Reefer Madness II: Update on "Joint" Sales Advertising

Is the pipe dream of marijuana advertising going up in smoke?

What’s up with broadcast advertising of medical marijuana? 

It’s been two years since the Department of Justice hinted that maybe, just maybe, the federal government might go easy on fiendish pushers of the evil weed, er, we mean legitimate businesspersons seeking to provide dope to patients with legitimate prescriptions for the stuff. State laws permitting use of the drug for medical treatments opened the door to this particular area of commerce. But those state laws also created a conundrum, particularly for federally-licensed broadcasters: if marijuana trafficking is illegal under federal laws but legal under state laws, should a broadcaster accept advertising for grass?

We previously expressed caution on that front. Events this year indicate that any thoughts of a federal retreat in the War on Drugs were but a pipe dream.

Readers may recall our last piece on the subject. Back in October, 2009, the Department of Justice had issued a letter suggesting that the Obama Administration was inclined not to come down too hard on the use of medical marijuana in states where such use had been legalized. The letter did not address the issue of broadcast advertising. It did acknowledge that, as a practical matter, there are probably better ways for the government to use its prosecutorial resources than beating up on patients legitimately availing themselves of medical treatments permitted by their state laws. If a particular situation involved dope use which was in “clear and unambiguous compliance” with state law, the letter seemed to say that federal prosecutors could properly look the other way.

While the October, 2009, letter was pretty limited, it at least hinted at some possible federal leniency when it came to grass use in states where such use was permitted. This of course gave rise to the notion that the feds might not mind if the sale of medical marijuana were to be advertised on radio and TV. After all, didn’t we learn from our experience with lottery advertising that stuff that’s legal locally can be advertised locally? (Actually, that wasn’t exactly the lesson of the lottery experience, but it’s close enough.)

But since the 2009 DOJ letter, the FCC has been mum on the topic of marijuana advertising. That’s not an encouraging sign. The Commission has historically been down on drugs generally, of course, and without some clear prodding by DOJ, it’s unlikely that the FCC would opt on its own to loosen things up.

What’s worse, this year the DOJ has issued a number of items emphasizing the narrowness of the October, 2009 letter. In an April notice (issued in Washington State), a May letter (issued in Arizona), and a June notice (issued in Oregon), various U.S. Attorneys have made clear that the U.S. Government still views marijuana as a serious threat that is not to be encouraged. And hammering that point home is a June decision of the Drug Enforcement Administration (a division of the DOJ), published in the Federal Register in July, refusing even to think about “rescheduling” marijuana. 

(“Rescheduling” would have relaxed federal controls over grass. Why did DEA decline the opportunity? As DEA sees it, marijuana: (a) has a “high [editor’s note: unclear whether the pun is intended] potential for abuse”; (b) has “no currently accepted medical use”; and (c) “lacks accepted safety for use under medical supervision”. Does that sound like DEA (or DOJ) resistance to dope might be cracking [editor’s note: pun intended]? We didn’t think so either.)

Most recently, four U.S. Attorneys in California took a series of coordinated actions directed against “illegal operations of the commercial marijuana industry”. The aggressive approach included arrests of some (supposed) Bad Guys, obviously, but it also targeted (with civil forfeiture proceedings and stern warning letters) owners and lienholders of properties where illegal marijuana sales are taking place. 

Broadcasters take note: the Feds aren’t going against just the marijuana marketers, but also third parties – like the folks who own the buildings where the marketers have set up shop – who may or may not be directly involved in the business, but who facilitate it nonetheless. That universe of third parties hasn’t yet expanded to reach broadcasters who accept marijuana advertising – but as far we know, neither DOJ nor the FCC has said or done anything to take that option off the table.

As best we can tell, DOJ is concerned that even well-intended, medically-limited permissiveness toward marijuana use has led to burgeoning secondary industries. Vast grass farms, rampant marijuana stores and other such broadly commercial operations have emerged in the wake of ostensibly narrow state laws permitting limited use of the drug by patients under the care of medical professionals. 

DOJ seems to be figuring that, unless it starts rattling its saber really hard, the supposedly small medical marijuana exception will effectively open the floodgates to widespread dope dealing. That’s understandable, particularly in light of the way that marijuana shops have sprouted like, um, weeds in California.

Where does this leave broadcast advertising of marijuana? Caution remains the watchword – far more so now than was the case in 2009. The Feds are clearly concerned about large dope distributors (although, if those distributors are legitimately dealing only to patients with bona fide prescriptions for the stuff, why should a distributor’s size make a difference?).  Which drug sellers are most likely to want to buy advertising time? Our guess is those same large distributors. This isn’t to say that any prospective grass advertiser would necessarily be a target of federal interest. But it’s probably a good bet.

Of course, the FCC still hasn’t weighed in on the issue, so you can’t say with absolute certainty whether it might be inclined to wield its enforcement power in this area. But with broadcasters in the middle of a license renewal cycle, is that a chance you want to take?

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