Because it is still a federal crime to promote the sale of a controlled substance, and your license is doled out by the federal government, radio station owners have been reluctant to take ads promoting legal marijuana sales. The legal advice up to now has been that it could become an issue at license renewal time so don’t risk it.
It was a topic of conversation at Radio Ink’s Hispanic Radio Conference in Miami last week with broadcast attorney Frank Montero sticking to his advice of playing it safe rather than putting your license at risk.
Radio could use a jolt of revenue from a new category, as it has from sports betting as that becomes legal in more states around the country. Cannabis revenue is flowing nicely on cable TV, satellite, the Internet, in print and magazines, on billboards and social media platforms. They are all free to accept and transmit these advertisements while radio and TV stations sit on the sidelines in fear of what the government will do to them.
On Friday, 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.
We asked Montero to give us his thoughts on that bill and what it means for broadcasters now. ” First, it is still only a bill so I would advise broadcasters to still not take cannabis ads. But once the Appropriations Bill becomes law, then what? The answer to that question is still slightly complicated. I would say that broadcasters would then be safe from FCC action for one year as a result of the Appropriations Bill provision. However, remember that this appropriations is only good for one year. Also, it is not clear to me that the Appropriations Bill provision, if enacted, would clear broadcasters or anyone else from aspects of the Federal Controlled Substances Act that make it illegal to promote the sale of a controlled substance. However, it seems unlikely that other branches of the US Government (DEA or Dept of Justice) would go after broadcasters for running ads under the Controlled Substances Act if the FCC was not allowed to enforce the provision. So in that case, it would be safer for broadcasters to take the ads and it would put broadcasters on a more-equal footing with, say, billboards, websites, or newspapers.
The NAB also chimed in on the Bill. “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.”
New York States Broadcasters Association President David Donovan also cheered the Bill. “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.”