April 4 (Reuters) - A New York state judge has
invalidated most of the state's cannabis regulations in a case
that challenged marijuana advertising rules.
New York Supreme Court Justice Kevin Bryant said in an order
on Wednesday that the state had not justified its rulemaking
process in a raft of regulations put forward by the New York
Office of Cannabis Management governing licensing, business
operations and marketing of cannabis.
The judge in Albany criticized the Office of Cannabis
Management and the New York Cannabis Control Board's response to
the lawsuit filed by cannabis website Leafly Holdings ( LFLY ),
saying they presented no evidence or justification to explain
how the regulations were developed.
Leafly ( LFLY ) had sued over a rule that barred dispensaries from
advertising on third-party platforms.
"There is no indication that any evidence was actually
placed before the administrative agency and there is no outline
of the process that the agency followed when deliberating
regarding the proposed regulations," the judge wrote.
A spokesperson for the New York Attorney General's office,
which defended the regulations in court, directed questions
about the ruling to the state Office of Cannabis Management. The
Office of Cannabis Management did not immediately respond to a
request for comment.
Leafly ( LFLY ) in a statement said it is important that licensed
operators have access to advertising tools to help them succeed
and that the company hopes the ruling "ultimately leads to a
healthy, stable adult-use market in the state."
Jonathan Havens, a cannabis attorney in New York at law firm
Saul Ewing who is not involved in the lawsuit, said if the
ruling stands as is, it will have a significant and broad impact
on the New York cannabis industry.
"It didn't strike down the entire program, but I find it
challenging to understand how there can be a fully functioning
program if this isn't immediately addressed," Havens said.