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Court Overturns New York’s Cannabis Advertising Ban

Last week, an Albany judge overturned New York’s rules on marijuana advertising and marketing. In his ruling, Judge Kevin Bryant stated that the rules were a violation of free speech and commerce. This ruling throws the state’s already struggling legal marijuana industry into confusion.

In 2023, the state was prevented from issuing licenses to new marijuana shops for months, which left many shops unopened and allowed unlicensed retailers to operate across the city. In his 13-page ruling, Judge Bryant explained that the Office of Cannabis Management (OCM) published regulations outlawing marketing and promotions on third-party platforms with no evidence to support its edicts.

The judge added that there was nothing in the record to determine precisely how the OCM came up with its regulations. The judge’s ruling also cast aside the ban that covered price listings for marijuana products such as joints, loose flower and gummies. In addition to this, the judge ordered the state of New York to pay for the plaintiffs’ legal expenses.

Marijuana operators have raised concerns that the recent ruling has done away with most of the OCM’s regulations.

The case was brought forward by Leafly, a third-party marijuana promoter based in Seattle that runs a licensed marijuana store in upstate Rensselaer. Stage One dispensary and Rosanna St. John, one of its consumers, were also party to the lawsuit. In their filing, the plaintiffs claimed that the OCM prevented Stage One from working with Leafly to promote its marijuana products on the latter’s site.

In a statement, Leafly revealed that the company was pleased to hear that the court agreed with its claims. The promoter added that it was excited to support licensed retailers and consumers in New York with the firm’s full suite of services and products and noted that it hoped this decision would ultimately lead to a stable, healthy adult-use market in the state of New York.

In its statement, the marijuana promoter also highlighted the importance of offering consumers different choices as well as educational information when making purchasing decisions. It added that it was important that licensed retailers have equal access to crucial marketing and advertising tools that would allow them to succeed in this competitive landscape.

Governor Kathy Hochuk has yet to release a statement regarding the recent ruling. The governor, who oversees the OCM, has, however, initiated a review and possible overhaul of the office’s licensing and management.

Cannabis industry actors such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) are likely to welcome the court decision to reverse the ban on advertising marijuana products since such restrictions make it harder for state-legal cannabis businesses in the country to grow and sustain their operations.

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