A dispute between the owners of a Philadelphia shopping mall and a company looking to open a medical marijuana dispensary should not be remanded to state court, a federal judge has ruled, saying the fight “tee[s] up a fundamental clash between state and federal law.”

U.S. District Judge Gene Pratter of the Eastern District of Pennsylvania on Wednesday ruled that the case, PharmaCann Penn v. BV Development Superstition RR, should stay in the Eastern District of Pennsylvania, even though it had initially been filed in state court. The suit seeks court approval to open a cannabis dispensary in the Franklin Mills mall, despite language in the deed barring any stores from using the property for an “unlawful” purpose.

In seeking to have the case handled in state court, PharmaCann contended that the property owners had improperly removed the case and that federal abstention doctrines applied to ensure the case would be heard in state court. Pratter, however, sided with the owners and said the case clearly implicated federal law.

“The deed to PharmaCann's property prohibits 'unlawful' uses,” Prater said. “That single term opens the door for federal jurisdiction by teeing up a fundamental clash between state and federal law in this case.”

According to Pratter, PharmaCann had obtained a permit through Pennsylvania state agencies to operate a cannabis dispensary, and Philadelphia had also granted the company the necessary permits. However, language in the deed specifically barred companies from engaging in “unlawful” uses or from opening “drug stores.”

PharmaCann filed its suit in the Philadelphia Court of Common Pleas in September, seeking a declaratory judgment finding those portions of the deed inapplicable to its business operations. The property owner, Franklin Mills, removed the case to federal court one month later.

PharmaCann contended the removal was improper because two defendants did not consent to the removal, and further argued that the Younger and Burford abstention doctrines applied to keep the case in state court.

Pratter, however, said the two defendants that did not consent to removal had been fraudulently joined, and that neither abstention applied, as the questions were not only locally significant and the federal claim could not be raised in state court.

According to Pratter, even though several states, including Pennsylvania, have legalized certain uses of medical cannabis, the federal Controlled Substances Act “flatly” prohibits distribution of marijuana. This conflict, she said, necessarily raises federal questions of law.

“The need to pursue certainty on the legal status of marijuana dispensaries looms large,” she said.

Pratter added that, not only would a ruling in this case have wide-ranging effects, having the dispute litigated in a federal forum would sidestep any political concerns that might arise from the hot-button issue of legalizing cannabis.

“If the court were to rule that PharmaCann's dispensary violated federal law, the supremacy clause could cast doubt on the validity of dozens of state marijuana schemes,” Pratter said. “Such a ruling, in other words, would require a court to consider the delicate comity between our federal and state systems. The advantages of hearing this kind of federalism-adjacent dispute in a federal forum, free from the pressures of judicial election politics, are obvious.”

Although Pratter noted that her ruling regarding federal jurisdiction has no bearing on the merits of the dispute, she said in a footnote that arguments about the alleged medical benefits of cannabis and the political support behind loosening marijuana laws should not factor into any decision on the underlying claims.

“A word of caution is in order,” she said. “It is not this court's role to second-guess the political wisdom of federal legislation on marijuana.”

Jeremy Unruh, general counsel for PharmaCann, said Pratter's ruling expanded what the company had been asking the courts to determine, and PharmaCann is considering its options regarding a possible appeal.

“Rather than viewing this as a local property dispute, the court sees it as an opportunity to roll up its sleeves and examine the greater federalism question,” Unruh said. ”We're simply asking a state court to determine whether a deed restriction on a 26-year-old deed is still relevant in this day and age.”

James Smith of Blank Rome, who is representing Franklin Mills, said, “Our client is very pleased with the court's decision and is hopeful that this controversy can proceed promptly through the federal court to resolution.”