Leafly Holdings Co., Ltd., et al. v. New York State Cannabis Control Board, et al., struck by Al. … [+]
New York's Albany County Supreme Court has dealt a blow to New York's cannabis regulatory structure. In Leafly Holdings, Inc., et al v. New York State Board of Cannabis Control, et al., the court also held that “For the reasons set forth above, the petition is granted and the following provisions are declared invalid and void as arbitrary and capricious.'' . Third Party Marketing Prohibited, Part 9 NYCRR $$123.10(g)(21) and l24.5(a). Pricing Prohibited, 9 NYCRR $124.1(bxsxii) Third Perf Order Prohibited, 9 NYCRR $123.10(9)(23 ). All Third Party Licensee Listing Obligations, 9 NYCRR $12a.1OX2). and Third Party Seller Listing Obligations, 9 NYCRR $12a.1(cXl)-(2),” and “The foregoing regulations , constitutes an unacceptable restriction on appellant's right to free speech and is unconstitutionally vague.”
Putting New York's cannabis regulations under the microscope
Leafly's petition focused on New York's cannabis marketing regulations that restrict the use of third-party platforms to sell cannabis products. Part of the issue was the rulemaking process and whether the restrictions prohibited lawful commercial speech in violation of Article 1, Section 8 of the New York State Constitution. The court noted deficiencies in the evidence in discussing both issues in its judgment.
“Defendants have not produced actual minutes of CCB meetings or other documents relating to the development of the regulations at issue or the presentation of proposed regulations to the CCB. “They did not provide records or important minutes of CCB meetings that would have enabled them to determine the factual basis and rationale supporting their decision to adopt the regulations,” explained JSC Professor Emeritus Kevin R. Bryant.
The court ruled in Leafly's favor because there was insufficient evidence regarding the rulemaking process.
“Given the absence of evidence of the process by which these regulations were developed and approved, this court finds the conclusions arbitrary and capricious and that there is no sound and substantial basis in the record to support Defendants' actions. must be determined,” the court said. Domination.
The court found similar deficiencies in its rulings on constitutional issues.
“Furthermore, based on the record before this court, for the reasons stated by appellants, this regulation is unacceptable to appellants' rights, especially given the complete lack of justification and/or support in the administrative record.'' “This Court's finding that they constitute restrictions on free speech are unconstitutionally vague,” the court declared.
Approaching charm
What remains to be seen is the impact this ruling and subsequent appeal will have on New York's cannabis market and beyond. Will this lawsuit spark similar causes of action in other jurisdictions? Current licensees and applicants across the United States are encouraged to follow the details to learn more.
