CENTENNIAL, Colo.—A marijuana lawsuit going to court this week could answer the question of whether Colorado towns can ban pot shops.

A medical marijuana dispensary called CannaMart is suing the city of Centennial for shutting it down earlier this fall. CannaMart says it wrongly lost its business license after the city learned it was selling medical marijuana.

Several towns have banned marijuana dispensaries, but the Centennial case may answer the question of whether cities can shutter pot shops after they open. Lawyers for CannaMart say they have constitutional protection because medical marijuana is legal, but Centennial will argue it is free to close businesses that violate federal law.

Arguments in the lawsuit are scheduled for Friday.