Medical marijuana dispensaries in Cambridge must be allowed to immediately pursue recreational pot licenses, a Massachusetts judge has ordered, saying a city ordinance giving disenfranchised entrepreneurs a two-year head start in the market violates state law.
The Friday ruling by Middlesex Superior Court judge Kathleen M. McCarthy is a setback for advocates who have lobbied municipalities to prioritize cannabis companies owned by minorities and other groups hit hardest by the war on drugs — and a major victory for plaintiff Revolutionary Clinics and other medical dispensaries in Cambridge, which had said the ordinance threatened to put them out of business. It also means recreational sales could begin in the city months earlier than previously expected.
“Revolutionary Clinics is pleased with [the] decision ... which confirmed, as Revolutionary Clinics has maintained from the outset before the Cambridge City Council, that the two-year moratorium enacted by the council is in ‘direct conflict’ with Massachusetts law,” the firm said in a statement.
McCarthy’s ruling temporarily blocks Cambridge from enforcing a two-year exclusivity period during which local recreational permits would only be issued to entrepreneurs in the state Cannabis Control Commission’s “economic empowerment” program — companies that are either led by, employ, or benefit members of communities that had high rates of arrests for drug crimes.
Applications from participants in the empowerment program are prioritized by the state Cannabis Control Commission. But the companies must first receive coveted “host community agreements” and other local permits required by the commission, a process in which cities and towns retain broad latitude to pick and choose which operators move ahead.
The difficulty of receiving local approval, along with the length and complexity of the state licensing process, has prompted an outpouring of frustration in recent weeks from smaller companies who say the system is essentially rigged in favor of large, wealthy operators. The large payments demanded by many municipalities as they negotiate host community agreements with applicants have been the subject of scrutiny by the press and the US Attorney for Massachusetts, Andrew Lelling, who is probing the deals.
The exclusivity policy — hailed by proponents as a first-of-its-kind solution to those woes — was the result of months of acrimonious debate last year before the Cambridge City Council.
Supporters said the measure would ensure local marijuana firms run by disenfranchised entrepreneurs had a window to find property, raise money, and begin operations without competition from the larger investor-backed outfits that have so far dominated the Massachusetts marijuana sector — a modest benefit compared to decades of unfair law enforcement practices, they argued. The commission itself officially recommends such exclusivity periods in its guidance to municipal officials.
But Revolutionary Clinics, which hopes to open two cannabis shops in Cambridge, and other dispensaries lobbied strenuously against the ordinance. They said the measure would delay the debut of recreational sales in Cambridge and perhaps even put their dispensaries out of business, leaving local medical marijuana patients without access to needed medicine. The companies backed an alternate proposal under which they would have donated hundreds of thousands of dollars to a fund for empowerment applicants in exchange for the city dropping the exclusivity period and allowing them to seek recreational licenses right away.
In court, Revolutionary Clinics noted that recreational license applications from dispensaries that held provisional medical permits before July 2017 are also prioritized by the commission. And the firm cited a state law saying municipalities cannot use bylaws or zoning to “prevent” dispensaries from adding recreational sales.
McCarthy agreed, noting in her decision that the commission alternates processing applications from dispensaries and empowerment applicants, and ruling that “the permitting ordinance appears to exceed the limited power [state law] granted to municipalities to regulate [recreational] marijuana businesses.” However, she rejected other claims by Revolutionary Clinics, including that the licensing scheme was illegally based on race.
The order blocking Cambridge from enforcing the policy will remain in effect while Revolutionary Clinics’ lawsuit against the city proceeds.
Cambridge officials said they stand by the ordinance and are deciding whether to appeal the ruling.
“The City is disappointed with the Superior Court’s decision to issue a preliminary injunction,” Cambridge spokesman Lee Gianetti said in a statement. “The City believes that it did not exceed its authority in adopting the temporary moratorium ... [and that] the two-year moratorium is not in conflict with the state Cannabis Control Commission’s regulations.”
Gianetti added that Cambridge’s policy does not “prevent” dispensaries from offering recreational sales, but merely temporarily delays them from doing so.
A spokeswoman for the cannabis commission said the agency was reviewing the ruling, and “remains committed to fostering participation in the legal [marijuana] industry by businesses of all sizes, including individuals who have been harmed by previous cannabis prohibition.”
Real Action for Cannabis Equity, a coalition of economic empowerment applicants that had lobbied for the equity policy, decried the ruling. The group argued medical dispensaries won their initial permits under an earlier, unfair system that required applicants to have access to hundreds of thousands of dollars in startup capital and don’t deserve further advantages. Its members also blasted McCarthy, a former prosecutor, for participating in “the mass incarceration of local African Americans on marijuana charges.”
“This preliminary ruling is a strange and unorthodox overreach by the judge, and it is a shortsighted infringement on the civic duty and right of local municipalities to prioritize equity in local regulations,” Richard Harding, an empowerment applicant who serves as a spokesman for the group, said in a statement.
Other activists are planning boycotts and protests of Revolutionary Clinics.
Blake Mensing, a Massachusetts attorney who guides cannabis companies through the local approval process, said Revolutionary Clinics was wrong to try to cut in front of disenfranchised applicants — but probably correct to argue that municipalities cannot stop them from applying for recreational licenses, short of banning pot sales altogether.
“Morally, I think it’s incontrovertible that what Revolutionary Clinics is doing is unsavory,” Mensing said. “That said, unfortunately, I think they’re 100 percent correct, legally.”