Proposed NY Cannabis Ad Rules Could Prevent Advertising

The New York Office of Cannabis management issued proposed rules that would govern advertising for recreational cannabis use in New York. The public has 60 days to comment on the rules. The proposed regulations make it clear that advertising content should not be directed at anyone under 21 years of age. There are two aspects to the rules that cause us significant concern.

First, the proposal would require the placement of advertisements only where 90% of the audience is 21 years or older. According to the rule:

“A licensee shall only advertise cannabis products, cannabis paraphernalia, or goods or services related to cannabis or cannabis products by means of television, radio, print, internet, mobile applications, social media, other electronic communication, or print publication if the licensee has reliable evidence that at least 90%, unless otherwise determined by the Office, of the audience for the advertisement is reasonably expected to be twenty-one years of age or older. The burden of proof of the audience composition lies with the licensee.”

This could effectively ban cannabis advertising on most radio and television stations. It is likely that nearly all television programs, regardless of the daypart, have more than 10% of the audience comprised of people under 21. Apart from news talk or religious formats, this would ban cannabis advertising from most radio formats. The legislation established by the Office of Cannabis Management did not contain a 90% placement rule. Accordingly, the OCM has the flexibility to adopt a less onerous rule.

For years, broadcasters have been protecting minors through self-imposed limits on alcohol advertising. Stations do not broadcast alcohol advertisements in programs where 71.6% of the audience is 21 or younger. We believe this standard should apply the cannabis advertising.

A second concern involves labeling. We do not object to warning labels per se. Nonetheless, the proposed rules appear to require multiple lengthy warning labels. While these labels may work for video as text, they are problematic for radio stations. The required information contained in the proposed labels may exceed the typical 15 or 30-second radio spot.

These proposed regulations overreach. The fundamental goal of the legislation is to establish a legal cannabis market and advertising is the key to developing such a marketplace. While we want to protect minors, New York does not want to enact advertising rules that prevent licensed cannabis dispensaries from succeeding.

Of course, stations run a significant risk to their FCC license for running any cannabis advertisement since cannabis remains illegal under federal law. Nonetheless, assuming there will be a change in federal law at some point, the New York state advertising rules are important.

NYSBA will be participating in this proceeding. Click here to see the proposed advertising regulations.