Law360 (August 21, 2024, 1:47 PM EDT) -- Rhode Island's marijuana regulator has asked a federal judge to toss a challenge brought by a Florida resident alleging the state's scheme for awarding retail cannabis licenses is unconstitutional, saying that process hasn't even been established yet.
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In a motion to dismiss, the Rhode Island Cannabis Control Commission said that plaintiff John Kenney's lawsuit was premature since it alleged discrimination against out-of-state entrepreneurs vying for a cannabis retail license, even though regulators have not yet issued rules for how those licenses will be awarded.
"Plaintiff's mere intention to apply for a cannabis retail license, individually or by means of an entity, and under a regulatory licensing scheme that does not yet exist, is insufficient to establish a case or controversy eligible for redress by this Court," the state said in its Monday filing.
Kenney's lawsuit hinged partially on a provision of the law legalizing recreational cannabis in the Ocean State that directed marijuana regulators to consider residency as one of a host of criteria when considering license applications.
But the Rhode Island regulators said Monday that Kenney's mere assertion that he "intends" to apply for a license did not on its own indicate that he would qualify for one of the 24 retail licenses that the state will give out, and that his lawsuit did not establish a claim that the court could redress.
"As Plaintiff has no entitlement or right to one of the 24 future retail licenses, Plaintiff cannot demonstrate that he has, or will at any point in the future, suffer an injury in fact," the state said in its motion.
The state also disputed Kenney's claims that any purported residency requirement would be unconstitutional, saying that the dormant commerce clause of the U.S. Constitution, which normally bars states from enacting policies that impede interstate commerce, does not apply to marijuana due to the drug's federal illegality.
In addition, the state said that the partial residency requirement was narrowly tailored to advance a "legitimate state interest," by ensuring that Rhode Island's cannabis industry is "closely regulated and safe for the community, including requiring that each licensee undergo a national criminal background check, among other measures."
The motion continued, "The partial residency requirement in the Cannabis Act for all retail licensees serves a legitimate state interest and is not merely created to be protective of in-state financial interests."
The state clarified in its filing that the residency requirement applies only to individuals applying for a license and that out-of-state residents can still apply as part of a business entity as long as they are minority participants.
"As such, there is no full residency requirement for business entities seeking licensure in Rhode Island," the state said. "The instant Plaintiff is not banned from applying and possibly obtaining a retail cannabis license."
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