Leafly lawsuit challenges New York ban on third-party marijuana marketers

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A rule banning third-party advertising and marketing services in New York’s fledgling adult-use marijuana market is being challenged in court.

Cannabis e-commerce platform Leafly Holdings is the principal in a lawsuit against New York’s Office of Cannabis Management (OCM) in Albany County state Supreme Court, according to Spectrum News 1 in Buffalo.

The lawsuit also includes Stage One Dispensary in Rensselaer and a marijuana consumer as plaintiffs, Leafly told MJBizDaily via email.

The suit claims the OCM unfairly targeted so-called “third-party platforms” such as Leafly in adopting regulations that hamstring the industry and restrict retailers’ ability to market and promote products.

“Small business owners who face significant limitations in their ability to reach cannabis consumers face additional, unprecedented restrictions as a result of the new regulations,” Leafly said in a statement sent to MJBizDaily.

“We believe that everyone has the right to shop where they’d like and price compare accordingly, and those rights have been well established in a long line of court cases addressing commercial speech that New York has chosen to ignore.”

Leafly describes itself as a leading customer acquisition tool for more than 7,800 brands and 4,600 retailers that utilize its services to connect with millions of consumers in the United States and Canada.

Its website highlights more than 5,000 cannabis strains and features more than 11,000 cannabis stories and resources.

The Seattle-based company earlier this year pivoted away from reporting on the marijuana industry, and instead, focused on providing consumer-oriented content such as product information and descriptions.

The business shift came within a few weeks of Leafly laying off 40 employees, or 21% of its workforce,

The tentative date for New York regulators to enact the new adult-use regulations is Oct. 4. but a compromise could be reached before litigation ramps up, Spectrum News 1 reported.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.