits in New York, Washington state, California and Maryland. Jensen was successful in the Second Circuit of Appeals, which ruled that New York’s residency requirements do violate the U.S. Constitution’s Dormant Commerce Clause (DCC).
On the other hand, the Ninth Circuit Court of Appeals ruled against Jensen and his California cases, stating that the DCC does not apply to an industry that remains federally illegal. Jensen, who did not respond to an emailed request for comment, filed for a rehearing before the Ninth Circuit En Banc, which remains pending.
The split appellate court decisions are teeing up a potential U.S. Supreme Court hearing on the matter.
