Annie Seminara
This year, New York legalized recreational marijuana use, becoming the 15th state to do so.[1] What does this mean for broadcast and streaming advertisements? How soon can we expect ads for marijuana retailers to punctuate our cable news segments or periodically interrupt that series we are binge-watching on Hulu (because we REFUSE to pay the extra $6.99/month for Hulu No Ads)?
Well, the less-than-thrilling answer is not very soon. Right now, a chasm separates federal cannabis law and New York State cannabis law. Under the federal Controlled Substances Act (“CSA”), marijuana is a Schedule I controlled substance. 21 U.S.C. § 812(c)(C). A Schedule I controlled substance is a substance that “has a high potential for abuse… has no currently accepted medical use in treatment in the United States [and for which] there is a lack of accepted safety for use… under medical supervision.” 21 U.S.C. § 812(b)(1).
Meanwhile, marijuana is not a controlled substance under New York State law. N.Y. Pub. Health Law § 3306 (Consol. 2021). New York lawmakers seem to have adopted a less foreboding view of marijuana than Congress did when they passed the CSA. In March, 2021, the Marijuana Regulation and Taxation Act (“MRTA”) legalized adult recreational marijuana use for those twenty-one years of age or older, expanded access to medical marijuana, and established a system for licensing marijuana producers, distributors, and retailers in New York State.[2]
This disparity makes it difficult for broadcast and streaming media to air cannabis-related ads. Commercial broadcasters are licensed by the Federal Communications Commission (“FCC”), which makes it risky for them to air ads related to a federally prohibited substance.[3] While the FCC does not regulate streaming services like Hulu, these platforms also increase their litigation risk by airing cannabis-related ads.[4] Both the Federal Drug Administration (“FDA”) and the Federal Trade Commission (“FTC”) regulate drug marketing, working together to prohibit deceptive health and fitness claims in ads and product labels.[5]
Both agencies have recently issued warning letters to entities marketing cannabis-related products. Since 2015, the FDA has sent warning letters to at least fifty-four CBD-related entities noting multiple Food, Drug, and Cosmetic Act (“FD&C”) violations in each case.[6] Entities were notified that products listed for sale on their websites were in violation of the FD&C Act for misbranding and for listing dietary supplements, new drugs, or animal drugs not approved by the FDA.[7] Several of the FDA’s warning letters address unverified claims about CBD’s effectiveness against COVID-19 and other ailments. Id. Similarly, in 2019, the FTC sent warning letters to three companies selling “oils, tinctures, capsules, ‘gummies,’ and creams containing cannabidiol (CBD)” for advertising “that its CBD products treat or cure serious diseases and health conditions.”[8]
Even if advertisements do not include false claims, the regulatory framework for marijuana at the New York State level is in its infancy. While applications for hemp-derived CBD retail licenses and distributor permits have been available in New York since January 2021,[9] the New York Office of Cannabis Management has not yet opened license applications for businesses looking to participate in the adult-use marijuana industry.[10] Since the permit and license application process is new, costly, and time-consuming, it is unlikely that most potential cannabis product advertisers will be licensed and dealing exclusively with products processed and distributed by licensed entities at this time.[11] Additionally, New York State has promised to “promulgate rules and regulations governing the form and content of advertising and marketing of licensed cannabis and any cannabis products or services,” but these rules have yet to be fully fleshed out. NY CLS Cannabis § 86.
For these reasons, broadcast and streaming media have wisely been hesitant to air cannabis-related advertisements. Until federal cannabis law aligns more closely with state cannabis law, and until the cannabis industry is better regulated, ad spots for cannabis products will put the media entities that air them at great risk of litigation. Despite the fact that adult recreational marijuana use is now legal in New York, broadcast and streaming audiences are unlikely to see ads for cannabis and related products interrupting their programs anytime soon.
[1] New York Legalizes Recreational Marijuana, Tying Move to Racial Equity, New York Times (Jul. 13, 2021), https://www.nytimes.com/2021/03/31/nyregion/cuomo-ny-legal-weed.html.
[2] Governor Cuomo Signs Legislation Legalizing Adult-Use Cannabis, Governor.ny.gov (Mar. 31, 2021), https://www.governor.ny.gov/news/governor-cuomo-signs-legislation-legalizing-adult-use-cannabis.
[3] David Oxenford, Looking at “Legal” Marijuana and CBD Advertising – A Presentation on the Issues, Broadcast Law Blog (May. 16, 2019), https://www.broadcastlawblog.com/2019/05/articles/looking-at-legal-marijuana-and-cbd-advertising-a-presentation-on-the-issues/.
[4] FCC Regulatory Free Arena, FCC.gov, https://www.ftc.gov/news-events/media-resources/truth-advertising/health-claims (last visited Nov. 7, 2021).
[5] Health Claims, FTC.gov (Jun. 1, 2018), https://www.fcc.gov/news-events/blog/2018/06/01/fcc-regulatory-free-arena.
[6] FDA, Warning Letters and Test Results for Cannabidiol-Related Products (Mar. 22, 2021), https://www.fda.gov/news-events/public-health-focus/warning-letters-and-test-results-cannabidiol-related-products.
[7] See e.g. FDA, Warning Letter: Cannafyl (Mar. 9, 2021), https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/cannafyl-611957-03012021.
[8] FTC Sends Warning Letters to Companies Advertising Their CBD-Infused Products as Treatments for Serious Diseases, Including Cancer, Alzheimer’s, and Multiple Sclerosis, FTC.gov (Sep. 10, 2019), https://www.ftc.gov/news-events/press-releases/2019/09/ftc-sends-warning-letters-companies-advertising-their-cbd-infused.
[9] New York State Department of Health, Information for Retailers and Distributors (Jan. 2021), https://www.health.ny.gov/regulations/hemp/retailers.htm.
[10] Licensing Overview, Cannabis.NY.gov, https://cannabis.ny.gov/licensing (last visited Nov. 7, 2021).
[11] New York State Business Express, Cannabinoid Hemp Retail License & Distributor Permit, https://www.businessexpress.ny.gov/app/answers/cms/a_id/3813 (last visited Nov. 7, 2021).