Massachusetts Dispensary Wins Right to Operate For-Profit Despite Local Laws

The Massachusetts Supreme Judicial Court on Monday ruled in favor of a cannabis business that it can operate as a for-profit business, Courthouse News reports. In the ruling, the justices determined that the state’s cannabis legalization law preempted the town of Mansfield’s bylaws which required cannabis dispensaries to operate as not-for-profits.

The dispensary owner, Ellen Rosenfield, started the medical cannabis dispensary prior to the state’s passage of the broad legalization law and in 2017 the state began allowing dispensaries to operate as for-profit ventures. The following year, Rosenfield converted her business to for-profit status, but neighboring businesses filed a lawsuit arguing that while state law had changed, the town’s bylaws had not.

“The Legislature evinced its clear intent to allow for-profit entities to distribute medical marijuana. This legislative purpose cannot be achieved in the face of [Mansfield’s] by-law on the same subject.” — Massachusetts Judicial Supreme Court Ruling via Courthouse News

The court also rejected the town’s argument that under the state law medical cannabis dispensaries could only convert to for-profit status if their facilities were actively “engaged” in cannabis sales and that since Rosenfield’s business was in start-up mode at the time the state law was passed, she wasn’t “engaged” in sales.

The court ruled “engaged” means simply involved or occupied with and that “it hardly can be said that the plaintiffs were not ‘involved in’ and ‘occupied’ by the sale of marijuana, even though the dispensary is not yet operational.”

Rosenfield’s attorney, Jason Talerman of Mead, Talerman & Costa in Millis, told Courthouse News that, in the ruling, “the court is saying, ‘Let’s not throw up artificial barriers; let’s figure out how to manage it instead of just saying no.’”

All seven of the court’s justices were appointed by Republican Gov. Charlie Baker who opposed the ballot initiative to legalize cannabis in dispensaries.