United States: Marijuana Ad Rules Set In Massachusetts, But Federal Prohibition Creates Uncertainty

Last Updated: April 6 2018
Article by Neil Austin

We posted in January about proposed regulations for advertising adult-use marijuana in Massachusetts once retail sales begin on July 1, 2018.  After a series of public meetings and more than 500 public comments, the Cannabis Control Commission ("Commission") revised the draft and unanimously approved final regulations in early March.  This means that the rules of the road for advertising by "Marijuana Retailers" in Massachusetts are now set, and with a few minor exceptions, the final rules are identical to the proposed rules.

However, the clarity at the state level is overshadowed by continued prohibition of cannabis at the federal level.  An advertiser could adhere strictly to the Massachusetts rules and yet still face potential criminal liability at the federal level That dynamic poses challenges for those looking to advertise in burgeoning retail cannabis space.

Clarity at the State Level

As described in our previous post, the draft regulations allow Marijuana Retailers to advertise cannabis in Massachusetts provided that:

  • The ads are true and do not mislead consumers,
  • Steps are taken to ensure that the ads do not reach anyone under the age of 21—including ensuring that at least 85% of the target audience is reasonably expected to be 21 or older (the "85% Rule"),
  • The ads include several Commission-approved warnings, and
  • The ads comply with specific provisions aimed at keeping cannabis promotion discreet.

The final regulations impose the same basic standard, making only a handful of minor changes to the original draft, specifically:

  • Clarifying that a marijuana establishment may post prices in the store and may respond to questions about pricing on the phone. (The initial draft provided that a price list could be made available online but did not otherwise discuss posting prices in stores or responding to questions about price.)
  • Clarifying that the "85% Rule" applies to ads made on mobile applications and social media as well as to ads made on television, radio, and the internet;
  • Substituting the word "current" for "up to date" in describing the type of data necessary to substantiate compliance with the 85% Rule – i.e., "reliable and current audience composition data;"
  • Adding language instructing consumers to call 9-1-1 in the case of accidental ingestion; and
  • Specifying that nothing in the regulations "prohibits a Marijuana Establishment from using a mark provided by the Commission which uses images of marijuana."

This last change reflects the decision of the Commission to require two very specific symbols to be used on product labels to indicate that a product contains cannabis and is harmful to children.

With these changes, the rules for advertising cannabis in Massachusetts are now firmly established.

Uncertainty at the Federal Level

While the final regulations bring great certainty to cannabis advertisers in Massachusetts, they do nothing to address the uncertainty at the federal level.  The same federal law that makes it a crime to "manufacture, distribute, [or] dispense" any controlled substance, including marijuana, also makes it a crime to engage in certain types of marijuana advertising.

Indeed, the CSA includes several provisions of concern to potential cannabis advertisers.  First, it makes it a felony 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." 21 U.S.C. § 843(c)(1).  Second, it outlaws "knowingly or intentionally [using] the Internet, or [causing] the Internet to be used, to advertise the sale of, or offer to sell ... a controlled substance."  21 U.S.C. § 843(c)(2).  Third, it prohibits using any "communication facility"—including the mail, telephone wire, radio and "all other means of communication"—in committing or facilitating the commission of any felony under the CSA.  21 U.S.C. §843(b).

These provisions stand in stark contrast to those just published by the Commission, which expressly allow cannabis advertising.  As experience has shown in other jurisdictions, the CSA imposes significant challenges to advertisers in states with adult-use marijuana laws.

When recreational cannabis sales came to Oregon in 2015, newspapers in Portland began running ads for dispensaries and manufacturers.  This did not sit well with the United States Postal Service, which issued a memorandum to newspaper publishers warning that any advertisement advocating the purchase of marijuana from a dispensary violates the CSA.  Although the Postal Service decreed that a mailpiece containing a marijuana ad was "nonmailable," it has not sought to prevent such items from being delivered and instead has made clear that the Drug Enforcement Administration has authority to enforce the provisions of the CSA.

At the time the Postal Service issued its memo in Portland, the Department of Justice was taking a hands-off approach in states with medical or recreational cannabis industries.  The DOJ was acting in accordance with an August 2013 memorandum from Deputy Attorney General James Cole instructing United States Attorneys to rely on state and local law enforcement to address marijuana activity except in certain types of priority cases (e.g., distribution to minors and distribution by gangs and cartels).  Moreover, beginning in December 2014 a rider to a federal appropriations bill (the Rohrabacher-Farr Amendment) prohibited the DOJ from using funds appropriated under the bill to interfere with implementation of state medical cannabis laws.

Between the Cole Memorandum and the Rohrabacher-Farr Amendment, the threat of federal intervention in state cannabis advertising during the Obama administration was relatively low.  But that changed in January of this year when Attorney General Jeff Sessions rescinded the Cole Memorandum and announced a "return to the rule of law."  There is now nothing to prohibit a federal prosecutor from targeting an advertiser for alleged violations of the CSA.

Admittedly, the optics of pursuing a federal criminal case against someone state-compliance cannabis advertisers are not great.  But Attorney General Sessions is clearly among the minority of Americans who believe that marijuana should continue to be prohibited, and a high-profile prosecution cannot be ruled out, particularly in a deep blue state like Massachusetts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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