Capitol Alert

If California legalizes pot, will TV ads be far behind?

5 things you need to know about the California marijuana proposition

California was the first state to allow medical marijuana. Now, two decades later, voters are expected to be asked whether to legalize recreational use of the drug. The legalization measure headed for the statewide November ballot is the product o
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California was the first state to allow medical marijuana. Now, two decades later, voters are expected to be asked whether to legalize recreational use of the drug. The legalization measure headed for the statewide November ballot is the product o

As the marijuana company conceived it, the ad for pot vaping pens would have beamed into the living rooms of Coloradans watching Jimmy Kimmel one night last July.

The spot depicts people partying in a nightclub and backpacking as a voiceover suggests people are “always finding new ways to relax” and could use a way to “recreate discreetly this summer.”

But vape vendor Neos’ plans for reaching customers collided with the television network’s nervousness about recreational pot.

In legalizing recreational adult use via a 2014 ballot initiative, the people of Colorado had thrust the state into a nebulous and unprecedented legal middle ground. Voters established a new industry under the shadow of federal prohibition. With a federally granted broadcasting license at stake, the ABC affiliate planning to run the ad balked.

“The decision was based on the fact that, although marijuana is legal to use, possess and sell in Colorado, possession is still a federal crime,” Kari Wethington, a spokeswoman for the station’s parent company E.W. Scripps, said in an email.

For California voters, the way legal pot would be advertised in California figures to be a central feature of the Proposition 64 campaign. Whether and where consumers could encounter pot ads touches overarching worries about whether kids will be exposed to the pitches.

The hazards of unfettered advertising have loomed over legalization efforts nationally. An official report in Oregon, written to help advise policymakers about youth prevention after the state legalized pot, warned of “substantial marketing and advertising of marijuana products.” A report overseen by Lt. Gavin Newsom in the run-up to California’s campaign cautioned that “as a commercial industry develops there are risks of targeted advertising similar to prior tobacco campaigns.”

Much of the debate has focused on television’s role. The California measure’s champions reject the warning, leveled by opponents, that legalization will flood the airwaves with pot ads.

While it’s a “remote possibility” that federal law could change, it’s unlikely, Proposition 64 spokesman Jason Kinney said in an email.

“That’s why states like Colorado and Washington haven’t had television advertising for non-medical marijuana,” he said.

The goal of putting TV advertising into the initiative is to do TV advertising.

Andrew Acosta, spokesman for No on Proposition 64 campaign

Last week the two were in court battling over the language in official ballot arguments. Judge Shelleyanne W.L. Chang issued a mixed ruling, illuminating how questions about TV pot advertising still lack definitive answers. She left in place proponents’ statement that “Federal law prohibits” pot ads on TV but also allowed the opposition to argue that children could see commercials advertising pot-laced gummy bears and brownies.

The ambiguity reflects a constant tension navigated by states that have legalized marijuana. Federal authorities have avoided cracking down on states that have legalized pot. A 2013 Department of Justice memo that serves as a lighthouse in the legal fog offered to not intervene in states that enact “strong and effective” controls on pot.

So while it’s accurate for proponents to say federal law prohibits marijuana advertisements, the federal government also prohibits possessing or selling marijuana. Yet dispensaries have thrived from Denver to Seattle.

And while the Justice Department memo gives some clear guidelines, the Federal Communications Commission has been studiously silent. The federal regulator, which has the power to grant and revoke broadcasting licenses, declined comment.

“There are serious questions as to whether any federal agency, such as the FCC, would come in and pre-empt state law,” said Judy Endejan, a communications and media lawyer in Washington state who wrote a paper on pot ads. “Of the many policy issues the FCC has to deal with, I think they’re deliberately ducking this one.”

Given the muddled landscape, television stations are hanging back.

Without a clear indication, the vast majority of broadcasters are going to stay away from this issue.

Joe Berry, president of the California Broadcasters Association

The Washington, D.C.-based National Association of Broadcasters is not offering explicit advice either way to its member stations. Justin Sasso, head of the Colorado Broadcasters Association, was less hesitant.

“Many of my members called at the beginning of 2014 to say, ‘Hey, can I take (pot ads)?’ ” he said. “And the absolute, no holds barred response is absolutely no.”

Executives in California have looked to early adopters like Colorado and Oregon, said California Broadcasters Association President Joe Berry, and they’ve drawn a similar conclusion.

“I don’t think anybody knows, and that’s the problem,” Berry said. “Without a clear indication, the vast majority of broadcasters are going to stay away from this issue.”

The vape ad’s ejection from its planned run on the Colorado station reflected that circumspection. A Portland, Ore., television station also canceled a planned ad for a medical marijuana conference last year.

While ad managers don’t know how the FCC might act, “what we do know is the expense to defend” against a complaint “and keep your license could be astronomical,” Sasso said. “Who wants to be that guinea pig?”

The picture looks different for independently owned stations, which enjoy more autonomy than network affiliates. A Sacramento-based advertising firm, Seraphein Beyn Advertising Inc., conceived an ad for a Oakland medical marijuana dispensary that he said ran on two Bay Area stations, one independently owned and the other owned and operated by Media General Inc.

“The corporate entities are far less likely to approve anything that’s cannabis-related just because it’s a federal offense,” President Bob Beyn said. “We have run that up the network flagpoles only to be shot down.”

Pot law architects have tried to find ways to limit the hazards of weed ads. Colorado law imposes a requirement commonly referred to as the “70/30 rule,” which dictates that pot ads can only run during programs where the majority of viewers are likely to be of legal pot-buying age.

A pot ad on TV “would be OK if market research shows it still abides by 70/30 rules,” Colorado pot czar Andrew Freedman said in an email. “However, the (FCC) could certainly decide on its own that this is not allowed, and that would trump state law.”

Few broadcasters want to find out, Sasso said, noting “it’s really difficult to identify when a certain program has a certain audience exactly.”

Olivia Mannix of the marketing agency Cannabrand, which created the Neos spot, said her agency believed about 98 percent of the audience settling in to watch Jimmy Kimmel would have been older than 21. But Scripps, Mannix argued, “got cold feet.”

“This would have been a game changer for the industry,” Mannix said in an email. “It would have been another step closer for legalization and the ‘mainstreaming of cannabis.’ 

As in Colorado, the California initiative dictates that “advertising or marketing placed in broadcast, cable, radio, print and digital communications” can only go “where at least 71. 6 percent of the audience is reasonably expected to be 21 years of age or older.”

While the language is meant as a safeguard, opponents have seized on it as evidence that the sponsors have contemplated television ads. They say many primetime shows would have large enough adult audiences to allow for pot commercials during breaks.

“The goal of putting TV advertising into the initiative is to do TV advertising,” said Andrew Acosta, a spokesman for No on Proposition 64. “That’s a business decision … they cannot say no kid will be watching.”

In addition to curtailing where ads can appear – no billboards on interstate highways, no advertisements near schools and youth centers – the California initiative would also bar advertising or marketing containing kid-friendly features like “language, music, gestures” or “cartoon characters.” Proponents argue that will limit youth exposure.

“No gummy bears – period,” Kinney said, arguing the law “specifically, explicitly, in black-and-white, no wiggle room” bans products that appeal to kids or that could be confused with non-weed foods.

But skeptics believe profit-driven weed companies will pursue more subtle appeals that still fall within the law. Rachel Barry, a researcher who co-wrote a report warning of a green-hued Big Tobacco stepchild, drew a comparison to “subliminal marketing” in alcohol ads that implore adults to “drink responsibly” after touting a beverage’s benefits. Likewise, the vaping pen ad that was slated to run in Colorado concluded with the phrase “recreate responsibly.”

“Here’s these young adults partying and having a good time – they’re not actual prevention messages,” Barry said.

And regardless of how television is governed, at a time when the media market continues to fragment and undercut television’s dominance, pot companies could have other avenues to reach voters.

An ad featuring partygoers enjoying a pot-infused beverage called Legal soda, bottled in Washington and Oregon, is available only online. That makes it easier to target precise groups of consumers and to append adults-only filters, said said Adam Stites of Mirth Provisions, which created the spot.

“The problem with TV is, I don’t think that’s my audience,” Stites said. “I don’t think that’s an efficient ad spend.”

Senate President Pro Tem Kevin de León, D-Los Angeles, says he has not made up his mind about Proposition 64, the marijuana legalization measure, at a press conference in the Capitol on Aug. 3, 2016.

Lt. Gov. Gavin Newsom's wife, Jennifer Siebel, is concerned about how legal marijuana will affect their children, so Newsom has shown her articles about how new rules would make the drug harder for kids to get their hands on.

Jeremy B. White: 916-326-5543, @CapitolAlert

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