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Victory for Cannabis Companies: New York Court Stops Strict State Rules on Legal Cannabis Products

The recent decision by the New York State Supreme Court marks a pivotal moment in the ongoing struggle between hemp industry players and state regulatory bodies. The court issued an injunction favoring various hemp companies and organizations (collectively referred to as Hemp Parties) against the New York State Cannabis Control Board (CCB) and other state authorities. This legal action stem

s from the Emergency Regulations adopted in July regarding the processing and retail sale of cannabinoid hemp products, which the Hemp Parties challenged as illegal.

These Emergency Regulations mandated a specific ratio of CBD or other cannabinoids to THC (at least 15:1) in hemp-infused products and imposed strict limits on the THC content per serving and container. The Hemp Parties argued that these rules were not only implemented in violation of New York's Cannabis Law and Administrative Procedures Act but were also arbitrary and capricious, lacking any rational basis, and constituted an abuse of discretion.

This case, North Fork Distribution et al. v. New York, No. 907325-23, is a critical development in a series of legal actions taken by the hemp industry against state-level restrictions. Supreme Court Justice Thomas Marcelle, in his review, acknowledged the likelihood of the Hemp Parties' success in the case, highlighting the CCB’s failure to provide substantial evidence or studies justifying the Emergency Regulations. He also recognized the potential irreparable harm to the Hemp Parties without an injunction, as these regulations could unfairly benefit other vendors, diminishing the market presence of the Hemp Parties’ products.

Moreover, Justice Marcelle noted the balance of equities, emphasizing the economic hardships and employment losses that could result if the Hemp Parties were forced out of business in the current challenging market. He stressed that the equities in this case leaned in favor of the Hemp Parties, illustrating the significant impact of such regulatory decisions on small businesses and their employees.

This ruling not only represents a victory for the Hemp Parties but also highlights the complexities and challenges of regulating the burgeoning hemp industry. It underscores the need for policies that are informed, rational, and considerate of the industry’s unique landscape, as well as the broader legal and economic implications of such regulatory actions. The decision also serves as a reminder of the importance of legal advocacy in ensuring fair and equitable treatment of industries within the legal framework.

Ruling attached below:

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