- Posted by Ryan Reaves
- On August 26, 2017
- assembly, brands, California, call to action, cannabis, commercial cannabis, legislation, marketing, regulation, restrictions, sb162, senate
Legislation That Restricts Cannabis Marketing Edges Closer to Becoming Law
An act to amend Section 26152 of the California Business and Professions Code written by California State Senators Allen(D) and Nielsen(R) is currently in committee after moving from the State Senate to the State Assembly. SB 162 has undergone multiple amendments and inches closer to the Governor’s desk creating some anxiety in the commercial cannabis community. “This bill would specify that advertising or marketing cannabis or cannabis products in a manner intended to encourage persons under 21 years of age to consume cannabis or cannabis products includes all advertising of cannabis or cannabis products through the use of branded merchandise, including, but not limited to, clothing, hats, or other merchandise with the name or logo of the product.” Essentially, this bill would prohibit a licensed cannabis company from selling branded merchandise, which for many in the industry is perceived as an overzealous legislative attack on the marketing capacity of cannabis businesses.
The bill relies heavily on research done by the RAND Drug Policy Research Center yet, does not provide the research data or research methodologies used in the study. The bill states that “research by The RAND Corporation indicates that adolescents who are exposed to advertising of medical cannabis were more likely to report using cannabis or say they planned to use the substance in the future [and] found that a comprehensive ban on advertising through branded merchandise by persons and companies licensed to sell cannabis can be a justified public health approach.” The ambiguity in the language describing the justification for SB 162 makes this bill easy to agree with on the surface however, the details neglect to consider several factors.
The Adult Use of Marijuana Act (AUMA) already places restrictions on cannabis marketing by prohibiting advertising intended to encourage use by individuals under 21. SB 162 goes beyond this restriction by specifically banning any merchandising at all. Although no one would argue the importance of discouraging cannabis use by minors, a bill of this nature seems hypocritical given the present capacity of branded merchandising in the alcohol and soft drink industries (both pose health risks to minors). The bill cites “the federal district court case of Commonwealth Brands Inc. v. U.S. 678 F.Supp.2d 512 [which] determined that the prohibition on branded merchandise was constitutional and narrowly tailored to meet the goal of reducing youth use.” The issue with citing this case as precedent is that it involved tobacco advertising restrictions specifically. Cannabis is not tobacco and does not have the same effects on the body. Additionally, a direct association between tobacco and cannabis flies in the face of emerging medical research and the thousands of individuals 18 to 20 who currently use cannabis medicinally under existing state law.
An analysis of SB 162 by Lauren Mendelsohn and Omar Figueroa identified a particular flaw in this bill, pointing out that “the prohibition on advertising cannabis or cannabis products through branded merchandise would only apply to licensees. This means that someone without a state-issued cannabis license, such as a headshop or unpermitted operator, both of which are more easily accessible by someone under the age of 21, could advertise cannabis products through branded merchandise without repercussion, but someone with a license would be in violation of the law if they did so. This does not seem equitable or in line with the goal of reducing child exposure to branded cannabis merchandise.”
Provided Below is the current amended language of SB 162 as of August 25, 2017:
|26152. A licensee shall not do any of the following:
(a) Advertise or market in a manner that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific, or technical matter, tends to create a misleading impression.
(b) Publish or disseminate advertising or marketing containing any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof.
(c) Publish or disseminate advertising or marketing containing any statement, design, device, or representation which tends to create the impression that the cannabis originated in a particular place or region, unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement.
(d) Advertise or market on a billboard or similar advertising device located on an Interstate Highway or on a State Highway which crosses the California border.
(e) Advertise or market cannabis or cannabis products in a manner intended to encourage persons under 21 years of age to consume cannabis or cannabis products. This prohibition includes all advertising of cannabis or cannabis products through the use of branded merchandise, including, but not limited to, clothing, hats, or other merchandise with the name or logo of the product.
(f) Publish or disseminate advertising or marketing that is attractive to children.
(g) Advertise or market cannabis or cannabis products on an advertising sign within 1,000 feet of a day care center, school providing instruction in kindergarten or any grades 1 through 12, playground, or youth center.
SB 162 has already been amended in both the State Senate and Assembly and is nearing closer to becoming law. Please contact your local state assembly member and tell them to vote “NO” on SB 162 unless further amended. The current version of this bill places unfair restrictions on the capacity for commercial cannabis companies to grow their brands while creating loopholes for non-licensed entities to merchandise without similar restrictions.
Ryan Reaves is a policy analyst at CannaBusiness Law and Master of Public Policy candidate at Mills College in Oakland, California.