Recreational marijuana companies sue Massachusetts Governor Charlie Baker over shutdown

Lawsuit comes despite new CCC order allowing some businesses to sell inventory to medical dispensaries

A sign on the front doors of Boston marijuana store Pure Oasis last month informed customers that the shop is shut down because of the COVID-19 pandemic.Blake Nissen/For The Boston Globe

A group of marijuana businesses and consumers sued Governor Charlie Baker on Wednesday, saying his decision to shut down recreational cannabis operations amid the coronavirus pandemic was an illegal overreach that will cost thousands of jobs — and endanger public health by forcing consumers into the illicit market.

The suit was filed in Suffolk Superior Court on behalf of five licensed marijuana operators and Stephen Mandile, an Army veteran and Uxbridge selectman. Mandile said he relies on cannabis to treat serious injuries he sustained in the Iraq War but fears losing his federal benefits if his name appears in a database of medical marijuana patients, since the drug remains illegal under US law.

“We know there are thousands of other patients in the Commonwealth that rely on the [recreational] market for their medicine,” said Adam Fine, an attorney with Vicente Sederberg, one of two law firms involved in the suit. “You couple that with a nascent industry that doesn’t have access to federal relief, and which has also proven itself to be highly compliant with regulations, and you see it’s irrational to keep these businesses shut down."

In March, Baker deemed medical marijuana operations “essential” and has allowed them to continue serving certified patients.

But despite heavy pressure from a coalition of 30 state legislators and marijuana industry groups, he has said reopening recreational retailers is a “nonstarter,” because they draw too many out-of-state visitors at a time when public health officials are urging less travel.

“Making [recreational shops] available to anybody from the Northeast would cut completely against the entire strategy we’re trying to pursue here in Massachusetts to keep people safe,” the governor reiterated at a press conference Wednesday. When a reporter asked whether sales could be restricted to Massachusetts residents, Baker responded sternly that he was focused on handling an expected surge in COVID-19 hospitalizations, “which is going to involve trying to save the lives of tens of thousands of people."

The lawsuit asserts that sales could easily (and legally) be restricted to Massachusetts residents, and conducted safely through the use of curbside pickup, appointment-only shopping, and other measures. It argues Baker violated the rights of legal cannabis firms by closing them while allowing restaurants and liquor stores to continue operations with safety measures in place.

The suit also notes that nearly all other states where marijuana is legal have deemed recreational businesses “essential.”

Requiring recreational consumers who rely on marijuana as a medicine to register as patients poses an undue hardship to veterans and other groups, the complaint said. And, it added, many will instead seek cannabis on the illicit market, where products are untested and regulators cannot enforce new sanitization and social distancing rules.

“Another concern for the industry is that this [ban on recreational sales] will cause consumers and would-be patients to turn toward the illicit market, which is certainly not taking any of the precautions dispensaries are," said former Boston city councilor Mike Ross, now an attorney at Prince Lobel Tye, the second law firm involved in the suit.

Before the coronavirus crisis, Massachusetts marijuana businesses employed well over 8,000 workers directly, and supported many more jobs through vendors ranging from lobbyists to plumbers.

But a diverse group of entrepreneurs trying to enter the industry after a protracted and expensive licensing process say they’re now in imminent danger of failing, in part because cannabis firms are not eligible for the emergency federal loans available to other businesses. And in the two weeks since recreational firms were ordered to cease operations, companies have laid off or furloughed hundreds if not thousands of workers.

“After a very quiet winter off-season, to be completely shut down is really tough for us,” said Nicole Campbell, the owner of the Green Lady marijuana store on Nantucket, where there are no medical dispensaries.

Campbell decided to join the lawsuit after Baker’s order left the island without any legal access to cannabis and forced her to lay off 15 employees.

“There are a lot of people with serious conditions on Nantucket who need marijuana but can’t leave the island,” she said, noting that the town of Nantucket had sought to keep Green Lady open when imposing its own order closing nonessential businesses.

The lawsuit came even after the Cannabis Control Commission announced late Tuesday that it is permitting recreational marijuana suppliers to sell their products to medical cannabis dispensaries.

Commission regulators said the new directive will help dispensaries meet increased demand as record numbers of displaced recreational consumers sign up for medical marijuana cards, while providing modest financial relief to small recreational suppliers shut by Baker’s order.

The commission on Tuesday also announced marijuana companies will now be required to file a report with the agency when any employees test positive for COVID-19. Last week, two employees of New England Treatment Access came down with the virus, prompting an outpouring of complaints from other workers that the company was doing too little to protect them.

The commission has said it is looking into those complaints, and this week urged workers to report unsafe conditions to its investigators.