David Oxenford Partner at Wilkinson Barker Knauer, LLP writes at LexBlog..

Last week, there was much written in the press about the MORE Act passing in the House of Representatives, taking actions to decriminalize marijuana under federal law.  This would include removing marijuana from Schedule I, which is the list of drugs whose use for almost all purposes is prohibited in the United States.  The passage of this bill through the House, though, should not be taken as a sign to start running marijuana advertising on your broadcast station – though there are some signs that the day on which that advertising can be run may be in sight.

First, it is important to remember that this bill passed only in the House of Representatives.  Without also being approved by the Senate and being signed by the President, the House’s action had no legal effect.  Because of the way that Congress works, if the bill does not pass the Senate in the current legislative session, which ends in the first few days of January 2021, the whole process must start over again – bills do not carry over from one Congressional session to another.  So, to become law in the new year, a new Congress would have to start with a new bill, and a new House of Representatives and a new Senate would both have to vote to adopt the legislation.

Press reports have indicated that the Senate is unlikely to pass this legislation before the session ends, so marijuana will remain forbidden under federal law, no matter what individual states may say.  As we have written before many times (see for instance our articles here and here), as a federal licensee, broadcasters run a real risk in running marijuana advertising even if they operate in a state that has legalized its use.  The FCC, being a federal agency which enforces federal law, could be forced to take actions against a licensee for running this advertising if a complaint is filed against a station running such ads – including during the ongoing license renewal process.  In addition, there are still federal criminal penalties for promoting Schedule 1 drugs, including a specific prohibition against using radio waves to promote its sale and distribution.  But does that House action signal movement in the future?

For years, we have seen the entire Congress include language in budget bills restricting the use of federal funds to prosecute entities that sell medical marijuana in states where that sale has been legalized.  As we noted here, that permission has been limited to medical marijuana, and it only applies for the year for which the budget bill provides federal spending authorization.  In dismissing cases brought by federal authorities during the term of one such spending limitation, a court specifically noted that the budget provisions do not legalize the underlying conduct, they just don’t allow funds to be spent to prosecute the activity that is still a crime under federal law.  These budget provisions do not limit an agency like the FCC from spending its funds on regulatory matters relating to marijuana, so a broadcaster cannot take comfort from these limitations on spending.

These limitations on spending, which have consistently been approved by Congress for many years, along with the House action on the MORE Act, could signal a new willingness by some in Congress to revisit the criminalization of marijuana under federal law.  In recent years, including in the November election, some state laws have been changed to legalize recreational marijuana, with many states legalizing medical marijuana use, including in states that most would consider as being “conservative.”  We are also looking at a Democratic administration taking office in January.  In the last Democratic administration, the Department of Justice issued prosecutorial guidelines that limited federal actions against banks who processed funds from cannabis-related businesses that were legal in the states in which they operated, as long as those businesses met some federal guidelines to prevent specific harms (see our article here).  Some had viewed this hands-off approach as one that should be applied to the broadcast industry, though the last FCC did not take a similar action.

But, with a new administration and a new Congress in 2021, and a different regulatory status in many states across the country, one can see that there has been a general shift in the regulatory climate surrounding marijuana legalization.  That shift could well lead to further rule changes in the near term.  Until then, broadcasters should act with caution, but should stay alert to see how future regulatory actions play out.