Rhode Island Cannabis Licensing Stalled by Federal Court Injunction Amid Residency Dispute

Rhode Island's Cannabis Control Commission has put its retail licensing process on hold following a federal court injunction, leaving nearly 100 applicants in limbo and intensifying industry frustration. The pause came after U.S. District Court Judge Melissa DuBose issued an April 8 order halting the awarding of 20 new retail licenses, citing likely success of lawsuits challenging the state's residency requirement for cannabis business owners

The lawsuits, brought by out-of-state entrepreneurs, argue that Rhode Island's mandate for majority in-state ownership violates the Dormant Commerce Clause of the U.S. Constitution, which restricts states from favoring their own residents in commerce. Although two of the lawsuits were previously dismissed, they were revived after a federal appeals court directed a full review of their merits. "Now we are stopped from continuing that process," Commissioner Robert Jacquard stated. "But that does not mean we are stopped from figuring out the best path forward to reach our top priority, which is issuing retail licenses."

During a recent commission meeting, legal counsel Mariana Ormonde emphasized that the commission must keep its legal strategy confidential while it appeals the injunction. "Anything used in this public forum can be used against us in the court case," Ormonde cautioned. Despite the legal uncertainty, applicants and cultivators expressed a mix of frustration and appreciation for the commission's transparency, with some urging urgent action. "Time is of the essence," said Sasha Gorski, a Providence-based cultivator and applicant. "Cultivators and prospective applicants are being harmed every day that this continues. We would like to see things move forward as quickly as possible."

Suggestions for resolving the legal impasse included reopening applications on a merit-only basis or issuing conditional licenses to plaintiffs, proposals made during the meeting by attorney Allan Fung, who represents several retail applicants. Commissioner Jacquard invited Fung to submit his ideas in writing, noting, "They're very interesting, but take a while to absorb." Meanwhile, the commission's next steps remain uncertain as the appeal proceeds, and applicants await resolution

From the OG Lab newsroom perspective, Rhode Island’s licensing pause highlights the broader legal risks facing state cannabis programs that restrict out-of-state ownership. As more states face Dormant Commerce Clause challenges, the industry could see major shifts in how cannabis business licenses are awarded nationwide. This development is a key signal to regulators and entrepreneurs alike that the intersection of state policy and federal law will continue to shape the future of cannabis commerce