More New York Cannabis Program Litigation: First Amendment Challenge to Third-Party Website Rules

On September 18, 2023, a brand new lawsuit was filed by, inter alia, Leafly Holdings, Inc. (“Leafly”) towards the New York State Workplace of Hashish Administration (“OCM”) and New York State Hashish Management Board (the “Hashish Management Board”).

The lawsuit

This authorized continuing entails a First Modification and different challenges to sure laws adopted by the Hashish Management Board. The laws, referred to as Resolution 2023-32, introduce new guidelines below Components 123 and 124 of the Revised Grownup-Use Hashish Rules, which considerably prohibit the flexibility of New York dispensaries and customers to make use of third-party web sites that combination details about hashish merchandise. The petitioners, together with Leafly, Stage One Hashish, LLC (“Stage One Dispensary”), and Rosanna St. John, are looking for to have these laws invalidated on the grounds that they’re arbitrary, capricious, and in violation of each the USA Structure and the New York Structure. They’re additionally requesting a brief halt to the enforcement of those laws till the authorized proceedings are resolved.

The particular provisions being challenged are:

1. The Third-Celebration Advertising and marketing Ban (9 N.Y.C.R.R. §§ 123.10(g)(21) and 124.5(a)), which restricts sure varieties of advertising and marketing by third-party web sites.
2. The Pricing Ban (9 N.Y.C.R.R. § 124.1(b)(5)(ii)), which imposes limitations on pricing info.
3. The Third-Celebration Order Ban (9 N.Y.C.R.R. § 123.10(g)(23)), which restricts the flexibility to put orders by third-party web sites.
4. The Third-Celebration All-Licensee Itemizing Mandate (9 N.Y.C.R.R. § 124.1(b)(2)), which requires third-party web sites to checklist all hashish licensees.
5. The Third-Celebration Distributor Itemizing Mandate (9 N.Y.C.R.R. § 124.1(c)(1)-(2)), which mandates the itemizing of third-party distributors.

The arguments

The petitioners argue that the Third-Celebration Advertising and marketing Ban and the Pricing Ban infringe upon free speech rights protected by the First Modification of the U.S. Structure and Article I, § 8 of the New York Structure by limiting lawful business speech. Additionally they declare that every one the challenged laws are arbitrary and capricious as a result of they both battle with New York’s Hashish Legislation, lack a rational foundation, or exceed the authority of the Hashish Management Board.

What the plaintiffs need

Moreover, the petitioners are requesting a brief keep on the enforcement of those laws, asserting that they’re possible to achieve their authorized problem and that they’re dealing with irreparable hurt because of the violation of their constitutional rights and potential enterprise losses. They argue that sustaining the established order is in the very best curiosity of justice, and so they urge the court docket to invalidate these laws on the grounds of being arbitrary, capricious, irrational, and unconstitutional.

_____

This First Modification problem is simply the newest litigation, sadly, in a program that has seen numerous misfires and delays. We’ll proceed to observe this lawsuit, whereas awaiting solutions on basic points that the Hashish Management Board has inexplicably failed to handle. Keep tuned to our New York protection for extra.