California-based attorney Jeffrey Jensen continues to oppose city and state rules that limit license holders to local residents, despite unsuccessful attempts at restraining orders, by turning his attention to Rhode Island. At the same time, Jensen’s lawsuits to overturn social equity licensing restrictions on the West Coast are faltering in court.
Justyna Jensen sued Rhode Island’s Cannabis Commission on May 15, with Jeffrey Jensen listed as one of her attorneys. The two, who said they were married in a 2019 California application for a retail cannabis license, are involved in a similar lawsuit in Maryland. Jeffrey Jensen is also serving as attorney for Kenneth Gay, a Michigan resident suing New York, Washington state and the California cities of Sacramento and Los Angeles for their respective residency or social equity priority requirements for cannabis licenses.
Jeffrey Jensen, who holds stakes in at least a couple of these companies, has consistently argued that the dormant commerce clause of the U.S. Constitution nullifies state cannabis resident requirements for licensing. But he was not involved in the sole case to affirm that legal argument, when out-of-state investors successfully sought the right to buy medical cannabis licenses from Northeast Patients Group in Maine.
“The Cannabis Act violates the dormant Commerce Clause by requiring applicants for licenses to be at least 51% owned by Rhode Island residents,” said the 10-page complaint in Jensen v. Rhode Island Cannabis Commission, et al., filed in the U.S. District Court in Rhode Island.
Rhode Island’s legislature legalized adult-use cannabis on May 25, 2022. The first day of legal adult-use sales occurred on Dec. 1, 2022. Since then, the market has been dominated by the existing medical cannabis providers who were the first to convert to adult-use sales.
Currently, only seven vertically integrated companies serve both the medical and adult-use market in Rhode Island, with an additional 60 cultivators supplying the market.
Rhode Island has plans to issue two more licenses for vertically integrated operations and 24 new licenses for adult-use retail evenly split between six regions in the state, with half of them going toward social equity applicants and worker-owned cooperatives. But the Cannabis Control Commission must still finalize regulations that would allow the state to begin accepting license applications.
Until then, Justyna Jensen is arguing that she should get a shot at a license despite being a resident of California.
“Plaintiff does not qualify for a social equity license because she has never lived in Rhode Island; has never lived in a disproportionately impacted area; has never been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under Rhode Island law; and is not a member of an impacted family,” said the complaint.
Nevertheless, the Justyna Jensen argues that she is entitled to apply for a cannabis licenses in the Ocean State.
The Jensens’ other legal battles
The lawsuit is similar to others that involve the Jensens, including cases in New York, Maryland, Washington and California.
Thus far, Jensen and his clients have only been successful in delaying New York’s conditional adult-use retail dispensary rollout and receiving a license as part of a court settlement. Meanwhile, the attorney is currently involved in several appeals in other cases.
According to the CRB Monitor database, Jeffrey Jensen is listed as president of Peridot Tree Inc., a cannabis company attempting to gain licenses in Washington and California; an investor in ARMLA One Inc., which has an active dispensary license in Los Angeles; and chief executive officer and investor of Variscite NY One Inc., an as-yet unopened dispensary in upstate New York.
He was also listed as a co-owner of Gompers SocEq Inc., which sued the City of Los Angeles before dropping the case. The license for Gompers SocEq Inc. is currently listed as inactive.
Jeffrey Jensen, representing Varicite NY One, successfully halted New York’s roll out of conditional adult-use retail dispensary licenses because it was reserved for applicants with a cannabis-related conviction in New York. Jensen represented Gay, whose prior conviction was from his home state of Michigan. State regulators ultimately settled the lawsuit, agreeing to grant the applicant a retail license in the Finger Lakes region of the state.
The two Jensens previously sought a temporary restraining order on the State of Maryland issuing adult-use cannabis licenses based on Justyna Jensen’s ineligibility to apply. Much like other cases brought by Jeffrey Jensen, the Maryland suit also cites a violation of the U.S. Constitution’s dormant commerce clause in restricting licensing to residents.
Despite the state moving ahead with its social equity licensing lottery, the Jensens have appealed the TRO denial.
“Ms. Jensen does not challenge Maryland’s laws or regulations regarding the handling, processing, tracking, taxing, etc. of cannabis,” wrote the plaintiffs in the brief filed before the Fourth Circuit Court of Appeals. “Rather, the only issue presented in this litigation is whether Maryland may favor in-state residents over nonresidents in investing in the ownership of a state-licensed cannabis business.”
In Washington, Peridot Tree sued to invalidate the social equity requirements and to get an emergency restraining order to halt licensing in the state. A federal judge in the Western U.S. District Court in Washington denied the TRO in Peridot Tree WA Inc. v. Washington State Liquor and Cannabis Control Board, et al., and Jensen appealed that decision to the Ninth Circuit Court of Appeals on Jan. 11. Oral arguments on that matter are scheduled for August. Meanwhile, the District Court granted the state’s motion to dismiss the case on May 31, based on the fact that cannabis is federally illegal and thus not subject to the dormant commerce clause. That decision was also appealed on June 2.
Lawsuits challenging the cities of Los Angeles’ and Sacramento’s social equity licensing preferences also await rulings in California federal courts. The Ninth Circuit Court of Appeals ruled in March that the Eastern U.S. District Court of California must weigh in on the legitimacy of Jensen’s constitutional argument in the case of Peridot Tree, Inc. v. City of Sacramento. But it allowed the lower court to pause its filing time limits while Jensen’s other case, Variscite, Inc. v. City of Los Angeles was still active. Jensen has an upcoming hearing on Aug. 28 in the Central U.S. District Court of California for the Variscite case, during which the city will argue its May 29 motion to dismiss.
Jeffrey Jensen did not respond to requests for comment.
