Leafly Sues New York Cannabis Regulators Over Third-Party Marketing Ban

Thu, Sep 21
Key Points
  • Cannabis technology firm Leafly is suing cannabis regulators in New York over the state's ban on third-party marketing in its recent regulations package.
  • The ban on third-party marketing in New York has previously been in place under pilot program rules, but Leafly's lawsuit challenges the prohibition included in the state's final regulations.
  • The ban could limit businesses' ability to market and grow cannabis in New York.
  • Leafly is a platform that allows users to find information, make purchases, and advertise cannabis products.

Cannabis technology firm Leafly is suing cannabis regulators in New York over the state’s third-party marketing ban included in its recent regulations package, Spectrum News reports. Ryan McCall, deputy cannabis practice chair at Tully Rinckey said that while the third-party marketing ban has been in place under New York’s rules, which he described as a pilot program, Leafly’s lawsuit challenges the prohibition included in the state’s final regulations, which were unveiled last week.

“Now what we’re seeing with finalization, what is going to be the roadmap for New York state cannabis moving forward, you’re now having issues where, hey we can’t go to third party marketing firms, we can’t go to any type of third party advertising, third party distributing. It somewhat pigeonholes a lot of businesses that could be involved within New York State commerce to market it and grow cannabis.” — McCall to Spectrum News

Leafly, McCall explained, “is a platformer that effectively allows anybody who’s interested with cannabis, not just in New York state but throughout the country to be able to look at reviews, sometimes be directed to place orders, you’re able to purchase advertising from the individual dispensary, distributor, etc.”

New York’s rules, which were promulgated amid another lawsuit that has halted licensing in the state, are set to take effect October 4 and would open licensing for the general public – up until now, licensing has only been available to social-equity applicants affected by the enforcement of cannabis prohibition.

McCall said the lawsuit by Leafly “could put another roadblock yet again” but that it’s likely it could be settled “relatively quickly.”