Rhode Island Moves to Restart Cannabis Retail Licensing

PROVIDENCE – Rhode Island officials are taking steps to revive a stalled process for issuing new retail Cannabis licenses. A federal judge blocked the effort earlier this year over concerns about state residency rules. Lawmakers responded by changing the law, and regulators now seek to clear the way forward.

State attorneys asked U.S. District Judge Melissa DuBose on June 26 to dissolve the preliminary injunction she issued in April. That order had stopped the Rhode Island Cannabis Control Commission from reviewing applications or holding a lottery for new stores. The commission received nearly 100 applications by the late 2025 deadline for up to 20 new retail licenses across designated zones in the state.

The core issue in the three federal lawsuits centered on a provision in the 2022 Rhode Island Cannabis Act. It required that a majority of ownership in retail businesses come from state residents. Out-of-state entrepreneurs argued this violated constitutional protections on interstate commerce. Judge DuBose agreed there was a strong likelihood the challengers would succeed and paused the process to prevent harm.

In response, Gov. Dan McKee signed legislation on June 10 that eliminates the residency requirement entirely. The new measure also restarts the application process from scratch and adjusts criteria for social equity licenses, which target individuals disproportionately affected by past Cannabis prohibition enforcement. The law directs the commission to open a fresh application window within 60 days of its passage.

State lawyers contend the legislative fix makes the original injunction no longer relevant. “The goals of this court’s preliminary injunction have now been made permanent by the General Assembly’s legislative action,” they wrote in their motion. Applicants who paid fees during the first round could receive refunds under the updated rules.

This situation highlights broader challenges in state-level Cannabis regulation. Rhode Island legalized adult-use sales in 2022, but rollout has moved slowly. Existing dispensaries have operated with limited competition, while cultivators and prospective retailers have waited years for expansion. Many applicants invested significant resources in securing properties and meeting local zoning rules, only to face delays from the legal dispute.

The commission faces practical decisions ahead. Officials have discussed staggering license awards to ease market pressure, given that current operators often markup products substantially and some vertical integration limits wholesale opportunities for independent growers. A quicker restart could bring relief to the supply side of the industry, where cultivators report operating near capacity with few new outlets.

Critics of the earlier approach point to the time lost since the initial lawsuits surfaced in 2024. Supporters of the residency rule had aimed to keep local control and prioritize in-state economic benefits, including social equity goals. Removing it opens the field to a wider pool of investors while preserving other priorities in the law. As of early July, the plaintiffs had until July 10 to respond to the state’s motion, with no immediate hearing scheduled. The commission continues planning next steps, expressing hope that the process can resume soon.