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).
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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. 
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Broadcasters, like other federally regulated industries, continue to be leery about advertising for marijuana, even in states where cannabis dispensaries have been legalized for medical or even recreational use.  This week, the NY Times ran an article about companies trying to provide ways for dispensaries to use electronic payment systems, as federally regulated banks and credit card companies often refuse to deal with these businesses.  This is despite guidance given by the Department of Justice to banks about how to handle funds coming from such organizations.  Where the federal regulator (the FCC) has provided no advice whatsoever, broadcasters as regulated entities need to be very restrained in their desires to run ads for these dispensaries that appear to be legal under state laws.

Broadcasters are of course Federal licensees, and marijuana is still a controlled substance, illegal for sale to the public under Federal law.  While the current administration in Washington has said that enforcing marijuana laws against those who comply with state law is not an enforcement priority, it gave that advice provided a cannabis business observes very strict guidelines.  Strict Federal laws against any sale of marijuana remain on the books, and any search of the DOJ website provides numerous examples of legal actions brought against companies and individuals that don’t fit within those guidelines.  Plus, all it takes is a change in enforcement priorities by the Federal government and even dispensaries that are legal under state law can be closed by Federal actions.  And even if the priorities don’t change, the Department of Justice suggestions to Federal prosecutors don’t stop individual prosecutors from taking actions, especially if the cannabis-related business is found to have violated some other law or if it is acting outside of the strict limits that the DOJ set out in suggesting prosecutorial restraint.  Promoting a business that is not legal under Federal law is dangerous. 
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