A federal District Court judge has ruled that out-of-state residents can plausibly challenge Rhode Island's Cannabis Act on constitutional grounds, issuing a preliminary injunction that halts enforcement of the law's residency requirements while litigation proceeds. The decision, written by Judge Melissa R. DuBose, strikes at the core of how Rhode Island structured its recreational marijuana licensing program - and raises questions that extend well beyond one state's cannabis policy.
What the Law Said - and Why That Became a Problem
The Rhode Island Cannabis Act, passed by the General Assembly on May 25, 2022, authorized the Cannabis Control Commission to issue 24 retail licenses across six geographic zones - four per zone. The statute defined an eligible applicant as either a Rhode Island resident or a business entity principally located in Rhode Island with at least 51 percent equity owned by state residents. Simple enough on its face. The catch: that definition, by construction, excluded everyone else.
Three plaintiffs - Jensen, Kenney, and Palmore - each residents of other states, filed suit in 2025 after running into that wall. Jensen wanted to apply for a license through a company but had no Rhode Island ties. Kenney had actually applied for a license, only to be turned away on residency grounds. Palmore's situation was sharper still: he lives in a disproportionately impacted area in Los Angeles, holds a cannabis conviction in California, and applied for a social equity license - only to be denied because his California conviction couldn't be expunged under Rhode Island law, a prerequisite the statute imposed for that license category.
Together, they argued the law violated the Dormant Commerce Clause, the constitutional doctrine - implied rather than textually explicit - that bars states from enacting legislation designed to favor local economic interests at the expense of out-of-state competitors. They also alleged violations of the Equal Protection Clause of the 14th Amendment.
The Court's Reasoning: Markets, Oversight, and Rational Basis
Rhode Island's defense rested on three pillars: health and safety oversight, the need for the Cannabis Control Commission to exercise meaningful jurisdiction over license holders, and a desire to minimize friction with federal law - specifically, the Controlled Substances Act, which still classifies marijuana as a Schedule I substance. DuBose rejected all three.
On health and safety, she found that a residency requirement has no bearing on the state's ability to track cultivation and distribution, particularly since the plaintiffs weren't challenging any restriction on cannabis products crossing state lines. On oversight, she was blunt: whether an owner lives in Rhode Island has nothing to do with the CCC's authority to regulate a dispensary operating within the state. And on the federal law argument - the contention that no interstate cannabis market legally exists, so the Dormant Commerce Clause can't apply - DuBose pointed to the Commission's own record. The CCC had received applications from out-of-state individuals and had certified out-of-state residents as approved social equity applicants. An interstate market, she concluded, plainly exists in practice, whatever federal scheduling says.
DuBose drew on Northeast Patient Group v. United Cannabis Patients and Caregivers of Maine, a 2022 decision in which the 1st U.S. Circuit Court of Appeals struck down a comparable residency requirement in Maine's medical marijuana program. That precedent mattered here: the Circuit had already established that the Dormant Commerce Clause applies to cannabis markets, even given their legally complicated federal status.
The Equal Protection analysis focused on Palmore's situation specifically - and what it illustrated about the social equity framework's internal logic. The statute's social equity provisions were designed to benefit those harmed by past cannabis enforcement: people with eligible convictions, their families, and residents of economically distressed areas. But the law conditioned eligibility on those convictions being expungeable under Rhode Island law. That condition, DuBose found, would likely fail even rational basis scrutiny - the most deferential standard courts apply to economic regulations. Allowing someone to qualify because they lived in a poor area while disqualifying someone who actually suffered a cannabis conviction, simply because that conviction happened in another state, isn't a distinction that tracks any coherent remedial purpose.
The Broader Implication for State Cannabis Regulation
Rhode Island is not unique here. When states began legalizing recreational cannabis after 2012, many wrote residency preferences into their licensing structures - partly to ensure local community benefit, partly out of genuine administrative concern, and partly, one suspects, out of economic protectionism dressed in civic language. The constitutional pressure on those structures has been building for years.
The 1st Circuit's Maine ruling was an early signal. This ruling, covering a different state and a broader licensing regime, suggests the doctrine is hardening. What's striking is that the injunction covers both the general residency requirement and the social equity provisions - the latter being the part of cannabis legislation that advocates most fiercely defend. That second thread is politically delicate. Social equity licensing was built to address real, documented disparities in how marijuana laws were enforced across racial and income lines. Structuring those programs in ways that inadvertently bar people from other states who suffered identical harms - as Palmore's case illustrates - creates a constitutional vulnerability that legislators apparently didn't anticipate or didn't weight seriously enough.
The preliminary injunction is not a final judgment. Rhode Island can still contest the claims on the merits. But a preliminary injunction requires the court to find a likelihood of success - not a certainty, but more than a long shot. States designing cannabis licensing frameworks would be well-advised to read DuBose's analysis carefully before the final regulations ship.
