NEW YORK — New York's cannabis industry was unsettled Thursday by a judge's ruling that appeared to strike down all regulations governing recreational marijuana in the state. But a key portion of the order turned out to be a mistake.
The Wednesday ruling was amended Thursday to reflect a much narrower decision after cannabis growers, sellers and other supporters voiced concerns about the implications.
The decision came in a lawsuit brought by Leafly, a cannabis sales website, which challenged the state's rules barring marijuana dispensaries from advertising on third-party platforms.
State Supreme Court Justice Kevin Bryant, in a strongly worded decision, sided with Leafly in declaring the state's rules were arbitrary, capricious and therefore unconstitutional.
His ruling initially appeared to void not just the marketing and advertising rules in question but the state's entire regulatory regime for being “unconstitutionally vague.”
The decision was later amended to show that the judge voided the state rules dealing only with so-called third-party platforms such as Leafly that help marijuana companies market and promote their products.
By then, multiple news articles had appeared saying New York's entire system for regulating marijuana had been thrown out, and an uproar had begun. State Sen. Jeremy Cooney, who chairs the Senate’s cannabis subcommittee, was among those who quickly denounced the decision.
“Today’s State Supreme Court decision was another setback in a series of blows New York’s adult-use cannabis market has faced since legalization, three years ago," he wrote in a statement. “While some changes to marketing regulations are needed, the decision by the Court to throw out all agency regulations will ultimately slow progress at a time when we need to more aggressively combat illicit shops to grow a stronger, more equitable legal market."
A message was left with a spokesperson for the state court system seeking more information about the initial, mistaken ruling. The state Office of Cannabis Management said it is reviewing the corrected decision.
New York’s rollout of legalized marijuana has been defined by a slow licensing process, legal challenges, a proliferation of thousands of illicit shops and a lack of substantial regulatory enforcement.
The relatively paltry number of licensed shops has also led to complaints from marijuana farmers that there aren’t enough legal sellers to handle their crops. At the same time, authorities have been working to shut down illegal marijuana shops that have popped up all over the state, particularly in New York City, as unlicensed sellers fill the legal vacuum.
Meanwhile, Leafly, the California company whose suit sparked the uproar, said it looks forward to supporting New York's marijuana consumers and businesses following the ruling.
“It’s impossible to overstate the importance of providing consumers with choices, and educational information when making purchasing decisions,” the company said in a statement. "It is critically important that licensed retailers have equal access to important advertising and marketing tools to help them succeed in a competitive landscape.”