“Knowing the Act was facing legal challenges…CCC continued forward with its plan to implement the Act and its licensing scheme. The resulting fall-out will be, to be blunt, self-inflicted.”
By Christopher Shea, Rhode Island Currant
Nearly 100 applicants vying for 20 new cannabis retail licenses that were supposed to be awarded via lottery as soon as May remain in limbo after a federal judge’s order this week put the plan on pause.
U.S. District Court Judge Melissa DuBose on Wednesday issued a preliminary injunction against the Rhode Island Cannabis Control Commission. The commission is the defendant in three federal lawsuits filed by out-of-state entrepreneurs over the state’s residency requirement for retail licenses.
DuBose’s order blocks regulators from holding a license lottery or even continuing to screen and review any of the retail license applications submitted to the commission by the December 29, 2025, deadline.
“It’s very disheartening right now,” Jason Calderon, a cultivator who applied for a retail license in North Kingstown, said in an interview. “This most certainly could have been avoided. All we’ve done now is give more time to the existing monopolies to be a monopoly.”
Charon Rose, spokesperson for the commission, on Friday said regulators were aware of the ruling and were reviewing implications for the adult-use retail licensing program.
“At this time, the commission is not in a position to provide a definitive timeline,” she said in an email to Rhode Island Current. “Additional guidance will be provided as it becomes available.”
The legal challenges began in May 2024, when California cannabis entrepreneur Justyna Jensen sued the Cannabis Control Commission in U.S. District Court in Providence, arguing Rhode Island’s residency requirement for licenses under the state’s 2022 Cannabis Act violated interstate commerce protections.
Jensen had filed similar lawsuits in other states, including California and New York.
Jensen in her initial lawsuit stated she has planned to be a majority owner of a social equity business, a specialty license reserved for those adversely affected by the war on drugs.
John Kenney, a Florida resident, filed a second federal lawsuit against the Cannabis Control Commission in May 2024 also objecting to the residency requirement. Justin Palmore of California filed a third lawsuit on similar grounds on Nov. 24, 2025.
None of the plaintiffs were among the 97 businesses vying for a license in Rhode Island following the state’s call for applications late last year.
Passed by state lawmakers in 2022, the Rhode Island Cannabis Act called for 24 new retail stores around the state—with six licenses reserved for social equity applicants and another six for worker-owned cooperative stores.
Not every license type received an application in each of the six geographic zones, which left regulators with a maximum of 20 licenses to issue across the state.
Out-of-state investors and ownership are allowed under the law, but the majority of a cannabis company—51 percenr—must be owned by a Rhode Island resident.
DuBose dismissed Jensen and Kenney’s suits in February 2025, finding the complaints were premature since state regulators had not yet finalized the rules governing Rhode Island’s retail licenses. Regulations were enacted in May last year.
But the cases were revived last November by the U.S. 1st Circuit Court of Appeals in Boston, which directed DuBose to issue rulings on their merits at least 45 days before the date that the Cannabis Control Commission intended to issue retail licenses.
The timeline set by the commission in October projected licenses would be awarded in the second quarter of 2026, as early as May.
Did state squander its time?
The state argued in its legal filings that the residency requirement allows regulators to have meaningful authority, jurisdiction and oversight over all retail license holders.
But DuBose ultimately found Rhode Island’s residency requirement was not narrowly tailored to advance valid state interests. She also found the plaintiffs would face irreparable harm because the commission admitted it would not allow additional licenses beyond the 24 allowed under state law.
The state also tried to make the case that the plaintiffs were given consideration at the 11th hour of getting licenses out. DuBose contended the state had plenty of time to make changes to its rules.
“Knowing the Act was facing legal challenges in this Court, the CCC continued forward with its plan to implement the Act and its licensing scheme,” DuBose wrote. “The resulting fall-out will be, to be blunt, self-inflicted.”
It’s that very line that has attorney Allan Fung, the former Republican Cranston mayor and congressional and gubernatorial candidate who represents several retail applicants, wondering why the state didn’t act sooner to avoid the license freeze.
“It’s frustrating that the state didn’t fix the statute and settle these issues earlier on, or find a compromise with these three plaintiffs, before people put their life savings on the line,” Fung said in a text message to Rhode Island Current. “The industry can’t afford to wait even longer.”
It’s certainly been a slow license rollout for prospective cannabis retailers.
Over a year passed after the state legalized recreational cannabis before the three-member commission tasked with regulating the industry was impaneled in June 2023. The commission needed to hire staff to draft proposals and conduct a review of rules adopted in other states. Rules governing Rhode Island’s retail cannabis were finally adopted in May 2025. Chairperson Kim Ahern stepped down last October to run for attorney general, and Gov. Dan McKee (D) has yet to nominate a successor.
In recent months, the two remaining commissioners considered further slowing the process by staggering the lottery for the 20 licenses instead of awarding them all at once. No final decision was ever made during the panel’s most recent meeting on March 13.
“The whole time it’s always been something,” Calderon said. “Now it’s this new hurdle.”
That hurdle comes as many applicants have been paying rent on their storefronts for months while waiting to see if they will be selected for a license lottery.
“My extremely frustrated clients have invested tens to hundreds of thousands of dollars to follow an intricate set of rules at both the state and local levels, only to have the rug pulled out from underneath them at the eleventh hour,” Fung said.
Calderon is a bit better off financially since he said the deal in place for his proposed shop in North Kingstown doesn’t require rent payments until June.
“Obviously that’s going to come and go without any store,” he said. “Most likely I’m going to lose the location because I’m not going to be able to cover and hold it while the state figures out what their next plan is going to be.”
Regulations require that each application have a premises secured, including zoning approvals from the city or town where the store is to be located. They’re rules that were lauded by Andre Dev, founder of the Community Cannabis Network of Rhode Island, which acts as an incubator for many of the prospective worker cooperatives.
“Many other states only require a fee and you don’t have to have your business ready,” he said in an interview. “Most of those applicants have not been able to open doors because there was no testing for readiness.”
Dev commended applicants for being able to get those approvals on time after a three-month application window, which is why he was dismayed by the court siding with plaintiffs who never even applied in Rhode Island.
“Somehow their rights are more important than us who put in the time and effort to get all this done,” Dev said. “It is incumbent on the commission to fix this in a way that creates the least harm for people.”
DuBose suggested in her ruling the state could refund any applicants who decide the wait is no longer worth it or even transfer current applications to a hypothetical new process.
Both the chambers of the Rhode Island General Assembly have pending bills to remove the residency requirement. Legislation sponsored by Rep. Scott Slater, a Providence Democrat, was heard by the House Committee on Corporations on March 12 where it was held for further study—a standard practice upon a bill’s first review.
“It’s clear that we’re going to have to pass something to remedy this,” Slater said in an interview. “We need to make sure this doesn’t get held up again. We definitely need more stores open.”
Dev called on the commission to publish emergency regulations within 30 days removing the enjoined language and establishing interim application procedures consistent with the court’s ruling, noting the state’s cannabis act declares all provisions severable.
“They have the power to deal with this,” he said.
The Cannabis Control Commission is scheduled to meet at 2 p.m. Friday, April 17.
This story was first published by Rhode Island Currant.
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