Source JD SUPRA
https://www.jdsupra.com/legalnews/new-york-improves-cannabis-advertising-8123057/
New York’s Cannabis Control Board (“CCB”) proposed amendments to cannabis advertising and marketing rules and regulations. If approved, these new rules and regulations could expand the way cannabis dispensaries use advertising and marketing to brand themselves in hopes of standing out amongst the crowd.
These proposed amendments would help cannabis dispensaries stand out through branding, as they would allow cannabis dispensaries to advertise more widely using (1) billboards, (2) discounts and (3) free merchandise.
Marketing Through Billboard Advertisements
Cannabis dispensaries would be able to advertise their business on up to three billboards, provided that the billboards are used for the limited purpose of alerting individuals to the name and location of the dispensary.
Billboards can only display:
- The licensee’s name, entity name, or doing business as name.
- The dispensary address, phone number, e-mail address, and website URL.
- Directions to the business.
- The licensed activity (i.e., dispensing).
Billboard advertisements:
- Cannot attract individuals who are under the age of 21;
- Cannot be present on vehicles except for the licensee’s vehicles
- Must comply with all federal, state, and local rules and regulations; and
- Must be affixed to the licensed physical brick-and-mortar store.
- If not affixed to the brick-and-mortar store, billboards are limited to three (3) in number, and may not be within or readily observed within five hundred feet of the perimeter of a school, playground, child day care provider, public park, or library.
Marketing Using Discounts
These new amendments would also allow for the advertisement of discounts. A licensee may advertise price reductions or any other discount, coupons, points-based rewards systems, customer loyalty programs, or ‘buy-one-get-one’ offers provided that:
- Offers do not result in the sale of cannabis products below market value or subvert state and local tax collections;
- If not within licensed or permitted premises, the advertising or advertisement of such offers has an intended audience of adults 21 years of age and over, and
- The advertisement of such an offer is not adhered to or affixed to a cannabis product package or label.
Marketing through Free Cannabis Merchandise
Cannabis dispensaries would also be able to advertise using free merchandise, such as T-shirts and hats. Cannabis dispensaries can give away free merchandise so long as it does not result in providing said merchandise to an individual who is younger than 21 years of age.
Other Amendments
Other amendments the CCB proposed include removing the requirement that a cannabis dispensary have reliable evidence that at least 90 percent of its advertising audience is 21 years or older.
If the proposed amendment is accepted, the advertising audience would need to be “comprised of a proportion of individuals age 21 and older that meets or exceeds the proportion of the state’s population that is 21 and older based upon the most recently available data from the U.S. Census Bureau’s Annual Estimates of the Resident Population.”
Regulatory Timeline
Although these marketing and advertising amendments have been proposed, they have not been approved. For the amendments to be approved, the CCB must approve these rules for posting for public comment in the New York Register. Once posted in the New York Register, the agency must allow a 60-day comment period.
After the agency reviews public comment, it either adopts, revises or withdraws the proposed rule. If the agency wishes to make substantial changes to the proposed rules, it must publish those changes in the register again and allow for a 45-day period for additional comments.
Despite these amendments not being passed yet, cannabis dispensaries should consider how they would use these amendments to their advantage when creating advertisement and marketing plans. Branding through advertisements is a main contributor to having a loyal customer base in a state with an ever-increasing number of cannabis dispensaries.
Foley Hoag summer associate Isabel Celio contributed to this blog post.
