Earlier this week, cannabis e-commerce platform Leafly Holdings, Inc. (NASDAQ:LFLY) filed a lawsuit in Albany County state Supreme Court against New York's Office of Cannabis Management (OCM).

The Lawsuit

The move comes on the heels of numerous filed lawsuits against NY's cannabis regulators and New York state finally approving new regulations to resolve prior difficulties that led to a halt of new licenses or opening new dispensaries. The lawsuit from Leafly focuses on third-party advertising and marketing services and Leafly's attempt to challenge a ban on it, which has been in place since the launch of NY's market for the past two years.

Court Order Blocking Enforcement

On Thursday, the New York Attorney General's Office agreed to a stay, and the court entered an order to that effect, which blocks the enforcement of the challenged regulations against Leafly and fully operational licensed cannabis dispensaries in New York.

Leafly said in Friday's press release that it's "the only third-party platform that the stay expressly allows to continue offering paid advertising services, display retailer product pricing, and transmit orders to licensed cannabis retailers" within the Empire State.

See Also: New York's Cannabis Program In Turmoil As Judge Blocks New Dispensary Licenses

Why It Matters

As a result, while the stay is in effect, licensed retailers in New York will continue to access important advertising and marketing tools to help them succeed in the legal cannabis market and provide consumers with access to critical information as they make purchasing decisions.

"We are very pleased with the order, but remain concerned that the Office of Cannabis Management's stance towards third-party platforms deprives consumers and licensed cannabis retailers with important tools that help them navigate legal cannabis in New York state," Yoko Miyashita, CEO of Leafly, said. "We'll continue to work toward sensible regulations and are hopeful for a solution that empowers small businesses and supports consumer education and choice while still protecting the public health, safety, and welfare of the people of New York."

Carlos Pinto, chief commercial officer at Leafly, is a speaker at next week's Benzinga cannabis event in Chicago. He will undoubtedly shed more light on the ongoing legal spat.

What's Next

According to Leafly's attorney, Ryan McCall, if the two parties fail to reach a compromise before the new regulations get underway, the lawsuit should not impact licensing but could affect the marketing segment.

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Benzinga edit of images by Matthew Brodeur and Merakist on Unsplash