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The Michigan cannabis entrepreneurs filing the lawsuit are facing multiple lawsuits filed in three different states over the past year and a half in a wide-ranging attempt to join or subvert the state’s social equity programs. At least one of the lawsuits suffered a setback.
Last week, a federal court in Washington state denied a request for a preliminary injunction filed by Kenneth Gay and one of his companies, Peridot Tree WA. This comes after Gay asked the court to stop him from issuing a business license to maintain social equity. One was given.
“While we recognize that courts across the country are divided on this issue, this court holds that because the Dormant Commerce Clause does not protect the right to participate in interstate markets that Congress has declared illegal, Peridot “I conclude that it is unlikely that this case will succeed on the merits,” the judge said. Tiffany Cartwright said in her ruling that while the possibility of an injunction was closed, the lawsuit technically remained alive.
Cartwright noted that courts are split on the issue, citing a 2022 ruling in Maine that held a similar program with a similar residency requirement was unconstitutional for reasons cited by Gay. It was a nod to the First Circuit Court in .
Gay says the six-month Washington residency requirement for the state’s cannabis social equity program violates the U.S. Constitution’s Dormant Commerce Clause and that he has never lived in Washington due to his marijuana conviction in Michigan. Nevertheless, he tried to argue that he should be entitled to stay in Washington. .
Gay’s request was similar to a court order won in New York in late 2022 that blocked licenses from being issued in several New York areas for months. Mr. Gay asked a federal court to issue an injunction to prevent regulators in Washington from granting a license to operate.
A legal battle in New York led to a settlement last year that gave Gaye a retail license, but no such luck in Washington.
“Peridot’s claims are all based on the premise that traditional dormant commerce clause analysis applies to the cannabis market, even though the market remains illegal under federal law.” Mr. Trite wrote.
“It makes little sense why the Dormant Commerce Clause would protect an interstate market that Congress actively prohibited, given that protecting this market would facilitate illegal interstate activity,” Cartwright said. wrote. “Peridot cannot use the Dormant Commerce Clause to claim a constitutional right to participate in illegal interstate markets.”
The Washington lawsuit is perhaps the first time gays and their allies have hit a wall after filing at least five lawsuits. Gay also has ties to companies that have filed two similar lawsuits against the city of Los Angeles by Varicyte, Inc., the city of Sacramento by Peridot Tree, and two similar lawsuits against the state of New York. are doing.
All cases are based on the same basic argument: that social equity programs with residency requirements are unconstitutional.
Both the Los Angeles and Sacramento cases are on hold pending a decision from the Ninth Circuit Court of Appeals, which heard oral argument in the Sacramento case in November, according to court records. It is not clear when that court will issue its decision.
The first lawsuit in New York by Gay and his company Varisight NY One was settled out of court last May, but a new lawsuit brought by separate groups Varisight Four and Varisight Five is moving forward. It’s inside. It’s unclear whether Gay is involved in the latest New York lawsuit, which notes that the company’s executives who are said to be entitled to social equity are residents of Los Angeles County, not Michigan. is mentioned.
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