NYSBA Files Opposing the 90% Audience Composition Rule and Excessive Warning Labels for Cannabis Advertisements

In June, the New York Office of Cannabis Management (NYOCM) proposed rules to govern advertising for recreational cannabis use in New York. Although these regulations apply to the cannabis business, they can affect placing ads on TV and radio stations. Thus, we are concerned with several aspects of the new rules.

First, the proposal would require the placement of advertisements only where 90% of the audience is 21 years or older. This is overly restrictive and well above the current test used for alcohol (71.6% for distilled spirits and 73.6% for beer). Most states adopting a standard require that 70% of the audience be 21 years of age or older. A 90% rule would prevent cannabis advertisers from reaching a large portion of the adult audience. As a result, we requested that the NYOCM use the same standard that is now applied to alcohol.

Second, the proposed rules require that cannabis businesses present reliable data that the advertisements will be placed only in programs that meet the audience placement rule. Since a number of stations and markets may lack access to reportable data, we requested that the NYOCM adopt a flexible approach to this requirement. Stations should be allowed to use aggregate national or statewide data. Moreover, a cannabis business should be allowed to obtain a letter from a station stating that the advertisement was placed in a program that reasonably meets these requirements. We want to make sure that stations in small markets and those who do not subscribe to expensive rating services have a process to accept cannabis advertising.

Finally, the proposed rules require extensive labeling. The proposed labels may require more than 70 words, making it impossible to run a 15 or 30-second radio spot. The labels would even render a 60-second spot ineffective. In addition, the graphic may undermine the effectiveness of television advertisements. We urged the NYOCM to adopt shorter labels that can appear on a rotating basis. We also suggested that a label simply reference the NYOCM website, where information on all the warning labels could be accessed.

The proposed regulations overreach. 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 as cannabis remains illegal under federal law. Nonetheless, assuming there will be a change in federal law at some point, we do not want to undermine advertising on broadcast stations because of overly restrictive New York regulations. We expect new rules to be published in the fall.

You can access NYSBA’s comments here.

You can see the proposed rules here.

 

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