Written by Steve Gersi
Judge Kevin Bryant said the rule violated free speech, but his decision could be appealed.
A New York state judge this week handed a legal victory to cannabis information company Leafly, striking down a ban on sales by cannabis companies in the state's Marijuana Regulation and Taxation Act, which regulates the state's cannabis industry.
New York State Supreme Court Justice Kevin Bryant issued an amended judgment late Thursday upholding a lawsuit brought by LFLY, which was barred from advertising a Buffalo-based cannabis dispensary on its website.
Leafly stock price fell 2% after rising early.
Bryant's initial decision Wednesday struck down most of the state's law, but he later narrowed the move to focus on the state's marketing ban.
“This court is constrained to find this restriction an unconstitutional violation of appellant's right to free speech under the New York State Constitution,” Bryant wrote in his original decision. .
Leafly filed the lawsuit to open up access to a website that helps consumers buy and compare cannabis products and find dispensaries.
The Office of Cannabis Control is reviewing this decision and considering all legal options, OCM said in a statement.
A Leafly spokesperson said the company was “pleased to hear the court agreed with our arguments and couldn't be more pleased to support consumers and licensed retailers.”
The company said it is “critically important” that licensed retailers have equal access to advertising and marketing tools to compete in the New York market, which currently has thousands of unlicensed pot sellers. Ta.
Robert DiPisa, chairman of Cole Schott's Cannabis Law Group, said New York dispensaries will likely take a “wait and see” approach before starting advertising.
He said it will likely take months for the Bureau of Cannabis Control to issue new rules regarding advertising, which could lead to more lawsuits over aspects of the state's cannabis regulations.
“Overall, this is a very good thing for the New York market,” DiPisa said of the court's ruling. “This listing will direct more consumers to authorized stores.”
Damien Cornwell, president of the New York Cannabis Association, said the Bureau of Cannabis Control could appeal Bryant's decision or submit “substantially similar” regulations.
“I'm confident that this too will pass and that the court will make a decision that is in the best interest of all parties,” Cornwell said.
The Leafly case marks the latest legal battle over New York state's 2021 cannabis law.
Among them, a lawsuit last year delayed the state's cannabis license rollout for several months until a settlement was reached in November.
Gov. Kathy Hochul recently ordered an overhaul of the Office of Cannabis Control.
Dispensary owners complain that advertising bans and other regulations have made it more difficult to compete with illegal cannabis stores.
Also read: Cannabis venture capital firm Poseidon makes first investment in New York market
-Steve Gersi
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04/05/24 1426ET
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