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Medical Marijuana Advertising Becomes a Definite Liability for Broadcasters and Other Media

In what became one of our more heavily circulated posts, I wrote a piece back in early May entitled “Will Marijuana Ads Make License Renewals Go Up in Smoke?” It noted that the Department of Justice was showing signs of abandoning its “live and let live” policy toward medical marijuana producers and dispensaries operating in compliance with state laws.

Because advertising by such dispensaries had become a significant revenue source for broadcasters in states where medical marijuana was legalized, the DOJ’s about-face placed broadcasters in an awkward position. While medical marijuana may be legal under state law, it has never been legal under federal law. This means that broadcast stations, which the law deems to be engaged in an interstate activity, and whose livelihood depends on license renewal by the FCC, are an easy target for a Federal Government intent upon suppressing the sale of medical marijuana. The takeaway from my post was that stations should think long and hard before accepting medical marijuana ads.

It became clear this morning that it was time to do an update on the subject when an article from the Denver Post came across my desk noting that “the last bank in Colorado to openly work with the medical-marijuana industry — Colorado Springs State Bank — officially closed down the accounts of dispensaries and others in the state’s legal marijuana business over concerns about working with companies that are, by definition, breaking federal law.” Like broadcasters, the banking industry is heavily regulated by the Federal Government, and it appears that Colorado bankers have collectively concluded that, despite the large sums of money involved, it is not worth the risk of dealing with medical marijuana dispensaries and incurring the wrath of the feds.

That development alone should concern broadcasters airing medical marijuana ads. However, late today, word got out that the DOJ, through its four U.S. Attorneys in California, sent letters threatening medical marijuana dispensaries in California with criminal charges and confiscation of their property if they do not shut down within 45 days. Of particular interest to broadcasters (and any other media running medical marijuana ads), these letters were sent not just to dispensaries, but to their landlords, effectively telling the landlords to evict their tenant or risk imprisonment, forfeiture of their building and confiscation of all rent collected for the period the dispensary was in business.

The DOJ’s willingness to threaten those who are not engaged in the sale of medical marijuana, but who merely provide services to those who are, should raise alarm bells for media everywhere. If landlords who collect rent from medical marijuana dispensaries are at risk, media that collect ad revenues from promoting the sale of medical marijuana could just as easily be in the DOJ’s crosshairs. More to the point, the Federal Government is in a much better position to exercise leverage over the livelihoods of broadcasters than over California property owners not engaged in any form of interstate activity.

Colorado bankers have apparently already reached a similar conclusion, and the DOJ’s stepped-up campaign in California against medical marijuana removes any doubt for broadcasters and other media as to which way the federal winds are now blowing. You can expect a heated legal and political battle between the states and the Federal Government over the DOJ’s efforts to nullify state medical marijuana laws. While that battle ensues, broadcasters and other media will want to do their best to stay out of the line of fire.