Now that marijuana is legal in some fashion or decriminalized in more than half of the United States, advertising has become even more of a hot button issue.
Legal cannabis businesses looking to advertise have a tricky tightrope to balance as Schedule I restrictions imposed by the federal government mean business owners can’t write off marketing expenses.
Advertising your cannabis company via radio airwaves is also illegal. In fact, marijuana ads promoting sales or distribution over the internet as a whole is technically illegal, but this is clearly difficult to enforce.
The state of Rhode Island has even cracked down on direct email marketing.
Recreational dispensaries in Washington for example want to distinguish themselves from the competition. Cooperatives in California want to promote pricing discounts or happy hours. Unfortunately, it would appear that the pitfalls of advertising in the cannabis industry are becoming more difficult to navigate, not less.
The USPS in Portland, Oregon issued a memo in December 2015 stating that marijuana advertisements in newspapers violate the Controlled Substances Act (CSA).
In fact, magazines are off limits as well. “The Controlled Substances Act makes it a felony for any person to place in any newspaper, magazine, handbill, or other publications, any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance, which includes marijuana,” the USPS said in a statement.
In January, the USPS contacted newspapers around the country stating that any publications selling printed ad space for marijuana advertisements would be violating the CSA and that the USPS would alert the DOJ if such publications are distributed to readers through the U.S. mail system. For those publications based in states where cannabis is legal, this created quite a stir since advertising dollars are integral to revenue and since marijuana is the news. (See the Rolling Papers film about The Denver Post’s marijuana editor).
Congressman Jared Huffman of California is taking a stand for cannabis advertising in respect to the aforementioned newspaper ad placements. Huffman oversees the 2nd District commonly known as The Emerald Triangle of California – a prominent region for marijuana cultivation encompassing Humboldt, Mendocino, and Trinity counties. In conjunction with seven other lawmakers, Huffman issued a letter to the Department of Justice (DOJ), the governing body that would prosecute any publication convicted of violating the CSA on such grounds, requesting clarification on how these matters would be handled.
The letter addressed to U.S. Attorney General Loretta Lynch requests that the DOJ issue a statement to clarify how the department will respond to any reports of violations issued by the USPS.
While this issue is a matter of state's rights versus federal laws, it also sheds some light on a need for some forward thinking in regards to how the cannabis industry will establish standards for appropriate advertising at the national level while also protecting minors from undue influence.
Prior to the Tax Act of 1937, cannabis was sold commonly as one of several ingredients for medical tinctures or less commonly as “Indian cigarettes” to treat asthma. Cannabis was one of the most common medicines in the U.S., used by children and adults alike. Product advertisements could be found in newspapers or in pharmacological journals.
If we look to the alcohol industry as a measure for how the cannabis industry might structure advertising regulations moving forward, one may be very interested to know that the alcohol industry self-regulates. They have their own industry organizations that determine acceptable standards. This would certainly be an optimal scenario for marijuana businesses given the history of oppressive laws enacted by the U.S. government in respect to the cannabis plant.
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The concerns of utmost importance are integrity – advertisements must not be misleading or deceptive to be compliant with FTC regulations. Of secondary concern is the viewing audience who will see the ads. All advertisers want to influence future consumers, but care must be taken to protect future generations from harm. Since research studies show that cannabis consumption may negatively affect cognitive development in individuals under 25, we have a moral obligation to direct our audience targeting to reach those consumers with a fully-developed frontal cortex.
The current rule of thumb for the alcohol industry is that 71.6% of the audience must be 21 or over. Any commercial websites or social media employ age-gates to warn users of the restricted content. In terms of content, guidelines suggest that ads should not promote over-consumption or glorify the correlation between consumption and sexual pleasure as a means of glamorizing the product.
States such as Washington and Colorado are already implementing these guidelines at the state level. Public ads such as billboards or metro placements are restricted, and advertising near schools is prohibited. In Colorado, digital pop-up ads are illegal since they are not age restricted.
With the efforts of lawmakers, such as Jared Huffman, to spur clarification by the DOJ, businesses will be better positioned to make decisions about how cannabis should be advertised and about how to abide by the law. Until then, we are best-advised to monitor ourselves to prepare for the future of nationwide legalization.