In a somewhat indirect move, Congress has advanced the effort to allow television and radio stations to begin accepting cannabis ads in states where medical and/or adult use is legal. More specifically, the House Appropriations Committee advanced the Financial Services and General Government appropriations bill for fiscal year 2023, which includes provisions that would eliminate the ability of the Federal Communications Commission (“FCC”) from taking administrative action against broadcasters for accepting cannabis ads in states where use has been legalized. Please note, despite this recent development, companies will still need to adhere to local cannabis marketing regulations.
What Does this Mean for the Future of Cannabis Ads?
While it is too early to say for sure, it does look like Congress has started to pave the way for cannabis ads to appear on the airwaves in the not too distant future. Note that the Appropriations budget Bill still needs approval by the full House of Representatives and Senate. According to a recent news article, the spokesman for the National Association of Broadcasters, Alex Siciliano, is hopeful: “As the vast majority of states have legalized cannabis in some form, today marks a long overdue step toward finally allowing broadcasters to receive equal treatment regarding cannabis advertising that other forms of media have had for years.”
Another news article reports that the proposed federal spending bill, that would seemingly allow broadcasters to accept and air cannabis ads, would prevent the FCC from penalizing broadcasters from running cannabis ads in states where it is legal. Specifically, under the budget bill, the FCC would not be allowed to use any money to deny a license renewal or a station sale application as punishment for airing advertising for cannabis or cannabis-derived products.
What Happens Next?
This new bill, if enacted, would enable broadcasters to take advantage of an estimated $18.4 billion industry in the United States this year. Please note, however, that media outlets not governed by FCC rules and regulations are currently free to accept cannabis ads (only if permitted by state law).
Various state broadcast associations have worked together to create the Safe Advertising Coalition (the “SAC”), a group that is lobbying for clear federal protection for broadcasters to air cannabis ads. The SAC has applauded the House Appropriation Committee’s approval of the bill and is working toward obtaining full congressional approval in the future. If passed, the spending bill would go into effect on October 1, 2022, and would expire after one year.
There seems to be a great deal of confidence in the broadcasting industry that the bill’s approval would permit cannabis ads on radio and T.V. in states that have legalized marijuana use. As always, companies certainly need to consult with an experienced marketing attorney to ensure that their cannabis ads comport with applicable state and federal regulations.
If you are interested in learning more about this topic or require legal assistance in connection with advertising marijuana or cannabis-related products, please e-mail us at: info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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