New York’s Cannabis Control Board recently approved new rules around cannabis marketing and advertising in a bid to provide legal marijuana operators an advantage over illegal operators.
The new rules, which are subject to a 45-day public comment period, were developed in response to feedback from the industry. The changes include:
- Repeal of a ban on promotions that feature price discounts or loyalty rewards
- Allowing ads that use bright colors and enhanced lettering
- Allowing digital ads on websites controlled for visitors who are over age 21
- Allowing dispensaries to advertise their contact information on billboards
- Increasing the allowable amount of outdoor signage to an unlimited number on retail shops and to three when the signed are not affixed to retail stores
New Rules Come After Court Losses and Other Delays
The new rules come after a federal judge struck down the Office of Cannabis Management’s regulations governing third-party marketing.
In his ruling in Leafly Holdings, Inc. et al. v. NYS Office of Cannabis Management, et al., state Supreme Court Justice Kevin R. Bryant criticized state regulators for not providing evidence documenting the development or crafting of the harsh regulations.
Leafly, a Seattle-based company, operates a marketing platform that exposes customers in the United States to more than 7,800 brands and 4,600 marijuana retailers. It claims to process more than 4 million orders annually. New York’s regulations would ban businesses located in the state from advertising on the platform. It called the rules vague and alleged the strict regulations barring third-party marketing platforms from operating in the adult-use cannabis space violated the company’s free-speech rights.
New York is more than three years away from passage of the Marijuana Regulation and Tax Act (MRTA) and is struggling to roll out a fully operating licensing system to capitalize on a market projected to generate billions of dollars. Numerous lawsuits, some already garnering unfavorable rulings for the state, have been filed challenging the adult-use regulations. Gov. Kathy Hochul recently conducted a sweeping overhaul of the state’s Office of Cannabis Management. Meanwhile, an illicit marijuana market flourishes in New York.
Harris Beach’s Cannabis lawyers will continue monitoring this lawsuit and others and report out on new developments. If you have questions for our Cannabis Industry Team or need help on cannabis-related matters, please reach out to attorney Heidi Schult Gregory at (585) 419-8720 and hgregory@harrisbeachmurtha.com; attorney Francis L. Gorman, III at (585) 419-8628 and flgorman@harrisbeachmurtha.com; or the Harris Beach attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.
