On Friday, one of Portland’s best ad agencies, Sockeye, launched a video advertising campaign for a marijuana beverage. The beverage is called “Legal,” manufactured by one of our long-time clients, Mirth Provisions. While we seldom blog about clients, the catchy ad (which quickly rang up over 7,000 views) got people talking about the nexus between pot and advertising. Among these discussions were write-ups in The Oregonian and the The Portland Mercury. The latter story asserts that the Legal spot is the first ever commercial for a cannabis edible.
We have examined the challenges for industry entrepreneurs when it comes to marijuana advertising, including one year ago today, when we wrote about the ever first television commercial for a cannabis product. That commercial was scheduled for broadcast on a Denver-based ABC affiliate, but pulled at the last second. To our knowledge, it has never graced the airwaves. In the relevant blog post, we explained that:
The Federal Communications Commission regulates and licenses television broadcasters, issuing licenses on an annual basis. There is no FCC regulation expressly prohibiting a televised advertisement of cannabis products in states with legalized cannabis. The FCC, however, renews broadcasters’ licenses each year based, in part, on whether they served the “public interest” during the preceding year. It could be more difficult to satisfy this criterion if broadcasters (arguably) committed a felony by violating Section 843 of the Controlled Substances Act.
At the time, the FCC had not weighed in on cannabis. For better or worse, that is still the case today. Without guidance, broadcasters can only guess as to how interested regulators will be in these ads – even if states like Colorado and Oregon do not prohibit them. Perhaps for this reason, the Legal ad is currently published only on Youtube, and it has not run on any traditional television channels.
In Oregon, advertising for marijuana falls under Oregon Liquor Control Commission (OLCC) purview. As such, OAR 845-025-8040 (“Advertising Restrictions”) gives some basic parameters as to what pot ads cannot do, including: contain misleading statements; target minors or use cartoonish images; encourage transport across state lines; make claims as to health effects; display consumption of marijuana items; etc. All of these are similar to advertising strictures for alcohol and tobacco, although the “display consumption” prohibition goes further than regulation for alcohol ads.
The following section, OAR 845-025-8060(2) also provides that a “licensee may not utilize television, radio, billboards, print media or internet advertising unless the licensee has reliable evidence that no more than 30 percent of the audience … is reasonably expected to be under the age of 21.” How the 30% metric is gauged is an open question, and it is only a matter of time before someone trips on this rule and we see a little action. It is also interesting to note that the term “television” includes “any video programming downloaded or streamed via the internet.” 845-025-8020(5). Obviously, this definition is very broad.
Today in Oregon, marijuana billboards and print media abound (especially in the City of Portland), but traditional television and radio ads are scarce or non-existent. Given the nature of FCC regulation, we are not surprised at this dynamic. Still, given the OLCC rules cited above, alongside the fact that the Oregon state constitution has unusually broad protections for speech (including commercial speech), we also expect to see the status quo challenged. Pot entrepreneurs are a fearless lot, and they will begin to push the envelope in different directions.
As they say in the world of television, stay tuned.