New York’s struggling legal pot industry has been thrown into turmoil yet again after a judge issued a ruling striking down state rules banning cannabis advertising and marketing as a violation of commerce and free speech.
The same Albany judge, Kevin Bryant, last summer struck down other Cannabis Control Board rules as illegal for providing convicted potheads preference in obtaining licenses over disabled vets and other applicants.
The legal woes last year froze the licensing and opening of new cannabis shops for months while the number of unlicensed marijuana shops sprouted across the city and state like weeds.
In a withering 13-page ruling issued Wednesday, Bryant said the Office of Cannabis Management issued regulations outlawing promotions and marketing on third-party platforms without evidence backing them up, all but saying the edicts came out of thin air.
“There is nothing in the record to establish precisely how OCM developed the regulations,” Bryant said.
“This court must find that the conclusion was arbitrary and capricious and that there is no substantial basis in the record to support respondents [OCM’s] action. The regulations are unconstitutional violations of petitioners’ free speech rights.”
The ruling tossed out the Third-Party Marketing Ban that also covered the listing of prices of cannabis products like loose flower, joints and gummies.
Cannabis operators expressed alarm that the ruling appeared to toss out virtually all of OCM’s rules.
But the judge amended the ruling on Thursday to limit its impact to ones banning ads.
Seattle-based third-party cannabis promoter Leafly, a licensed cannabis store in upstate Rensselaer, brought the case.
Stage One dispensary and one of its customers, Rosanna St. John, was also party to the suit.
The plaintiffs claimed the state OCM barred Stage One from contracting with Leafly to promote its cannabis products on Leafly’s site.
“We are pleased to hear that the court agreed with our claims and we couldn’t be more excited to support consumers and licensed retailers in New York with Leafly’s full suite of products and services,” Leafly said in a statement.
“We hope this decision ultimately leads to a healthy, stable adult-use market in the state. It’s impossible to overstate the importance of providing consumers with choices, and educational information when making purchasing decisions. It is critically important that licensed-retailers have equal access to important advertising and marketing tools to help them succeed in a competitive landscape.”
The Post has reached out to OCM and state Attorney General Letitia James’ office, OCM’s lawyer, for comment.
Gov. Kathy Hochul, who oversees OCM, did not comment Thursday when reporters in Albany asked her questions about the ruling.
She recently initiated a review and potential overhaul of OCM’s licensing and management.
Judge Bryant ordered the state to pay for plaintiffs’ legal expenses.
Additional reporting by Vaughn Golden
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