Court Strikes Cambridge’s Permitting Preference Ordinance

In September 2019, the City of Cambridge enacted a local ordinance that effectively created a two-year moratorium on new cannabis retailers unless the retailers were certified Economic Empowerment applicants.  The ordinance prompted a lawsuit filed by Revolution Clinics, which owns an existing medical cannabis dispensary in Cambridge, in October 2019.   Under the ordinance, Revolution Clinics would not have been allowed to obtain a local business permit to sell adult-use cannabis until September 2021.  The Company argued that the Cambridge ordinance violated state marijuana laws.

On Friday, a Superior Court judge enjoined the City from enforcing the two-year exclusivity period for Economic Empowerment Applicants to receive business licenses from the City – at least as applied to existing medical marijuana operators in the City (the scope of the Order is not perfectly clear to us).  Associate Justice Kathleen M. McCarthy’s declared that the ordinance conflicts “with the CCC’s regulations’ method for giving priority review to [Economic Empowerment] applicants and [existing medical cannabis facility] applicants.”  The Court further explained that the CCC’s priority applicant license scheme requires the Commission to review priority applications on an alternating basis – that is, one Economic Empowerment applicant, then one existing medical cannabis facility, then another Economic Empowerment applicant, etc.  The ordinance “circumvents” this licensing process by “allowing only [Economic Empowerment] applicants to obtain the local permitting necessary to submit a license application to the CCC.”

While it remains to be seen whether Cambridge will appeal the decision, at least for now the case is a win for existing medical cannabis facilities worried that the cities and towns in which they are located might enact laws to delay or prevent them from obtaining adult-use licenses from the CCC.  The case signals that local laws designed to frustrate existing medical cannabis facilities’ priority status for adult-use licensing will be scrutinized by the courts, and face the prospect of being invalidated because they are inconsistent with state cannabis laws or with the CCC’s regulations.

The Court’s opinion in Revolutionary Clinics II, Inc. v. City of Cambridge is available here.

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