In September 2023, Leafly Holdings, Inc. and Stage One Cannabis, LLC filed an Article 78 petition in New York Supreme Court - Albany County, challenging regulations that ban third-party advertising and marketing services in NY's adult-use cannabis industry. The plaintiffs have claimed that OCM illegally and unfairly targeted “third-party platforms” such as Leafly with regulations that are unconstitutional because they impermissibly restrict their right to free speech. The regulations at issue prohibit anyone from advertising, promoting or marketing their products on any other third-party platforms, including Leafly.

Although this petition took aim at specific marketing regulations, the judge today just declared virtually all of OCM’s adult-use regulations (Parts 118-121, 123-125, and 131) unlawful and void as arbitrary and capricious. 

While it’s difficult to predict what happens next with certainty, the Notice of Entry was filed on April 4th, so OCM has thirty (30) days to file a notice of appeal, for which the deadline is May 3, 2024. If and when OCM files a notice of appeal, an automatic stay will become effective pursuant to CPLR 5519(a)(1), meaning Judge Bryant’s order will be stayed from enforcement until the appeal has been decided. The most probable outcome, particularly in light of the fact that the plaintiffs in this petition never sought the relief of invalidating all of OCM’s adult-use regulations, is that the order is ultimately amended and narrowly tailored to strike down only the regulations at issue in this case: OCM’s marketing and advertising regulations. Foley Hoag’s Cannabis Industry practice group will provide updates as more information becomes available.