An appeals court judge has sided with Cambridge in its pursuit to give certified economic empowerment applicants a head start on opening marijuana businesses in the city.

Revolutionary Clinics, which has been selling medical marijuana in Cambridge since 2018 and wants to co-locate the business and add adult-use sales, sued the city in October over an ordinance that includes a two-year moratorium, allowing only economic empowerment businesses to receive a permit for a recreational marijuana store.

In January, a Middlesex Superior Court judge agreed with the marijuana company’s motion for preliminary injunction and ordered that the city could no longer enforce the moratorium or take any action to prevent Revolutionary Clinics from applying to convert its location into a co-use medical and adult-use marijuana dispensary.

But on Friday, the appeals court vacated that decision.

“As the Superior Court clearly erred in the grounds relied upon in granting relief, I reverse the preliminary injunction,” wrote Associate Justice Joseph M. Ditkoff in a decision Friday.

Cambridge’s Cannabis Business Permitting Ordinance includes the two-year moratorium during which only certified economic empowerment applicants would be able to receive a Cannabis Business Permit for a retail dispensary. The ordinance is the city’s attempt to ensure people of color and those negatively affected by the war on drugs have a fighting chance in the state’s marijuana industry, which already has barriers like access to capital.

Revolutionary Clinics argued that there were a number of grounds on which the city’s ordinance created sharp conflict between the local and state provisions.

"The motion judge, however, relied upon only one, finding that the moratorium 'is in direct conflict with the CCC’s priority applicant scheme, which provides that the CCC ‘shall review applications from Priority Applicants on an alternating basis, beginning with the first-in-time-application received from either an MTC Priority Applicant or Economic Empowerment Priority Applicant,’” Ditkoff wrote.

But, Ditkoff ruled that nothing in the ordinance conflicts with the regulation regarding priority applicants.

“The dispensary has made no showing -- or even suggested -- that the CCC has had an excess of Economic Empowerment Applicants over dispensaries, such that it has been forced to review multiple applicants from Economic Empowerment Applicants for want of applications from dispensaries. Even if it had, the regulation does not purport to regulate local ordinances or regulation; it merely governs the activity of the CCC. The CCC can act in accordance with this regulation whether or not there is ever an application to sell recreational marijuana in the city. Nothing in this regulatory scheme suggests that municipalities have any duty to ensure that equal numbers of Economic Empowerment Applicants and dispensaries apply to the CCC for a license,” Ditkoff wrote.

The judge also wrote the evidence of economic harm was minimal.

“The dispensary’s chief executive officer stated that his ‘best guess is that the Two-Year Moratorium, if permitted to stand, would cost [the dispensary] upwards of $700,000 in profits per month at each of its Cambridge stores.’ He stated that this number ‘is based on our current medical-use sales and the increased sales we expect will occur once we commence adult-use sales,’” the decision reads.

Revolutionary Clinics said in a statement that it values the work of the courts but was disappointed with the decision.

“Our team remains hopeful for future affirmative resolution as today’s decision signals an invitation to seek reinstatement of the preliminary injunction based on other grounds. Most notably, the Single Justice stated ‘Nothing in this order should be construed as constraining the [Superior Court] judge from issuing a preliminary or permanent injunction based on any other argument raised by the dispensary, of the other requirements are met,’” the statement said.

“While Revolutionary Clinics firmly believes that the original decision of the Superior Court judge granting the preliminary injunction was absolutely correct and will ultimately be upheld, it intends, in keeping with the Single Justice’s language, to promptly ask the Superior Court to reinstate its preliminary injunction based on grounds other than the sole ground considered by the Single Justice,” the statement continued.

Meanwhile, in the midst of the COVID-19 pandemic, Gov. Charlie Baker has banned non-essential businesses from operating, forcing the closure of recreational marijuana stores, but allowing medical marijuana dispensaries to stay open.

In a separate lawsuit, a judge ruled that Baker was acting constitutionally in his decision to shutter recreational businesses.

While closed for recreational sales, a number of marijuana companies, including Revolutionary Clinics, have been producing hand sanitizer to donate to local hospitals.

Earlier this week on April 20, the day recognized as a celebration of marijuana, Revolutionary Clinics donated $10,000 to the Cambridge mayor’s disaster relief fund. When the fund was announced, the dispensary pledged two percent of all sales between March 20 and April 20 to the fund.

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