Broadcasters have been notorious for their refusal to air cannabis ads. Even in states where the product is legal, advertisers found themselves being turned down as the Federal Communication Commission (FCC) took the stance that a federally illegal product could not be advertised.
Law360 reported that “House lawmakers tacked language onto a Federal Communication Commission spending bill for next year to block the FCC from trying to prevent broadcasters from running ads for cannabis products in states with legalized marijuana.” Editor & Publisher Magazine reported, “Under the language, the FCC could not use any of the funds appropriated to the agency for the fiscal year that starts Oct. 1 to deny broadcasters a license renewal or station sale application, or require an early license renewal application to be filed, in reaction to a station’s taking cannabis ads in legal jurisdictions.”
According to the National Association of Broadcasters, the House Appropriations Committee advanced the FY 2023 Financial Services and General Government appropriations bill which included language that would prevent the FCC from taking administrative action against broadcasters that accept cannabis advertisements consistent with the law of the state or jurisdiction in which the station is licensed.
NAB spokesman Alex Siciliano said, “We are pleased to see that this bipartisan language has advanced in the House today. As the vast majority of states have legalized cannabis in some form, today marks a long overdue step toward finally allowing broadcasters to receive equal treatment regarding cannabis advertising that other forms of media have had for years. While we welcome today’s progress, local broadcasters will continue to work with all policymakers towards a broader resolution of this competitive disparity and in support of our unique service to local communities.”
2023 House Bill
The 2023 House bill that covers financial services and general government spending cleared the full Appropriations Committee last Friday. Law360 wrote, “Appropriators in the House hope to see the mandate on the FCC attached as a policy rider to a $390 million operating budget for the fiscal year starting in October, which would also raise the agency’s budget by $8 million over this year. The FCC has asked for a $16 million boost.”
Cannabis companies typically advertise on billboards, print media, some social media (depending on the company and platform) and cable or internet streaming channels. However local television and radio companies have been prevented from running these ads. Cannabis advertising is projected to total $18.5 billion in the U.S. this year.
The New York State Broadcasters Association President David Donovan said, “We are grateful to House Appropriations Committee Chairwoman Rosa DeLauro, Subcommittee Chairman Mike Quigley and members of the Committee for recognizing the unfairness of the present situation with respect to cannabis advertising. The provision in this House appropriations bill is a major step forward for leveling the playing field for local broadcasters. We believe the law of the state in which a station is licensed should determine whether a station can accept cannabis advertising if they so choose. We look forward to working with members of Congress and the Administration to help restore parity between local broadcasters and other media outlets.”
He added, “We believe the law of the state in which a station is licensed should determine whether a station can accept cannabis advertising if they so choose. We look forward to working with members of Congress and the Administration to help restore parity between local broadcasters and other media outlets.”
Just the First Step
While the move is seen as a positive one, it must still pass through the U.S. House of Representatives. The bill will then move to the House floor for consideration in July and then goes on to the Senate. The NYSBA said that the Senate poses additional problems, not just for its language but the entire appropriations process. “The appropriations process is notoriously complex, which means the bill may get stalled. Congress is likely to adopt an interim budget through a continuing resolution. At some point, perhaps after the mid-term elections, there will be a final vote. Even if it passes, the legislation is not a “silver bullet.” This is because appropriations bills apply for a one-year period and would only last for FY 2023, which is scheduled to begin on October 1, 2022, and run through September 30, 2023. It would have to be renewed next year for FY 2024 and every year thereafter. As a practical matter, once it is included, it is like to be renewed every year.”