By: David Oxenford,
Wilkinson Barker Knauer LLP
Last week, the US House of Representatives passed the MORE Act which, if enacted, would take marijuana off the list of Schedule I drugs – those drugs whose possession and distribution is a federal felony, as is the use of the radio waves to promote their use. As we have warned before (see, for instance, our article here published when an earlier version of this bill passed the House in 2020), because of the laws making the sale of marijuana a federal crime and prohibiting the use of radio waves to promote that sale, broadcast stations should think twice about any marijuana advertising, even in states where it has been legalized. Thus, the passage of MORE Act through the House should not be taken as a sign to start running marijuana advertising on your broadcast station.
First, it is important to remember that this bill was 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 2023, the whole process must start over again – bills do not carry over from one Congressional session to another. So, if Senate action is not forthcoming this 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. The MORE Act passed the House with few Republican votes, so if the composition of the House changes next year, that may not bode well for this legislation if it does not pass the Senate this year.
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 has not in recent years issued any decisions regarding a station that is running marijuana ads in a state where the sale is now legalized. But being a federal agency which enforces federal law, it 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 a complaint during the ongoing license renewal process.
But does that House action signal movement in the future? For years, we have seen the entire Congress include language in budget bills to restrict the use of federal funds by the Department of Justice to take actions that would prosecute entities that sell medical marijuana pursuant to state laws that have legalized the sale of medical marijuana. That permission has been limited to medical marijuana, and it only applies for the period 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 limit only the DOJ, and do not limit other agencies 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, more and more state laws have been changed to legalize marijuana, with many states legalizing both recreational and medical marijuana use, including many states that most would consider to be “red states.” 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 FCC did not take a similar action. It is also worth noting that federally insured and regulated banks have been asking Congress for years to allow them to process funds from marijuana businesses in states where its use has been legalized, but no legislation giving banks that authority has yet passed.
So the outlook is uncertain. But as more and more states of all political leanings legalize the use of marijuana, it would seem as if the pressure on Congress to act will only increase. In fact, one could even see the vote on the MORE Act becoming a political issue in the upcoming 2022 elections. Keep following developments on this issue – and continue to exercise restraint in advertising on broadcast stations until the laws change.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access). There are no additional costs for the call; the advice is free as part of your MAB membership.