OLYMPIA — The Washington State Liquor and Cannabis Board has revised a rule that would have banned advertising by marijuana retailers at Hempfest, reversing its position in light of a lawsuit filed last month by a pair of the state’s largest cannabis retailers who claimed the board was violating their free-speech rights.

The board on Wednesday issued a revised rule making it clear that marijuana retailers can use the names of their businesses on signs and at booths at Hempfest, the giant celebration of all-things-cannabis held at Seattle’s Myrtle Edwards and Centennial parks for the past 27 years. An earlier bulletin appeared to ban all references to marijuana retailers and their products.

The decision, which came after the board (WSLCB) consulted the state Attorney General’s Office, was applauded by Hempfest organizers.

“We applaud the Attorney General’s office for observing the free speech of licensed cannabis businesses to engage in noncommercial messaging at public events,” Seattle Hempfest director Vivian McPeak said. “We look forward to hosting those businesses as sponsors or vendors at Hempfest this year, and we invite their participation at the festival.”

Stephanie Davidsmeyer, a spokeswoman for the WSLCB, provided a copy of the revised bulletin but otherwise declined to comment.

The revision also headed off a move by the two businesses that filed the lawsuit — Universal Holdings LLC and Multiverse Holdings LLC — to obtain an injunction in Thurston County Superior Court to prevent the WSLCB from enforcing the rule.

The lawsuit alleged the WSLCB issued a “vague and confusing” bulletin in April that intended to “actively dissuade licensed marijuana businesses from participating at Seattle Hempfest” by suggesting they will be cited for violating cannabis advertising restrictions imposed as part of Initiative 502, which legalized the recreational consumption of marijuana. The restrictions prevent “any sign or other advertisement” for a cannabis business within 1,000 feet of a school, playground, library or public park.

The revised bulletin clarifies that those restrictions “apply to any signs or advertisements that are commercial in nature.”

“On the other hand, the use of a business trade name on a booth, or identified as part of a sponsorship level that is noncommercial, would not constitute a violation of the statute,” the revised rule says. “This would include identification of sponsors who are supportive of an advocacy event (such as Seattle Hempfest).”

The ban also would not apply to “educational or advocacy literature” or “general information about marijuana, grow cycles, coloration, fragrance etc ...”

Hempfest will be held from Aug. 16 through Aug. 18.

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