R.I. Excellence in the Law
Law may unconstitutionally favor in-state residents
Eric T. Berkman//May 4, 2026//
State enjoined from enforcing R.I. Cannabis Act
DEPOSITPHOTOS.COM
Law may unconstitutionally favor in-state residents
Eric T. Berkman//May 4, 2026//
Out-of-state plaintiffs could challenge the Rhode Island Cannabis Act under the Dormant Commerce and Equal Protection clauses of the U.S. Constitution, a federal District Court judge has determined.
The Cannabis Act, passed in in 2022, authorized the state Cannabis Control Commission to issue 24 licenses for recreational marijuana dispensaries divided among six geographic zones.
The law also required that applicants be residents of Rhode Island or businesses headquartered with at least 51-percent ownership by Rhode Island residents.
Additionally, the law reserved one license in each zone for “social equity” applicants “disproportionately impacted by criminal enforcement of marijuana laws,” according to criteria such as having nonviolent marijuana arrests or convictions that are eligible for expungement under Rhode Island law or living in “disproportionately impacted” areas that meet certain poverty and cannabis-related arrest and conviction benchmarks.
The plaintiffs, residents of other states who wished to apply for recreational licenses in Rhode Island, filed suit alleging that the Cannabis Act was unconstitutional as written.
Specifically, they asserted that, as non-residents, they were by definition excluded from applying for recreational licenses.
The plaintiffs argued that that violated the Dormant Commerce Clause, a constitutional doctrine that bars states from making laws that favor in-state economic interests over out-of-state competitors.
Finding the claims plausible, Judge Melissa R. DuBose issued a preliminary injunction blocking the state from enforcing the law.
“[The state defendants argue] that the Challenged Provisions … are narrowly tailored to advance valid state interests,” DuBose wrote. “The specific valid state interests advanced by the Defendants in support of the Act are (1) health and safety, (2) that requiring a bare majority of ownership and control of cannabis retail licenses by in-state residents ensures that the Commission will possess meaningful authority, jurisdiction, and oversight over all retail license holders, and that (3) a partial residency requirement also advances R.I.’s legitimate interest in minimizing conflict with federal law and law enforcement priorities. Each asserted interest is rejected.”
The plaintiffs asserted that, as non-residents, they were by definition excluded from applying for recreational licenses in Rhode Island, which violated the Dormant Commerce Clause.
DuBose also found that the plaintiffs stated a plausible claim that the provisions violated the Equal Protection Clause of the 14th Amendment,
The 28-page decision is Jensen v. Rhode Island Cannabis Control Commission, et al.; Kenney v. Rhode Island Cannabis Control Commission, et al.; Palmore v. Rhode Island Cannabis Control Commission, et al., Lawyers Weekly No. 52-054-26. The full text of the ruling can be found here.
Jeffrey M. Jensen of Beverly Hills, who represented plaintiff Justyna Jensen, said his client offered the state a “zero-dollar settlement” in 2024 and the state declined.
“So Rhode Island entirely caused any harm to the applicants,” he said without offering further comment.
Albin Moser of Providence, who represented both Jensen and another plaintiff, California resident Justin Palmore, could not be reached for comment. Providence attorney Aaron L. Weisman, counsel for plaintiff John Kenney of Florida, also could not be reached.
The Attorney General’s Office, which represented the state, did not respond to interview requests.
In-state bias?
The General Assembly passed the Cannabis Act on May 25, 2022, establishing the Cannabis Control Commission to oversee regulation, licensing and control of all cannabis and marijuana use.
The CCC’s powers included adopting rules and regulations for implementation and enforcement of the act and for determining which applicants would be granted licenses.
The act gave the CCC authority to grant 24 retail licenses following issuance of final rules and regulations, which the commission promulgated on May 1, 2025.
According to the regulations, four retail licenses would be granted in each of six geographical zones.
The act defined an applicant as either a Rhode Island resident or business entity principally located in Rhode Island in which 51 percent of the equity was owned by Rhode Island residents.
THE ISSUE
Could out-of-state plaintiffs challenge the Rhode Island Cannabis Act under the Dormant Commerce and Equal Protection clauses of the U.S. Constitution?
DECISION
Yes (U.S. District Court)
LAWYERS
Jeffrey M. Jensen of Beverly Hills, Albin Moser of Providence, and Aaron L. Weisman of Pannone, Lopes, Devereaux & O’Gara, Johnston (plaintiffs)
Chelsea Baittinger, Jeff Kidd, Katherine Connolly Sadeck and Matthew J. Shaw, of the Attorney General’s Office, Providence (defense)
Jensen v. Rhode Island Cannabis Control Commission, et al. Kenney v. Rhode Island Cannabis Control Commission, et al. Palmore v. Rhode Island Cannabis Control Commission, et al.
THE ISSUE
Could out-of-state plaintiffs challenge the Rhode Island Cannabis Act under the Dormant Commerce and Equal Protection clauses of the U.S. Constitution?
DECISION
Yes (U.S. District Court)
LAWYERS
Jeffrey M. Jensen of Beverly Hills, Albin Moser of Providence, and Aaron L. Weisman of Pannone, Lopes, Devereaux & O’Gara, Johnston (plaintiffs)
Chelsea Baittinger, Jeff Kidd, Katherine Connolly Sadeck and Matthew J. Shaw, of the Attorney General’s Office, Providence (defense)
The statute also stated that, in each zone, one license would be reserved for a “social equity” applicant who had been “disproportionally impacted” by criminal enforcement of marijuana laws.
That included individuals with nonviolent marijuana convictions, their immediate family, and individuals who had lived in “disproportionally impacted areas” for at least five of the past 10 years.
More specifically, the statute required social equity applicants to have at least 51-percent ownership and control by individuals who had resided for at least five of the previous 10 years in a disproportionately impacted area, or to have at least 51-percent ownership by someone who had been arrested for or convicted of an offense eligible for expungement in Rhode Island or be a member of an impacted family.
Alternatively, an applicant with at least 10 full-time employees could qualify if at least 51 percent of employees resided in a disproportionately impacted area or had been arrested or convicted of an offense eligible for expungement in Rhode Island.
Additional paths to eligibility included the ability to demonstrate business experience that promoted economic empowerment in disproportionally impacted areas or having income that did not exceed 400 percent of the median income in a disproportionally impacted area.
The act defined “disproportionately impacted area” as one with a poverty rate of at least 20 percent; at least 75 percent of the children in the area participating in the federal free lunch program; at least 20 percent of households in the area receiving assistance under the Supplemental Nutrition Assistance Program; or having a disproportionately high rate of cannabis-related arrests and convictions or a history of disparate enforcement of cannabis prohibition compared to the rest of the state.
The definition of “disproportionately impacted area” also referred to “any offense that is eligible for expungement” under Rhode Island laws.
Jensen, Kenney and Palmore filed challenges in 2025.
Jensen, who had never lived in Rhode Island or a disproportionately impacted area and had never been arrested for or convicted of an offense that was eligible for expungement in Rhode Island — but intended to apply for a recreational cannabis license through a company — argued that the statute unconstitutionally excluded her from obtaining either a general or social equity license in violation of the Dormant Commerce Clause and Equal Protection Clause.
Kenney, who applied for a recreational license but had never lived in Rhode Island and did not have any interest in a Rhode Island business entity, argued that the statute’s residency requirements targeted him as a non-resident and limited his economic opportunities in Rhode Island in violation of the Dormant Commerce Clause.
Finally, Palmore, who had never lived in Rhode Island, pointed out that he lived in a disproportionately impacted area in Los Angeles and had been convicted of a cannabis crime in California, but his application for a social equity license was denied because his California conviction could not be expunged under Rhode Island law.
That amounted to a violation of the Dormant Commerce and Equal Protection clauses, he argued.
The District Court held a joint hearing on the plaintiffs’ respective motions for a preliminary injunction.
Plausible claims
Granting the injunction, DuBose found that the plaintiffs had shown a likelihood of success on their Dormant Commerce Clause claims.
She pointed to Northeast Patient Group v. United Cannabis Patients and Caregivers of Maine, a 2022 decision in which the 1st U.S. Circuit Court of Appeals applied the Dormant Commerce Clause to invalidate a requirement under Maine’s medical marijuana licensing scheme that officers and directors of dispensaries be Maine residents.
“The Circuit’s focus on the market aligns with the purpose of the Dormant Commerce Clause which is to prevent state economic protectionism,” DuBose wrote, rejecting the state’s argument that due to the federal Controlled Substance Act, which criminalizes marijuana at the federal level, there was no interstate medical marijuana market for a state to interfere with. “Considering that the CCC ‘received multiple [social equity license] applications submitted by out-of-state individuals and entities’ and has ‘certified multiple out-of-state residents … as approved social equity applicants[,]’ the existence of an interstate market in recreational cannabis is clear.”
She similarly rejected the state’s argument that the provisions in question were narrowly tailored to advance state interests.
For example, while the state argued that the provisions were necessary to maintain health and safety by monitoring cultivation, DuBose found a partial residency requirement “has no impact on the State’s ability to continue tracking marijuana cultivation and distribution, especially considering Plaintiffs do not challenge any restriction on cannabis products crossing state lines.”
Similarly, addressing the state’s argument that the residency requirement was necessary to make sure the CCC has meaningful authority and oversight over all retailers, DuBose emphasized that whether an out-of-state person owns a dispensary has no relation to the CCC’s ability to exercise its lawful authority.
Turning to the Equal Protection claim, DuBose said “allowing an individual to be eligible for the social equity licensing program 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.”
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