Licensed marijuana establishments in the State of Michigan are always seeking ways to increase their footprint in the budding cannabis industry. Whether it is to increase brand awareness, promote new products, or highlight the opening of a new location, marijuana establishments, like all other businesses, turn to and rely upon marketing and adverting to expand their presence by increasing brand awareness with the ultimate goal of increasing revenue.
With the issuance of new marijuana business licenses every day, current marijuana establishments are facing even stronger pressure to increase their marketing and advertising efforts in order to attract more patients or customers to their establishment.
Marketing and advertising, like all other aspects of marijuana business operations, are subject to various regulatory compliance requirements as promulgated by the Michigan Marijuana Regulatory Agency (MRA). As such, adherence to the regulatory compliance requirements is of paramount importance for any licensed marijuana retailer in order to ensure that their marketing and advertising endeavors are in full compliance with the MRA regulations and administrative rules.
Non-compliance with the MRA’s marketing and advertising restrictions can expose your licensed entity to undue financial risk, such as fines and other administrative sanctions, and even potentially jeopardize your license. With this in mind, this article addresses the regulatory compliance requirements and restrictions regarding marijuana marketing and advertising by licensed marijuana establishments in the State of Michigan.
No Deceptive or Misleading Ads or Unqualified Claims to Health Benefits
As an initial matter, the MRA requires that marijuana products must not be advertised in a way that is deceptive, false, or misleading. In accordance with MRA Administrative Rule R. 420.507(2), the restriction on ads that are false, deceptive, or misleading applies to any statements on any marijuana product, sign, or document.
In addition to the prohibition against false or misleading advertisements, the MRA also generally proscribes any claims related to health or health benefits from being made on or for any marijuana product, or on the labeling or packaging of any such marijuana product.
Notwithstanding the foregoing prohibition on health-related claims, the MRA does allow certain health-related benefits to be made if such claim has received and complies with a Letter of Enforcement Discretion issued by the United States Food and Drug Administration (FDA), or the health claim has been approved under the significant scientific agreement standard by the FDA.
Restrictions on Targeting Minors
The MRA also prohibits marketing and advertising marijuana products to minors or anyone not of legal age to consume marijuana products under Michigan law. Specifically, the MRA prohibits marijuana products from being advertised or marketed to members of the public, unless the entity advertising the product has:
“reliable evidence that no more than thirty percent (30%) of the audience or readership for the television program, radio program, internet website, or print publication, is reasonably expected to be under the twenty-one (21) for products sold and marketed under the Michigan Regulation and Taxation of Marijuana Act (“MRTMA”), or under the age of seventeen (17) for marijuana products sold and marketed under the Michigan Medical Marihuana Facilities Licensing Act (“MMFLA”)”
– MRA Administrative Rule R. 420.507(4)
While this restriction does contain an objective benchmark measure (i.e. at least 70% of targeted audience must be of legal age), the “reasonably expected” qualifier ultimately makes this a subjective standard. Ultimately, a marijuana entity wishing to advertise its products needs to gather documentation and other supporting and reliable evidence illustrating that the vast majority of the audience of their advertising (at least 70%) is of the required legal age to possess and consume such product.
As a practical example, because the legal age for possession and consumption under MRTMA is 21, marketing and advertising of recreational cannabis products on college campuses or in university-sponsored digital or print publications could be problematic since, in general, most college students do not turn 21 years old until their junior year, meaning at least half of a college campus (likely more) is comprised of students who are not 21 years of age.
Advertising to College Students
Since underclassmen on college campuses are almost assuredly all under the MRTMA-imposed legal age of consumption, a marijuana entity wishing to target college students by potentially advertising their business or products on college campuses needs to be fully aware of the advertising restriction imposed by the MRA. These entities should consult with counsel in order to effectively and compliantly navigate these advertising regulations.
In addition to the restrictions on advertising and marketing specific marijuana products, the MRA also prohibits marijuana entities from entering into sponsorship agreements or arrangements targeting individuals under the age of 21. In addition to running afoul on the direct prohibition of targeting minors, any advertisement that appeals to underage persons could also interpreted as misleading because it could be construed as inviting an illegal activity (i.e. the possession of an illegal substance by a minor). There is no constitutional protection for false or misleading advertising.
Although legal interpretations of the terms “false,” “misleading,” and “appealing” are not well-developed as they apply to cannabis-specific advertising (a misleading advertisement would very likely provide a basis for a third-party government agency to initiate and conduct an investigation into the advertisement in question (Lorillard Tobacco Co. v. Reilly, 533 US 525 (2001).
Labeling and Warning Requirements
All marketing and advertising of marijuana products must include, pursuant to MRA Administrative Rule R. 420.504(1)(k), the following warnings labels which must be displayed or affixed, as necessary and appropriate, on the advertisement or marketing materials:
- “It is illegal to drive a motor vehicle while under the influence of marihuana.”
- “National Poison Control Center 1-800-222-1222.”
- “For use by registered qualifying patients only. Keep out of reach of children.” (For products being marketed and sold by an entity licensed under the MMFLA).
- “For use by individual 21 years of age or older or registered qualifying patients only. Keep out of reach of children.” (For products being marketed and sold by any entity licensed under MRTMA).
It is important to note that any marijuana product under the MMFLA act must be marketed or advertised as “medical marihuana” for use only by registered qualifying patients or registered primary caregivers.
Overall, the major emphasis on compliance with marketing and advertising regulations is that all ads must be truthful, contain no misleading information or subliminal messaging, and must not target, or otherwise appeal to, children and minors who are not legally allowed to purchase and consume marijuana products.
Failure to strictly adhere to the compliance requirements could result in the imposition of fines and other penalties, as well as potentially jeopardize your license to operate as a licensed marijuana establishment. As such, strict adherence to the regulatory compliance requirements is of paramount importance when it comes to offering and providing marijuana home delivery services as part of the overall business operations of your marijuana retailer establishment.
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