In a stunning turn of events, an Albany County Supreme Court judge has delivered a groundbreaking decision, invalidating all New York State regulations for adult-use cannabis. The ruling, which deems the regulations arbitrary and capricious, strikes at the very foundation of the NY Office of Cannabis Management’s (“OCM”) efforts and raises significant concerns about the competence and efficacy of New York’s cannabis regulatory bodies.

The decision, delivered by Judge Kevin Bryant, stems from a lawsuit brought forth by Leafly Holdings, Stage One Dispensary, and a cannabis consumer who relies on Leafly for informed purchases. The plaintiffs contested specific regulations, particularly those restricting third-party marketing for cannabis companies. However, Bryant’s ruling extends beyond the targeted regulations, invalidating key sections (parts 118-121, 123-125, and 131) that govern New York’s entire adult-use cannabis market.

Judge Bryant’s decision highlights the regulators’ failure to provide a factual basis for the stringent regulations, accusing them of proceeding without proper justification. This unprecedented ruling not only undermines the OCM’s authority but also casts doubt on the legitimacy of the entire regulatory framework.

The legal battle is far from over, as experts anticipate the OCM will appeal the decision. However, the uncertainty looms large, with potential implications for the entire regulatory landscape. Joshua S. Bauchner, chair of the firm’s Cannabis Hemp & Psychedelics practice group, noted that “the OCM has lost most court challenges, public frustration with the program and, particularly that of applicants, is through the roof, and in the face of recent comments from Governor Hochul describing the cannabis rollout as a ‘disaster’, confidence in the agency is at an all-time low. Particularly frustrating is the persistent focus on shutting down unlicensed shops rather than on getting shops licensed which addresses both issues – a true panacea.”

Leafly’s lawsuit underscores broader concerns about regulatory overreach and its implications for industry players. Judge Bryant’s scathing critique of the OCM’s rulemaking process echoes past frustrations with the agency’s practices, reflecting a systemic issue that demands urgent attention.

As the cannabis industry grapples with this landmark ruling, stakeholders must navigate an uncertain terrain fraught with legal complexities and regulatory scrutiny. The implications of Judge Bryant’s decision reverberate beyond the courtroom, shaping the future of New York’s burgeoning cannabis market.

You can read the decision here.

We will continue to monitor developments closely and provide updates as the situation unfolds. In the meantime, we encourage those that may be impacted by this to stay informed and engage in constructive dialogue to chart a path forward amidst these unprecedented challenges.