Local Residency Required for Cannabis Act

In the matter of Jensen v. Rhode Island Cannabis Control Commission, C.A. No. 24-cv-191-MRD-AEM (consolidated with 24-cv-252 and 25-cv-622), the United States District Court for the District of Rhode Island issued its decision on April 8, 2026. Specifically, the Court considered whether provisions of the Rhode Island Cannabis Act (Act) violated the Dormant Commerce Clause of the U.S. Constitution.  ( In the matter of Jensen v. Rhode Island Cannabis Control Commission, C.A. No. 24-cv-191-MRD)

Rhode Island established legalization of recreational marijuana in 2022, with the regulatory framework administered by the Cannabis Control Commission (Commission). The Act allowed specific retail licenses for "Social Equity Applicants" and "Workers’ Cooperatives." To qualify as a Social Equity Applicant, individuals had to meet criteria tied strictly to residency or by having a prior cannabis-related conviction under Rhode Island law.

Plaintiffs were out-of-state residents and wished to apply for cannabis retail licenses in Rhode Island. They argued the residency-based requirements in the Act prevented them from competing in the market on equal footing with Rhode Island residents.

As a result, this Court considered whether mandates to be Rhode Island residents or “Social Equity Applicants” under the Act to apply for adult-use cannabis retail licenses unconstitutionally discriminated against out-of-state residents. This Court also considered whether the Plaintiffs were entitled to a preliminary injunction to cease the current licensing lottery and application processing as indicated under the Act.

As part of its evaluation, this Court applied the Dormant Commerce Clause, which prevents states from enacting laws that unduly burden interstate commerce or discriminate against out-of-state economic interests. Under the Clause, this Court determined that the residency requirement was "facially discriminatory" because it explicitly favored residents over non-residents to participate in the Rhode Island Cannabis market. Rhode Island had failed to demonstrate that the residency requirements served a legitimate purpose or that a similar requirement could be achieved through non-discriminatory means. With that, the licensing lottery would prevent the Plaintiffs and other out-of-state residents from competing for a limited number of licenses and thus were unconstitutional.

Plaintiffs’ preliminary injunction granted; Defendants enjoined from enforcing the residency requirements.

This is a free article from the March/April 2026 edition of Professional Licensing Report (PLR). Subscribe to Professional Licensing Report (PLR) to access the full edition today.