Court Upholds Mass. Governor's Adult-use Cannabis Shutdown, But Finds His Justification Not Legally Sound

Apr 16, 2020

This post has been updated and the original content is available below

A court ruling was issued today regarding the lawsuit filed against Massachusetts Gov. Charlie Baker over his decision to shut down adult-use cannabis sales. 

VS partner Adam Fine, who served as co-counsel for the plaintiffs, released the following statement:

"It is unfortunate that the court felt constrained to uphold the governor’s decision to close adult-use cannabis stores. As the ruling acknowledged, it has made life more challenging for medical cannabis patients who have relied on the adult-use market.

"The court rejected Gov. Baker's stated rationale for closing these establishments by declaring he could 'lawfully' limit adult-use cannabis sales to Massachusetts residents. As the plaintiffs in this case review their legal options, we hope the governor will follow his legal option to re-open adult-use cannabis stores with a temporary ban on sales to non-residents."

As Fine noted, the court felt legally constrained to uphold the governor’s decision, but noted the plaintiffs made a compelling case for taking an alternative approach that allows adult-use stores to remain open: 

Plaintiffs make a convincing showing that there may be other ways to address these concerns that would allow adult-use marijuana establishments to restart their businesses without harming public health or safety—for example by temporarily limiting non-medical marijuana sales to Massachusetts residents who have ordered in advance and arrive during an assigned time-slot, authorizing adult-use retail stores to make curbside deliveries of their products just like medical marijuana treatment centers, and requiring other measures to ensure that customers and workers keep a safe physical distance apart.

Nonetheless, the Governor was not legally required to implement a different alternative or ensure that his emergency closure orders impose the smallest possible economic burden on adult-use marijuana establishments.

The court rejected the governor’s stated rationale for closing adult-use establishments (i.e. deterring visitors from other states): 

[T]o help abate the coronavirus emergency the Governor could lawfully restrict sales of non-medical marijuana to Massachusetts residents, without violating the so-called dormant Commerce Clause of the United States Constitution.

The court also recognized that the adult-use cannabis market is a source of cannabis for veterans and other residents who use cannabis for medical purposes:

Many veterans report financial difficulties in obtaining medical cannabis cards. Many others are scared to be placed on a state medical cannabis registry because they fear this will cause them to lose their federal Veterans Administration benefits. As a result, many veterans in Massachusetts rely upon the adult-use market to obtain marijuana for therapeutic purposes. After retail adult-use outlets were forced to close, the Cannabis Control Commission has been receiving a surge in new medical marijuana patient registrations. This strongly suggests that many people who benefit medically from using marijuana previously obtained their supply from adult-use outlets rather than from MTCs.


Original post published April 8, 2020

A lawsuit has been filed against Massachusetts Gov. Charlie Baker, seeking to overturn his decision to shut down adult-use cannabis sales. VS has been engaged in ongoing efforts to bring about a responsible solution to the situation, and partners based in the firm's Boston office, Adam Fine and Brandon Kurtzman, are serving as co-counsel for the plaintiffs in the suit. 

Boston Business Journal reports:

Five cannabis dispensaries and a medical marijuana patient seeking to open a recreational dispensary have sued Gov. Charlie Baker over his decision to ban all recreational sales during the coronavirus pandemic.

The lawsuit, filed in Suffolk Superior Court on April 7, asks for a preliminary injunction against the governor's order, saying the fate of the state’s 43 recreational marijuana establishments, which employ 8,000 people, is at stake. Medical marijuana operations are allowed to stay open.

“If it continues, this mandatory closure will cause profound and irreparable damage to the nascent adult-use marijuana industry; will deprive Massachusetts residents of safe access to regulated marijuana; and, will make it very difficult or impossible (e.g.,in Nantucket) for certain medical-marijuana users to obtain marijuana legally,” the lawsuit states. 

Law360 highlighted some of the key arguments made in the complaint:

“By classifying adult-use marijuana establishments as non-essential, while classifying similar regulated businesses — such as liquor stores and medical marijuana dispensaries — as essential, the executive orders violate the constitutional rights of the plaintiffs and exceed the governor’s executive authority,” the complaint argues.

...

“The executive orders violate the equal protection clause because, for purposes of combating the outbreak of COVID-19, there is no legitimate or rational basis to distinguish between adult-use and medical marijuana establishments; between adult-use marijuana establishments and liquor stores; between those who frequent such stores; or, between medical marijuana users who frequent adult-use marijuana establishments, and medical marijuana users who only frequent medical marijuana dispensaries,” the complaint argues.

The full complaint is available here, and a shorter memorandum in support of the plaintiffs' arguments is available here

For more information about the adult-use sales ban in Massachusetts, read our update from earlier this month. We are also closely tracking regulatory developments in Massachusetts as part of our VS Insights series, "Coronavirus and Cannabis: Monitoring the Impact."

This article is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. This material may be considered attorney advertising under certain rules of professional conduct.