Advertising Cannabis in California - Navigating the Obstacle Course
On October 8, California Governor Gavin Newsom vetoed AB 1302 which would have allowed marijuana ads on billboards along interstate freeways and state highways that cross state borders, except within 15 miles of another state. In doing so, Newsom issued the following statement:
“When the voters passed Proposition 64, they enacted robust protections shielding youth from exposure to cannabis and cannabis advertising. Among other things, voters completely prohibited billboard-based cannabis advertising on all Interstate Highways, and on all State Highways that cross the California border. Allowing advertising on these high-traffic thoroughfares could expose young passengers to cannabis advertising.”
These “protections” mirror other California laws already prohibiting cannabis advertising within 1,000 feet of a school, playground or youth center, among other things. See, e.g., B&P Code § 26152(g). Those further restrictions would have been unaffected by the proposed legislation vetoed by the Governor. Local ordinances can be even more strict - e.g., greater distances (1,500 feet for example) between cannabis advertisements and the designated prohibited zones of schools, playgrounds, and youth centers.
California has the largest GDP in the United States and the 5th largest in the world, surpassing both Great Britain and France. So it is no surprise that California is the world’s leader in cannabis. According to Forbes, sales in California in 2020 hit $4.4 billion, up 57% from the year prior. It is projected that by 2024, the California market will generate up to $8.1 billion in annual retail sales.
So while California has decriminalized cannabis and the appetite for cannabis is omnipresent, it is still heavily regulated – especially when it comes to advertising. Where does this leave advertisers?
When it comes to out-of-home advertising, two areas come immediately to mind that can be incredibly fraught with risk and liability. Advertisers need to be careful about billboard placement. They cannot be on interstate highways or on state highways that cross the California border. Advertisers also need to be careful about relying on static taxi toppers and wrapped buses as they can easily end up on an interstate highway or within 1,000 feet of a school, playground or youth center.
Fortunately, technology does exist that allows for digital ads on vehicles whereby cannabis ads stop displaying while on interstate highways or within 1,000 feet of a school, playground or youth center. Combining digital ads with proper geofencing allows a cannabis advertiser to launch an effective street-level marketing campaign and be compliant with current California law. As California law continues to evolve, the geofencing strategies can likewise evolve.