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New York Court ruling (and another New York lawsuit)

Plus, DeSantis comes out against legalization

Good morning.

It’s another busy news day in the cannabis world — just the way we like it.

In this one, New York gets sued again, Ron DeSantis again comes out against legalization, and much, much more. 

- Jeremy Berke & Jay Rosenthal

💡What’s the big deal?

OCM suffers another setback

What happened: A New York State Supreme Court judge issued an order declaring all of the state’s recreational cannabis regulations as unlawful — void as arbitrary and capricious in legal-ese — in yet another blow to the state’s Office of Cannabis Management.

But get this: Later in the day, the judge corrected the order to say that the only unlawful parts were the specific marketing regulations, rather than the entire regulatory structure of New York cannabis. What a correction!

Zoom in: The ruling stems from a September lawsuit filed by cannabis information site Leafly, where Leafly claims the OCM unfairly targeted them and other third-party marketing platforms by preventing product promotion and marketing. 

It’s essentially a free speech-by-marketing case. And it’s another lawsuit that the OCM has to contend with, right in the middle of the Governor Hochul-ordered review process

Yes, but: Despite the holy sh*t headline takeaway — and the midday fear — smart cannabis lawyers say that the end result is up in the air.

Jeffrey Schultz, a partner at Foley Hoag, told me that a potential outcome of the order is that the OCM will file a notice and the ruling will be stayed for 30-days. And, the specific marketing and advertising regulations are likely to get rewritten, not the entire package.

Fatima Afia, an attorney at Rudick Law Group, cautioned that while she “doesn’t have a crystal ball,” she said that a 30-day stay is likely. She also agrees with Schultz, that the specific marketing and advertising regulations are likely to be re-written, not the whole package — but it will still create headaches for license applicants. 

And these things are always quickly moving, so what’s true today, might not be tomorrow. 

Celebrating the win: Leafly issued a statement following the ruling: "We are pleased to hear that the court agreed with our claims and we couldn’t be more excited to support consumers and licensed retailers in New York with Leafly’s full suite of products and services. We hope this decision ultimately leads to a healthy, stable adult-use market in the state." Us too, Leafly, us too.

The final word: It’s been a tough run for the OCM three years into New York’s legalization.  Add this suit to the pile of lawsuits the OCM has fought, and will have to be prepared to fight. 

And for small businesses that are hoping to get their dispensaries up-and-running, this only adds to the confusion they’re dealing with — and risking their hard earned time and money for. 

And if that wasn’t enough, Gracious Greens, a cannabis company, on March 29 filed a lawsuit against the OCM challenging the requirement to have at least a 1,000 foot buffer between dispensaries.

As we like to say in New York City, oy vey


💬 Quotable

“It will reduce the quality of life,” Florida Gov. Ron DeSantis said, per Florida Politics, regarding the ballot initiative to legalize cannabis. “Do we want to have more marijuana in our communities? I don’t think it’ll work out well, but it is a very, very broad amendment.”

And more: DeSantis, a conservative Republican, said he expects Florida voters to “reject” the proposal. He previously voiced opposition to legalization, though he has received campaign donations from Trulieve, the Florida cannabis company supporting the initiative. 

Our take: DeSantis’ position seems to reflect the ossifying conservative position on cannabis, like Virginia Gov. Glenn Youngkin who vetoed legalization in the state. They don’t like it, they don’t want it, and they’re not open-minded to the potential benefits. It’s a position based in fear mongering, and one that seems to go against the will of a majority of voters. 

Rules, regs, and a go-live timeline

Driving the news: Ohio voters approved adult-use cannabis last year. But as close industry followers know, voting “yea” and going live can be a long journey. We learned this week that sales could begin as early as this summer - and we also got a glimpse of some of the rules and regs that may govern Ohio’s market.

Rules and regs: In a 45-page overview of how the rules and regulations will be drawn up, we got some nuggets

  • Dispensaries could be opened longer hours to accommodate adult-use cannabis sales,

  • Orders could be allowed to placed online, ahead of time, 

  • Self-service kiosks could get the nod, and 

  • Ohio could get some drive-through cannabis dispensaries (which is super cool!)  

There’s much, much more for all you reg-heads.

A major market: While New York and Florida have been getting loads and loads of attention the past few months, let’s not forget that Ohio is the 7th largest state in the Union – with almost 12 million people. Nothing to sneeze at.

Plus, if Pennsylvania can get their act together, we’re looking at a combined Ohio + Pennsylvania market of over 25 million people - several million more people than either New York or Florida.

What’s next: The proposed rules have a public comment period open through April 24th - so have your say. And if all goes well, we’ll start to see legal cannabis sales launching this summer!


Opportunity for cannabis innovators*

Join Grown In and 1871's upcoming Cannabis Innovation Summit on April 17th, which includes a special keynote from Jim Belushi.

This event is a must-attend for anyone looking to stay ahead in the rapidly evolving cannabis industry.

Connect with leading minds in the cannabis industry, explore groundbreaking trends, and gain insights into the future of cannabis tech opportunities.

This event is open to public participation and free to attend.

Participate in dynamic industry-focused workshops and keynotes and network with pioneering startups shaping the future of cannabis in startup expos and pitching showcases.

In-person programming and networking will be held at 1871 in Chicago's Merchandise Mart from 10:00 AM - 6:30 PM CDT, with live streaming available for virtual participation.


⚡Quick hits

A Bloomberg editorial posited that legal cannabis is making roads deadlier. Rebutting the questionable data is a newsletter for another time — but it’s interesting that anti-cannabis folks are moving to a position that’s not anti-legalization. They’re just calling for more regulation. You can read that editorial here, and we’ll have more for you on it from Jeremy. 

Rep. Nancy Mace (R-SC) went after her own party for their obstinance on cannabis legalization, on The Dales Report’s podcast. “I can tell you that Republicans that represent purple districts overwhelmingly support SAFE—and then some,” Mace said. “So if Republicans want to keep the House, it’s a good bill to have on the floor.”

💬 Deals, launches, partnerships

Cannabis firm Poseidon will invest in PCA, a startup aimed at addressing the lack of capital for social equity entrepreneurs in New York, MarketWatch reports

Cannabis pre-roll brand Jeeter is launching a “boutique” flower line in California. 

The Cannabist is partnering with Edie Parker, a woman-owned cannabis lifestyle brand, to bring products to multiple states

📰 What we’re reading

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