Discussion of FCC, copyright, advertising and other legal issues of importance to radio and television broadcasters and other media companies
Principal Editor: David O’Connor
Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.
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As more and more states revise their laws to decriminalize or legalize marijuana use (for medical and recreational purposes), and more and more cannabis businesses in those states begin operations, broadcasters have been looking to provide their advertising services to these new companies. But, as we’ve written before (see, for instance, our articles here and here) , marijuana is still illegal under federal law, as is the use of the radio airwaves to aide in its distribution. Because broadcasters are federal licensees, there is a heightened concern that those federal licenses could be jeopardized if broadcasters start accepting such advertising. In the last few weeks, however, there have been some legislative moves on Capitol Hill proposing to remove some of those concerns – but all such efforts have a way to go before broadcasters should consider changing their approach to such ads.
The bill that would seemingly have the potential to lift those restrictions is the Cannabis Administration and Opportunity Act, a draft bill that would remove marijuana from Schedule I, which is the list of drugs that are prohibited for all purposes under federal law (see draft text here and summaries here and here). While Senate Majority Leader Schumer had indicated that this bill might be considered by the Senate soon, there are many questions as to whether there are sufficient votes to pass the measure, whether there would be enough time to get House approval before the end of the Congressional term, and even whether the President would agree to sign the legislation if passed. Looking at the text, you realize that it is not a simple piece of legislation, as it would change many aspects of government policy to accommodate the proposed change in status of marijuana under federal law. Even if it were to become law, its effect on the advertising of marijuana may not be immediate.
Continue Reading Looking at Legislative Proposals that Would Allow Broadcasters to Accept Marijuana Advertising
Last week, the US House of Representatives passed the MORE Act which, if enacted, would take marijuana off the list of Schedule I drugs – those drugs whose possession and distribution is a federal felony, as is the use of the radio waves to promote their use. As we have warned before (see, for instance, our article here published when an earlier version of this bill passed the House in 2020), because of the laws making the sale of marijuana a federal crime and prohibiting the use of radio waves to promote that sale, broadcast stations should think twice about any marijuana advertising, even in states where it has been legalized. Thus, the passage of MORE Act through the House should not be taken as a sign to start running marijuana advertising on your broadcast station.
First, it is important to remember that this bill was passed only in the House of Representatives. Without also being approved by the Senate and being signed by the President, the House’s action had no legal effect. Because of the way that Congress works, if the bill does not pass the Senate in the current legislative session, which ends in the first few days of January 2023, the whole process must start over again – bills do not carry over from one Congressional session to another. So, if Senate action is not forthcoming this year, a new Congress would have to start with a new bill, and a new House of Representatives and a new Senate would both have to vote to adopt the legislation. The MORE Act passed the House with few Republican votes, so if the composition of the House changes next year, that may not bode well for this legislation if it does not pass the Senate this year.
Continue Reading House of Representatives Passes MORE Act to Remove Marijuana from Schedule I – Don’t Rush to Start Airing Pot Ads Yet
Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.
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Last week, there was much written in the press about the MORE Act passing in the House of Representatives, taking actions to decriminalize marijuana under federal law. This would include removing marijuana from Schedule I, which is the list of drugs whose use for almost all purposes is prohibited in the United States. The passage of this bill through the House, though, should not be taken as a sign to start running marijuana advertising on your broadcast station – though there are some signs that the day on which that advertising can be run may be in sight.
First, it is important to remember that this bill passed only in the House of Representatives. Without also being approved by the Senate and being signed by the President, the House’s action had no legal effect. Because of the way that Congress works, if the bill does not pass the Senate in the current legislative session, which ends in the first few days of January 2021, the whole process must start over again – bills do not carry over from one Congressional session to another. So, to become law in the new year, a new Congress would have to start with a new bill, and a new House of Representatives and a new Senate would both have to vote to adopt the legislation.
Continue Reading MORE Act Passes House – But Don’t Rush to Run Marijuana Ads on Your Broadcast Station
CBD has been a hot topic for media companies – trying to decipher what products are legal and which can be advertised. We have written a number of articles on CBD, hemp and other cannabis advertising issues (see, for instance, our articles here, here, and here). Each of these articles highlights the confusion about the current state of the law on CBD, not just in the media, but across all industries. Some recent government correspondence indicates that clarity on the legality of CBD production may be coming soon, but that any resolution about the health claims that can be made about CBD products and their use in food and drugs may still be years away. These letters also show that the advertising community risks government concern if advertising does not recognize the continuing regulatory concerns about CBD health claims and its use in food and drugs.
The correspondence that most directly addresses marketing issues is this Warning Letter from the FDA to a CBD distributor in which the FDA warned the distributor about health claims made about its products in the promotional materials that it was distributing online. Many seemingly generic claims about the benefits of CBD were singled out as a source of concern, along with many claims that were more specific citations to studies suggesting that CBD was helpful in treating defined ailments. From the tone of the FDA letter, claims about third-party findings on specific health benefits should not be included in promotional materials. Nor should the more generic claims like these cited in the letter as being problematic:
Another issue that arises in advertising CBD and other hemp products is whether any of these products are being legally produced. An interpretative opinion from the USDA sets out under what circumstances the production of CBD products is currently legal in the US. This opinion sets out that the only legal hemp products being produced at this point are the limited products being produced for research purposes under the 2014 Farm Bill. As we wrote here, the government has previously stated that it did not seem to think that commercial production was authorized under the 2014 Bill, yet some growers operating under these pilot plans seem to be relatively big businesses. Otherwise, hemp products including CBD can only be grown pursuant to provisions of the 2018 Farm Act with a USDA license or one issued by a state or tribal nation under a plan approved by the USDA – and the USDA has not yet approved any such plans nor even adopted the framework under which they will evaluate such plans. According to the USDA website, the USDA intends to have regulations in effect by Fall 2019 to accommodate the 2020 planting season. If a state or tribal nation submits a plan before that time, USDA will not review or approve the plan until the regulations are implemented. Thus, there appears to be a very limited universe of hemp products that are currently legally produced and thus can be used for making hemp-derived CBD.
Continue Reading Another Warning Letter on CBD Promotional Copy – and Some Ideas on Timing of Government Clarity on Rules on Legal Hemp Products
Perhaps some of the most controversial areas in broadcast advertising are those surrounding the advertising of cannabis products. While many states claim to have legalized marijuana, either for medical or recreational purposes, the Federal government still considers its possession and distribution a felony, and has specific laws that criminalize the use of radio frequencies, the Internet, and publications to promote its use. At the same time, the Federal government has recently decriminalized the possession of various hemp-based products with less than .3% THC (the psychoactive ingredient in marijuana) in the 2018 Farm Act. This has led to an explosion in the sale of CBD products – even though the production of such products is, for the most part, to only be conducted after either the adoption of state laws approved by the US Department of Agriculture or under Federal rules that the USDA is supposed to approve – none of which has happened yet. With all these issues outstanding, I was recently asked to talk about the advertising issues surrounding these products before a continuing legal education seminar sponsored by the New York State Bar Association. The slides from my presentation are available here.
As we have advised broadcasters before, because they are Federal licensees, and marijuana is still a federally prohibited substance, there is substantial risk in running any advertising for products supposedly “legal” in the state in which they are being used. These ads are particularly of concern during the license renewal cycle that begins next month, as objections from anti-marijuana activists could put this issue directly before the FCC. Even though states may have adopted rules governing advertising for these products, the federal law still poses great risks for broadcast licensees – just as it does for other federally-regulated entities. That is one of the reasons that federally-chartered and insured banks have stayed away from taking deposits from marijuana-related businesses (a bill is presently pending in Congress to allow banks to take deposits, but its prospects are uncertain).
Continue Reading Looking at “Legal” Marijuana and CBD Advertising – A Presentation on the Issues
The developments surrounding the regulation of cannabis products, and the impact of that regulation on the ability of broadcasters and other media companies to run ads for these products, continue on an almost daily basis. Of course, the developments don’t all point in a single direction. As described below, at the same time as the FDA schedules a hearing to look at cannabis products and the rules that should apply to them, the FTC and FDA together have written warning letters to CBD marketers advising them to stay away from making specific health claims about their products and to avoid promoting edible products. What does this mean for media companies that have been approached to advertise these products?
We very recently wrote about the murky state of the law on CBD advertising (mentioning our continuing concerns about marijuana advertising even in states where it has been “legalized”). In that article, we warned that broadcasters should be particularly concerned about selling advertising that markets CBD products to be ingested, or advertising which makes unsupported health claims. In a joint action announced last week, the FTC and the FDA wrote letters to three sellers of CBD products, warning those companies that their marketing raised legal issues. In these letters, the FTC expressed concern that the marketing contained health claims that could not be substantiated, and the FDA was concerned about the marketing of supplements and other CDB products to be taken orally that had not been approved by the FDA as either foods or medicines. At least one of the letters cited a “salve” that presumably was not to be ingested, so the concern there seemed to be solely the specific health claims made for the product. These letters reinforce the concerns that we expressed about advertising that contains specific health claims or which deals with products to be taken by mouth (either as dietary supplements, medicines or in other foods) – so stations should be especially wary of such ads.
Continue Reading FDA Schedules Hearing on Cannabis; FTC and FDA Send Cease and Desist Letters to Sellers of CBD Products – What is the Effect on Advertising?
