Updated at 5:11 p.m.
A Middlebury cannabis retailer contends in a new lawsuit that Vermont’s restrictive rules on advertising its products infringe on constitutional rights to free speech and are hurting the legal weed market.
Dave Silberman, who co-owns FLŌRA Cannabis, filed the 20-page complaint on Monday in Addison County. It names as defendants the Vermont Cannabis Control Board; its chair, James Pepper; and its executive director, Olga Fitch.
“Defendants’ unconstitutional actions are detrimental to the generally understood and Legislatively acknowledged goal of protecting the health and safety of Vermont’s adult cannabis users,” the suit says.
The suit asks the court for an injunction to stop the state from enforcing the advertising regulations and to order the creation of “constitutionally appropriate” ones with input from those in the industry.
Vermont’s cannabis advertising rules rankle those in the industry — as well as as newspapers and radio stations that benefit from advertising dollars. (Seven Days, for instance, runs cannabis ads.) Silberman, an attorney who opened his shop on October 1, 2022 — the first day of legal weed sales in Vermont — has been among the most outspoken against the advertising regulations.
Given the pushback over the years, Pepper, the control board chair, said the suit wasn’t a surprise. Some lawmakers initially wanted to ban advertising completely, Pepper said, but the Attorney General’s Office realized that would be “overly broad” and “overly restrictive on otherwise protected speech.”
The fear, Pepper said, was that cannabis advertising would follow in the footsteps of tobacco companies, which targeted kids with “Joe Camel” and other suggestive campaigns.
“The compromise was to loosen it up a bit but try to keep it restrictive,” Pepper said.
Pepper declined to weigh in on the merits of the lawsuit but said the board will continue to take its direction from the legislature, whether changes are required or not.
“I think the only time that we have a real concern is when we need additional resources at the board to actually achieve what’s being asked of us,” he said.
Current rules require all ads to be approved in advance by Vermont Cannabis Control Board staff. Media outlets must prove that less than 15 percent of their audience is under 21. Ads may not offer samples or prizes or feature cartoon characters or toys that might appeal to children. Each ad must include a 135-word health warning.
Reading the warning aloud takes about 30 seconds, the suit says, “making the cost of utilizing radio announcements prohibitively expensive and unattractive to listeners.”
The regulations apply not only to advertising in traditional media and on websites but also to the social media accounts that many businesses use to reach potential customers. And, the suit argues, the law goes even further to include in-store signage “and even direct communications with individual customers.”
Getting ads approved can take weeks and cause uncertainty for businesses that are unsure whether they’ll receive the state’s sign-off, the suit argues.
“No such prior restraint regime exists in Vermont for any other industry, including other ‘regulated vice’ industries such as sports gambling, alcohol, or tobacco …. [or] for licensed cannabis businesses in any other states,” the suit says.
The suit notes that noncompliant advertising is punishable by a $10,000 fine, and repeat offenders could lose their state license.
Meanwhile, the suit argues, the regulations benefit those who sell illegally — including out-of-state operators that advertise on the internet — and are not bound by the stringent rules. The regs also stunt the industry as a whole, the suit says, and prevent the state from collecting more tax revenue.
“Vermont’s licensed cannabis industry supports reasonable advertising regulations, including targeted regulations to prevent advertising that is especially appealing to underage consumers, or making false or misleading statements,” Silberman said in a statement. “Instead of narrowly tailoring its advertising regulations towards preventing these harms, the State intentionally drafted the nation’s most wide-ranging and onerous prohibition on protected speech, illegally muzzling the cannabis industry and preventing us from being able to effectively communicate with adult customers.”
This article appears in Dec 4-10, 2024.
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