By Richard Hamlin, Hamlin Cody

California’s Bureau of Cannabis Control allowed cannabis advertising on interstate highways if at least fifteen miles from the state’s border.  In late November 2020, a judge in San Luis Obispo ruled that the regulation was illegal.  The court formally entered its judgment on January 11, 2021.

On January 21, 2021, the Bureau of Cannabis Control issued a press release about the decision.  The press release notes the judge’s decision declaring its regulation invalid.  It tells cannabis licensees that they may not place new advertising on interstate highways or on state highways that cross the border.  It instructs them to begin removing existing advertising that fit that criteria but does not impose a deadline.

We spoke with three independent billboard operators to get a feel for how this decision might affect the OOH industry.  One operator had a single sign on an interstate highway and two on local highways.  The cannabis advertiser on the interstate had paid a premium rate for access to the board.  When that ad came down, the operator was able to command the same premium rate from a new, non-cannabis advertiser.  The boards on local highways were not affected.

Another operator has a cannabis advertiser on one face of a back-to-back bulletin.  It’s on a state highway and will not be directly affected.  This operator anticipates higher revenue from both faces but understands the need to be reasonable.  It is far better to enjoy a long-term relationship than it is to enjoy short-term windfalls.  (That’s our own philosophy with clients, and it works.)

A third operator has asked the Bureau of Cannabis Control to clarify its press release, which instructs operators to “begin the process” of removing cannabis advertising.  OOH is not his principal business and he needs about ninety days’ notice find a new advertiser, prepare art, receive vinyl, and to hire an installer.  BCC has not replied to his calls or emails.

From a legal standpoint, neither the cannabis industry nor the OOH industry participated in the San Luis Obispo lawsuit.  While the Bureau of Cannabis Control was a party and is bound by the decision, it is not a proxy for OOH companies or for the cannabis industry.  It may be too early to know whether the decision will reduce revenues enough to make challenging the new regulation worthwhile.

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