New York court strikes down marijuana marketing rules

A New York court has struck down the state’s marketing regulations for its troubled adult-use marijuana market.

The Albany County Supreme Court ruled in favor of cannabis information website Leafly, finding the agency’s rulemaking process problematic and its regulations unconstitutionally vague and in violation of free speech rights, according to the order issued on Thursday.

The state did not present any evidence “to rebut the arguments” presented by Leafly and “nothing to establish the rationale or reasoning behind the [Office of Cannabis Management] and [Cannabis Control Board] decisions,” the order read.

The court initially tossed out a huge chunk of New York’s marijuana regulations on Wednesday, sending tremors through the state’s fledgling cannabis industry, which has already endured months of struggles due to the botched rollout of the state’s adult-use market.

But about a day after the initial order, the court narrowed the ruling to apply only to the marketing and advertising restrictions that Leafly challenged. This means that dispensaries will be able to advertise and fulfill orders on third-party platforms, while keeping the rest of New York’s adult-use cannabis rules intact. However, the ruling could set the stage for additional legal challenges for other parts of New York’s adult-use cannabis law.

More details: Leafly filed a lawsuit against New York cannabis regulators last September, challenging rules that would prevent dispensaries from marketing themselves or fulfilling orders on a third-party platform.

Other petitioners joined Leafly in filing the lawsuit, including Stage One, a cannabis dispensary in Rensselaer, New York, and Rosanna St. John, who said she relies on Leafly to make informed decisions as a cannabis consumer.

The state failed to submit any evidence to support cannabis regulators’ reasoning behind adopting the marketing rules, according to Judge Kevin Bryant.

“There is nothing in the record to establish precisely how OCM developed the regulations, which staff members participated in the process or how they addressed the litany of issues that were raised not only by Petitioners but by other individuals who submitted comments,” the order read.

"We are reviewing the decision and exploring all possible legal options," the OCM said in a statement.

This ruling is yet another blow to New York’s cannabis regulators, who have been contending with numerous lawsuits over the rollout of the state’s adult-use marijuana market.

This story has been updated to reflect the judge's amended ruling narrowing the breadth of the decision.