Looking at the news coming out of the Massachusetts CCC at the moment I’d suggest their over entusiastic approach to compliance so soon after getting a new person in the chair is not going to serve them well after the prior administrations served the sector and the state so badly.
It might have been better to start with a more softly softly approach to bring everybody onside.
If law firms are writing up articles this quickly I’d suggest things aren’t going to be conducive to a good relationship between the CCC and those they supposedly serve…
Here’s the Foley Hoag piece authored by partner Jesse Alderman.
On May 21, the Cannabis Control Commission quietly published a bulletin on its website that will immediately impact retailers already struggling to maintain footing in the competitive Massachusetts market. The bulletin, which was emailed on May 29, states that adult-use marijuana establishments that are posting “reduced or promotional pricing offered on their in-store and online menus” or using “terms including, but not limited to “sale,” “discount,” “purchase program,” “xx% off,” [or] showing strike-throughs of higher prices next to lower prices” on online menus are violating regulations regarding prohibited advertising practices at 935 CMR 500.105(4)(b)20. Note that these advertising restrictions do not apply to medical marijuana treatment centers or co-located marijuana operators communicating with medical patients.
As a reminder, CCC regulations define “advertising” as “a form of marketing communication that employs a sponsored, non-personal message to sell or promote a Marijuana Establishment’s/Marijuana Treatment Center’s (“MTC”) Brand Name, Marijuana Establishment/MTC Branded Good, service, product or idea.”
Most retailers currently post updated pricing (including price drops or other promotions) on their websites in reliance on the CCC’s longstanding interpretation that communicating such pricing and promotional information is permitted when conveyed to a consumer inside the dispensary or through an opt-in email or text newsletter under which a consumer can click to opt out.
The CCC’s new bulletin attempts to draw a distinction between a consumer in the store where the pricing communication is “personalized,” versus a website where the CCC deems that communication as a “ broadcast to attract a larger audience” and thus, “non-personal.” The CCC draws a distinction between websites and opt-in newsletters based on the fact that a consumer cannot opt out of viewing a website promotion, even when the consumer must click through an age gate as required by regulations.
Regardless of the merit of the CCC’s new interpretation of 935 CMR 500.105(4)(b)20, retailers should be mindful of the new bulletin. Please reach out to a Foley Hoag regulatory specialist with any questions.
THE BULLETIN
To: Marijuana Establishments
From: Investigations and Enforcement Department
Date: May 21, 2024
Subject: Bulletin – Advertising Activities
This Bulletin applies to all Marijuana Establishments (collectively, “Licensees”). The Cannabis Control Commission (“Commission”) has learned that some licensed adult-use Marijuana Establishments have been actively marketing discounts, sales, promotions and other reduced-price Marijuana and Marijuana Products on their own websites or through the websites of other third parties. The Commission has also received inquiries from Licensees regarding what the Commission considers to be permitted advertising practices versus prohibited advertising practices regarding discounts, sales, promotions and other reduced-priced Marijuana and Marijuana Products being offered for retail sale to consumers.
This Bulletin serves to clarify Licensees’ statutory and regulatory obligations under state Marijuana laws. See G.L. c. 94G, G.L. c. 94I, 935 CMR 500.00 et. al., and 935 CMR 501.000 et. al. Licensees must ensure that all advertising and marketing practices taken by, or on behalf of the Licensee by a third-party, comply with 935 CMR 500.105(4). Please note that this bulletin is not legal advice, nor is the Commission able to advise a Marijuana Establishment regarding its compliance obligations. To the extent a Marijuana Establishment has additional questions regarding its legal obligations, it should consult with private counsel.
Advertising means a form of marketing communication that employs a sponsored, non-personal message to sell or promote a Marijuana Establishment’s/Marijuana Treatment Center’s (“MTC”) Brand Name, Marijuana Establishment/MTC Branded Good, service, product or idea.
Colocated Marijuana Operations (CMO) means an MTC operating under a License pursuant to 935 CMR 501.000: Medical Use of Marijuana and a Marijuana Establishment operating under at least one License pursuant to 935 CMR 500.000 on the same Premises.
935 CMR 500.105(4)(b)20. prohibits the following advertising activities:
- Advertising through the marketing of free promotional items including, but not limited to, gifts, giveaways, discounts, points-based reward systems, customer loyalty programs, coupons, and “free” or “donated” Marijuana, except as otherwise permitted by 935 CMR 500.105(4)(a)9. and except for the provision of Brand Name take-away bags by a Marijuana Establishment for the benefit of customers after a retail purchase is completed.
An Advertisement is a communication that is broadcast widely and used to attract customers or build brand loyalty and may be sponsored by the Licensee itself or by a third-party on behalf of the Licensee. Advertising is not communication or information requested by the Consumer and does not allow for a Consumer to opt out of receiving that information. A non-personal message is a communication that occurs without personal contact or feedback from the recipient of that communication.
If a Consumer specifically requests to receive information from a Licensee or is provided information personally after entering an ME, then those communications are a personalized message rather than as “Advertising” as defined in Commission regulations. For example, if a Consumer entered an ME and the budtender directly tells the Consumer about a special being offered by the ME that day, that is a personal communication. This is because the message is being directed specifically to that individual Consumer and is not broadcast to attract a larger audience. Communications that may be accessed or delivered to a broad audience, such as through an ME’s website, are not personal. Minimal interaction by the Consumer, such as verifying that they are over 21 years old via a website’s age gate in accordance with Commission regulations, does not make the communication personalized.
Pursuant to 935 CMR 500.105(4)(b)20., Marijuana Establishments are prohibited from Advertising—which may include but not be limited to advertising via third-parties or through an ME’s website or social media— “gifts, giveaways, discounts, points-based reward systems, customer loyalty programs, coupons, and ‘free’ or ‘donated’ Marijuana.” This includes broadcasting a reduced or promotional pricing offered on their in-store and online menus as well as the use of terms including, but not limited to “sale”, “discount”, “purchase program”, “xx% off”, and showing strike-throughs of higher prices next to lower prices.
The medical regulations, 935 CMR 501.000 et. all, do not prohibit Medical Marijuana Treatment Centers from Advertising discounts, sales, coupons or other price reductions for medical Marijuana and Marijuana Products offered to Patients for sale. Similarly, CMOs are not prohibited from Advertising discounts, sales, etc. for medical Marijuana and Marijuana Products offered to Patients for retail sale. However, CMOs must take necessary steps to ensure that any advertised or marketed discount, sale or other reduction in price is clearly indicated as being only applicable to medical Marijuana and Marijuana Products intended for retail sale to Patients and not being offered for adult-use Consumers.
Violations of state Marijuana law such as, engaging in prohibited advertising activities, may result in the issuance of fines or up to suspension or revocation of a License. See 935 CMR 500.450(3), (13) and 501.450(3), (13).
