States-First Approach to Cannabis Legalization Brings Interstate Conflict of Laws

Originally published at the JD Supra Platform


Cozen O'Connor

Some cannabis companies are facing unanticipated headwinds as a result of the emerging patchwork of state cannabis regulations—including unwanted attention from state attorneys general.  Connecticut, for example, has long been home to billboards advertising Massachusetts cannabis retailers since Massachusetts legalized cannabis in 2016.  However, with the July 1, 2021 enactment of Connecticut’s new cannabis law, Connecticut Attorney General William Tong has demanded that the billboards be removed for violating the law’s marketing restrictions.  Connecticut’s law prohibits cannabis retailers from “[engaging] in advertising by means of television, radio, Internet, mobile applications, social media, or other electronic communication, billboard or other outdoor signage, or print publication unless the advertiser has reliable evidence that at least ninety percent of the audience for the advertisement is reasonably expected to be twenty-one years of age or older.”  By comparison, Massachusetts’ law requires evidence that at least eighty-five percent of the audience for the advertisement is age 21 or older.

The advertising agencies involved in posting the billboards claim that they have thoroughly vetted the locations of the billboards to ensure that they comply with audience requirements, although AG Tong has stated, “I don’t think that the billboard companies can establish that they’re in compliance with the standard… I think common sense tells you that they can’t make that showing. And that’s why I think they need to take them down.”  AG Tong is currently engaging both the advertising agencies and the cannabis retailers themselves in an effort to find a solution; however, he is prepared to litigate the issue, or even go to the legislature to amend the law.

As more states move to legalize cannabis,  retailers need to be mindful of the ever-changing legal landscape in their neighboring states to ensure that they are in compliance with new laws and regulations.  Frequent compliance reviews of a company’s consumer-facing materials, including advertisements and billboards, in conjunction with thorough analysis of new cannabis laws, will minimize any exposure retailers might face from state regulators, including AGs.

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