In a move that typifies how indirect legislation can achieve what direct legislation may not, the House Appropriations Committee has advanced a bill that would allow for cannabis ads to be broadcast on local television and radio. In the FY23 Financial Services and General Government spending legislation, the Committee included a provision that would bar the FCC from using any of the funds made available in the Appropriations Act to penalize or deny a license to a television or radio station that broadcast advertisements for cannabis businesses if cannabis can legally be sold in the “community” where the station is licensed.
In other words, the bill would not permit cannabis ads on local outlets. But it would stop the FCC from imposing penalties if local stations put those ads on air. Which is likely why, while there was some objection to the provision, the final bill passed the committee on a simple voice vote.
So, why do we care? If it passes, a portion of the Act (Section 512 to be precise) would put broadcast stations – which are regulated by the FCC – on the same footing as cable outlets – which are not. This could be significant, not only because cannabis advertising spend would likely increase substantially over the current projection of over $18 billion this year, but the advertising audience would be expanded to the 25% of viewers who still watch their local stations, and the 82.5% of adults who listen to radio.
Ah, like all good things, more opportunities to advertise comes with more legal hurdles to trip over. Weed advertisements face the same scrutiny as all advertising: they must be truthful, substantiated, and not misleading. So before rushing out to film a new ad to be aired on late night television, cannabis businesses will need to make sure that their ads pass muster under all of the laws and regulations that apply to any advertisement. As well as competitors looking for any reason to make a claim that an advertisement is improper.
And, because this is in an appropriations bill, even if passed it would only prohibit FCC enforcement from October 1, 2022 through September 30, 2023. Which would mean the push for local cannabis advertising would become an annual event unless and until there is federal legislation directly addressing the issue.
Of course, all of this depends on whether Section 512 survives the trip through the House and Senate unscathed, a questionable proposition in this day and age. If it does, then we could see a slew of new puns on weed, pot, and grass, as well as a pile of residuals for all those “Mary Jane” songs.
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.
