Looking at Legislative Proposals that Would Allow Broadcasters to Accept Marijuana Advertising

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.

The bill, once adopted, would recognize state actions legalizing marijuana and the regulations on the distribution and use of marijuana in each state (including any state-imposed advertising restrictions).  The bill would also impose federal controls in many areas.  Among those areas is advertising – where the FDA would be directed to adopt rules limiting advertising in many ways, including restricting ads pitching cannabis products to those under 21, requiring that ads be truthful, and making other disclosures about the sale of these products.  Any such rules would take time to be drafted, released for public comment, and then adopted, so the effect of the bill’s adoption might not be immediate.

Just this week, another bill, the Secure and Fair Enforcement Advertising Act, was introduced in the Senate.  This bill would allow the advertising of marijuana in states where it has been legalized and would restrict the FCC from taking any action against a broadcaster who carries ads for legal marijuana businesses in the state in which the station operates.  It would also block any federal criminal actions against broadcasters who accept such advertising.  While this bill offers the most direct approach to the problem, it also has no co-sponsors listed.  With the congressional summer recess soon upon us, an upcoming election in November, and many other legislative priorities, this stand-alone bill is perhaps even further from becoming a reality than any of the other potential actions.

The third bill that might ease the concerns of broadcasters that want to carry marijuana ads is the one that is the least direct, in that it does not remove any legal prohibitions on the airing of such ads.  Instead, the bill is a Congressional authorization for government spending which includes a provision prohibiting the FCC from spending any money to take any action against a station running marijuana advertising in a state where the business is legal.  In budget bills for almost the last decade, similar restrictions have been placed on the Department of Justice and federal prosecutors – prohibiting them from spending money to prosecute medical marijuana businesses that are legal under state laws, but still prohibited under federal law.  We even wrote about a case where a court prohibited a marijuana prosecution because of that rider limiting DOJ spending.

But, as we noted in the article, the current budget riders against DOJ prosecutions, and the proposed rider against FCC actions, do not make the underlying actions legal – they simply prohibit prosecution for the year that the budget to which these provisions have been attached is effective.  In the criminal case, because the activity itself would remain illegal under federal law, the court that dismissed the prosecution warned that, were the rider not included in future appropriation bills, prosecutions could again proceed.  In the budget bill, that same risk would attach to any limits on FCC actions.  The activity that took place while the rider was in effect could be prosecuted if the rider ever expired, assuming no statute of limitations applied.

What the budget bill rider would do is allow broadcasters to take the risk that the rider will continue to be enacted in future years, just as the rider against DOJ prosecutions has been re-adopted each year for many years.  It would essentially put broadcasters in the same position as newspapers or other businesses who now promote medical marijuana sales, under the assumption that the ban on DOJ spending funds to prosecute such activity will remain in place past the current budgetary period.  It would not bring final approval for such advertising but would allow a broadcaster to act now knowing that the FCC would not be able to take immediate action, and betting on future sessions of Congress to keep the rider in place.

Even the budget rider, while it has passed the House, has not yet been included in any Senate budget bill.  And if the Senate bill does not match the one passed by the House, the rider would be subject to further review during the process of reconciliation of the two bills.  While still a long way from enactment, this bill would nevertheless seem to have the best prospect of passing before a new Congress in January would start anew with new legislation, as the budget bill is considered must-pass legislation to keep the federal government operating.

So watch as these bills progress to see if there will be any change in concerns about on-air marijuana advertising in the coming months.

David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access). There are no additional costs for the call; the advice is free as part of your MAB membership.