ADVERTISING, MARKETING & PROMOTIONS >> ALERT COLORADO’S RETAIL MARIJUANA REGULATIONS COVER ADVERTISING, LABELING, AND PACKAGING The 122 pages of regulations issued recently by the Marijuana Enforcement Division of the Colorado Department of Revenue governing the retail sale of marijuana in Colorado focus on a host of topics, from licensing and fees to alarm systems required for stores, and even waste disposal. The regulations also include dozens of pages and rules relating to the advertising, labeling, and packaging of marijuana. Imagine if back in college the campus marijuana dealer had a 30 second spot on late night local television, distributed coupons or established a rewards club. With the recent enactment of legalized marijuana sales for recreational use in Colorado, some of this could become reality. GENERAL GOALS The numerous signage and advertising rules are intended generally to delineate that a licensed retail marijuana establishment (a seller) may not engage in advertising that is “deceptive, false, or misleading,” including on any product, any sign, or any document provided to a consumer. The rules also appear targeted to protect children from coming into contact with marijuana or advertising for marijuana. SPECIFIC RULES The specific rules generally use the alcohol industry’s voluntary advertising standards as a model. For example, they provide that sellers may not use television or radio advertising unless they have “reliable evidence” that no more than 30 percent of the audience for the program on which the advertising is to air is reasonably expected to be under the age of 21. Similarly, a seller may not advertise in print publications or via the Internet unless it has reliable evidence that no more than 30 percent of the publication’s readership, or the audience for the Internet web site is reasonably expected to be under the age of 21. This means general interest web sites may be off-limits. Another rule prohibits a seller from using unsolicited pop-up advertising on the Internet. Moreover, a seller in Colorado “shall not engage” in advertising that specifically targets persons located outside Colorado. SAFETY CLAIMS A seller may not engage in advertising or use signage that asserts that its products are safe because they are regulated by the Colorado government. A seller also may not engage in advertising or use signage that asserts that its products are safe because they are tested by a licensed marijuana testing facility, although it may advertise that its products have been tested by a facility. MARCH 2014 Attorney Advertising 1472 THE BOTTOM LINE It’s no surprise that licensed retail marijuana sellers in Colorado have joined the ranks of other highly regulated “sin” industries such as alcohol and tobacco. These regulations are designed to ensure – among other things – that the products aren’t marketed to those who aren’t supposed to partake and that the sellers aren’t making claims that are unfounded. While this industry is still young and likely to expand, sellers, their agents and media companies should take note that actions to enforce the regulations won’t be far behind. >> continues on next page
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ADVERTISING, MARKETING & PROMOTIONS
>> ALERT COLORADO’S RETAIL MARIJUANA REGULATIONS COVER ADVERTISING, LABELING, AND PACKAGING The 122 pages of regulations issued recently by the Marijuana Enforcement Division of the Colorado Department of Revenue governing the retail sale of marijuana in Colorado focus on a host of topics, from licensing and fees to alarm systems required for stores, and even waste disposal. The regulations also include dozens of pages and rules relating to the advertising, labeling, and packaging of marijuana.
Imagine if back in college the campus marijuana dealer had a 30 second spot on late night local television, distributed coupons or established a rewards club. With the recent enactment of legalized marijuana sales for recreational use in Colorado, some of this could become reality.
GENERAL GOALSThe numerous signage and advertising rules are intended generally to delineate that a licensed retail marijuana establishment (a seller) may not engage in advertising that is “deceptive, false, or misleading,” including on any product, any sign, or any document provided to a consumer. The rules also appear targeted to protect children from coming into contact with marijuana or advertising for marijuana.
SPECIFIC RULESThe specific rules generally use the alcohol industry’s voluntary advertising standards as a model. For example, they provide that sellers may not use television or radio advertising unless
they have “reliable evidence” that no more than 30 percent of the audience for the program on which the advertising is to air is reasonably expected to be under the age of 21.
Similarly, a seller may not advertise in print publications or via the Internet unless it has reliable evidence that no more than 30 percent of the publication’s readership, or the audience for the Internet web site is reasonably expected to be under the age of 21. This means general interest web sites may be off-limits. Another rule prohibits a seller from using unsolicited pop-up advertising on the Internet.
Moreover, a seller in Colorado “shall not engage” in advertising that specifically targets persons located outside Colorado.
SAFETY CLAIMSA seller may not engage in advertising or use signage that asserts that its products are safe because they are regulated by the Colorado government.
A seller also may not engage in advertising or use signage that asserts that its products are safe because they are tested by a licensed marijuana testing facility, although it may advertise that its products have been tested by a facility.
MARCH 2014
Attorney Advertising1472
THE BOTTOM LINE
It’s no surprise that licensed retail marijuana sellers in Colorado have joined the ranks
of other highly regulated “sin” industries such as alcohol and tobacco. These
regulations are designed to ensure – among other things – that the products aren’t
marketed to those who aren’t supposed to partake and that the sellers aren’t making
claims that are unfounded. While this industry is still young and likely to expand,
sellers, their agents and media companies should take note that actions to enforce
the regulations won’t be far behind.
>> continues on next page
>> ALERT
MARCH 2014
ADVERTISING, MARKETING & PROMOTIONS
OUTDOOR ADVERTISINGThe regulations make it unlawful for any seller to engage in advertising that is visible to members of the public from any street, sidewalk, park, or other public place (except to identify the location), including advertising utilizing any:
>>>> billboard or other outdoor general advertising device;
>>>> sign mounted on a vehicle;
>>>> hand-held or other portable sign; or
>>>> handbill, leaflet, or flier directly handed to any person in a public place, left on a motor vehicle, or posted on any public or private property without the consent of the property owner.
In addition, a seller may not include in any form of advertising or signage any content that “specifically targets individuals under the age of 21,” including but not limited to cartoon characters or similar images.
LOCATION-BASED DEVICESThe regulations prohibit a seller from engaging in advertising via location-based services, such as those directed to mobile devices, unless the marketing is through a mobile device application installed on the device by the owner of the device who is 21 year of age or older and includes a permanent and easy opt-out feature.
EVENT SPONSORSHIPA seller may sponsor a charitable, sports, or similar event, but may not engage in advertising at, or in connection with, an event unless it has reliable evidence that no more than 30 percent of the audience at the event and/or viewing advertising in connection with the event is reasonably expected to be under the age of 21.
LABELING AND PACKAGINGThere are labeling and secure packaging requirements for marijuana, retail marijuana concentrates, and retail marijuana products that require that the packaging not be easily opened by children and not be designed to appeal to children.
Labeling text on a container may not make any false or misleading statements regarding health or physical benefits to the consumer, must be no smaller than one sixteenth of an inch, must be clearly written or printed and in English, and must be unobstructed and conspicuous.
There also is information that must be affixed to containers holding retail marijuana, a required statement when contaminant tests have not been performed, as well as certain other packaging rules.
MEDIA PROPERTIESDespite the acts permitted by the regulations, sellers will still have to deal with media properties and channels that have advertising guidelines which prohibit the promotion of certain products.
FOR MORE INFORMATION Gary A. Kibel Partner 212.468.4918 [email protected]
Joseph J. Lewczak Partner 212.468.4909 [email protected]
or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com
© 2014 Davis & Gilbert LLP
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