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The Wednesday ruling by Salem Superior Court Judge Timothy Feeley marked a small victory for Salem officials who advocated for local control over pot businesses. The city said it had the right to decide which of nine cannabis store hopefuls would advance to fill the city’s five spots.

But the rejected store, Mederi, had argued that the city was unfair and usurped the authority of the Massachusetts Cannabis Control Commission, which grants licenses.

“There has to be a process to distinguish among an excessive number of otherwise qualified applicants for a limited number of [retail marijuana establishment] licenses,” Feeley wrote. And, he said, “It is not required or in the interests of public policy that the selection among otherwise qualified applicants be made on a rolling basis by the CCC.”

The judge also requested more information in determining whether the city acted “arbitrarily and capriciously.” He gave the city 30 days to submit documents detailing how it arrived at its decision to reject Mederi.

Rejected marijuana store sues Salem to stop it from allowing competing shop to advance
The lawsuit, which observers say is the first of its kind in Massachusetts, could test the limits of local governments’ freedom to choose winners and losers in the pot business.

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The city had argued that Mederi was one of six stores proposed on Highland Avenue, so the city had good reason to limit the number of shops in one corridor to alleviate traffic. The city’s review committee — which included the police chief, Mayor Kim Driscoll, and a city councilor — also noted concerns about Mederi’s lack of capital and lack of direct experience in the industry, the ruling said.

The committee concluded that three other applicants — not including Mederi — “appeared to be the strongest positioned to open, succeed, and provide minimal or manageable impact to the surrounding neighborhood,” the judge wrote. Two of those were located on Highland Avenue. Meanwhile, the committee felt that Mederi and two others “were not as strong,” the ruling said.

Like Salem, many cities and towns must narrow down a crowded field vying for few cannabis retail slots. Guidance for such places published by the commission doesn’t specifically address how to narrow the field of applicants. But it does suggest that municipalities use host agreements to allow some of their medical dispensaries to move forward with recreational sales.

Salem officials lauded the ruling. Choosing winners among proposed pot shops “is a local decision that should reflect the municipality’s desire to advance the strongest applicants in the least impactful locations,” said Dominick Pangallo, Driscoll’s chief of staff. “Salem followed a professional, fair, and objective process and we are glad that the court recognized that.”