Billboard Insider published an article in its November 29, 2022 edition on Cannabis and Out of Home-November 2022, including that this issue was on the ballot of several states in last month’s elections. I wrote a May 3, 2021 Billboard Insider article on Cannabis regulations and presented on the regulation of cannabis products at the IBO 2021 Spring Conference.
As a reminder and update, a majority of the states now recognize the legality of some form of cannabis, whether recreational, medical, or CBD products. As mentioned, the legalization of cannabis products was on the ballots of several states last month, with Maryland and Missouri approving the legalization for recreational use, while North Dakota, Arkansas, and South Dakota Colorado rejected it. This is clearly a societal and legal trend, largely driven by economics. State and local governments, especially during the Pandemic, are anxious for new revenue sources, and tax revenue from cannabis sales have now exceeded $2B across the Country. During Covid-19, many states even deemed cultivation, processing, and sale of cannabis as an essential business. In Colorado, voters approved recreational marijuana in 2012, and by 2019, the State had collected more than $1B in marijuana tax revenues.
New York Senator and Majority Leader Chuck Schumer has advocated for relaxation of federal cannabis legislation, and the State of New York recently legalized recreational marijuana. President Biden even announced shortly before the elections that those charged or convicted for mere possession of marijuana under federal law would be effectively pardoned. In the meantime, the 2018 Federal Farm Bill legalized CBD products with less than .3% THC; so, over this percentage is technically illegal under federal law. However, especially after President’s announcement, there is currently no active federal prosecution under marijuana laws, but the cannabis industry is still prevented from accessing federal stimulus relief and interstate banking services.
Just because a state has legalized cannabis does not mean billboard advertising is also legal. For example, Colorado didn’t permit marijuana ads on billboards until just a couple years ago. Regulation of out of home advertising of cannabis varies by state and product. OAAA maintains a link on its website to comprehensive state laws on cannabis legislation and advertising regulation: https://oaaa.org/AboutOOH/Advocacy/CannabisLegalizationandRegulationMap.aspx. It has also reported that over 43% of cannabis ad spending goes to out of home media.
Typical advertising regulations are similar to those for alcohol, such as the following for Colorado, 1 CCR Section 212-3: (a) audience reasonably expected to be over age of 21, (b) can’t display consumption of products, (c) buffer zones (500’) from schools, churches, and playgrounds, (d) no advertising out of the state, or transporting across state lines, (e) compliance with local ordinances. Municipalities often regulate or prohibit the sale or advertising of marijuana, and do so under zoning and other land use ordinances. The OAAA has also adopted a Code of Conduct, to voluntarily refrain from excess, thereby avoiding governmental restraints. As reported in its recent article, Billboard Insider recommended remembering this good practical advice from retired OAAA EVP Government Affairs Ken Klein.
There are several special legal issues presented by the out of home advertisement of cannabis products, starting with the notion that the First Amendment generally protects the right to advertise legal products. Nevertheless, the major tobacco companies voluntarily agreed in a 1988 settlement agreement to not advertise their products on billboards. Many States that have legalized marijuana also require pre-approval of advertising copy, including Minnesota, Nevada, New York, North Dakota, and Pennsylvania. Further, States that permit marijuana advertising limit it to “adult audiences,” typically meaning “reasonable assurance” that at least 70% of the targeted consumers are over 21. Importantly, political speech, as opposed to commercial advertisement, advocating relaxation or increase in marijuana laws is afforded broader protection under the First Amendment. Relatedly, the refusal to display marijuana commercial or political ads on privately owned billboards is permitted; however, displays on recognized “Public Forums,” especially if viewpoint criticism, may have to be displayed.
In conclusion, the out of home operator should confirm compliance with state and local laws, and voluntarily exercise restraint to avoid governmental intervention.
[wpforms id=”9787″]
Paid Advertisement
