Rhode Island federal judge tosses serial litigators’ cannabis licensing challenge

A federal judge threw out two legal challenges to Rhode Island’s cannabis licensing system, ruling Thursday that the lawsuits – one from a notorious husband-and-wife team – can’t proceed until the state finalizes its retail marijuana regulations.

U.S. District Judge Melissa R. DuBose ruled that the separately filed cases brought by Justyna Jensen – who has lobbed similar lawsuits in several other states alongside her attorney husband, Jeffery Jensen – and Florida-based John Kenney weren’t “ripe for judicial review” since the Cannabis Control Commission has yet to establish rules for retail licenses, according to the Providence Journal.

“This court cannot and will not speculate as to when the proposed rules and regulations will be promulgated or when the application period for retail cannabis licenses will open,” DuBose wrote in her order.

The plaintiffs alleged the residency requirements in Rhode Island’s 2022 Cannabis Act discriminate against out-of-state applicants and violate the U.S. Constitution’s dormant Commerce Clause, which protects interstate trade.

State attorneys argued that while license applicants must be residents, out-of-state parties can own up to 49% of a Rhode Island retail cannabis business.

“The Cannabis Act’s residency requirement is considered to be a partial residency requirement, not a total residency requirement,” they wrote in court filings.

The state’s cannabis law reserves certain retail marijuana licenses for applicants meeting specific criteria, including Rhode Island residency and living in areas “disproportionately impacted” by past drug enforcement.

Federal courts are increasingly rejecting arguments that state residency requirements for cannabis licenses violate constitutional commerce protections. On Tuesday, U.S. District Judge Sherilyn Peace Garnett dismissed a similar case against Los Angeles, ruling that the U.S. Constitution’s dormant commerce clause doesn’t apply to the federally illegal cannabis market, according to filings first obtained by Law360.

“There is no permissible interstate market to protect from state interference,” Garnett wrote in her Feb. 4 order.

However, a company to which Jeffrey Jensen is connected, Variscite NY One, also filed a new claim earlier this month against New York regulators, seeking $375,000 in damages. The lawsuit alleges delays in the state’s proximity protection system for cannabis retailers caused them to sell their license for less than originally negotiated.

Rhode Island’s Cannabis Control Commission recently completed a 30-day public comment period on draft regulations for expanding the retail market. The rules will determine how licenses for 24 new retail operations will be awarded.

Kenney argued in his lawsuit that “the state of Rhode Island cannot show a legitimate local purpose for the residency requirement,” claiming it aims to discriminate against non-residents and reserve economic opportunities for Rhode Islanders.