Congress on Friday took a major step forward toward allowing radio and television stations to accept cannabis advertising in states where it has been legalized. The House Appropriations Committee advanced the fiscal year 2023 Financial Services and General Government appropriations bill which includes language that would prevent the Federal Communications Commission from taking administrative action against broadcasters that accept cannabis ads, as long as cannabis has been legalized in the state or jurisdiction in which the station is licensed.
During a hearing that stretched hours on Friday, there was opposition to the idea. Rep. Kay Granger (R-TX) repeated concerns she raised during a hearing earlier this month, slamming the inclusion of a “significant” policy change in a must-pass budget bill. “As this process moves forward, we will continue to try to secure an agreement. We want language carried in the bills in the past to be retained, and controversial policies to be dropped,” said Granger.
But most of the debate was centered on border security issues and by the time the bill was cleared by the Appropriations Committee by a voice vote, there seemed to be little interest in stripping out the cannabis advertising language. The bill is seen as a milestone toward leveling the playing field for broadcasters to capitalize on what is projected to be an $18.4 billion industry in the U.S. this year.
In states that have approved cannabis for medical and/or adult use, local radio and TV stations are currently unable to accept ads from legally authorized cannabis distributors because stations operate under an FCC license. However, competitors to local radio and TV stations, such as cable, satellite, internet, print, magazine, billboards, and social media platforms are free to accept marijuana ads.
The National Association of Broadcasters applauded the House committee’s move. “As the vast majority of states have legalized cannabis in some form, today marks a long overdue step toward finally allowing broadcasters to receive equal treatment regarding cannabis advertising that other forms of media have had for years,” NAB spokesman Alex Siciliano said in statement Friday evening.
The budget bill still needs to win approval by the full House and Senate. “While we welcome today's progress, local broadcasters will continue to work with all policymakers towards a broader resolution of this competitive disparity and in support of our unique service to local communities,” said Siciliano.
What’s more, the proposed legislation does not appear to address the separate issue of the Controlled Substances Act’s ban on the use of radio or internet – and most other forms of media – for the sale of illegal drugs, nor does it address the additional potential criminal risk around money laundering or “aiding and abetting” criminal activity.
As first reported by Inside Radio on June 17, the language that would open the door for broadcasters to carry cannabis ads was tucked deep inside the proposed federal budget in the Financial Services and General Government portion of the hulking federal budget outline for the fiscal year beginning Oct. 1. The bill passed its first hurdle when it was voted out of the subcommittee on June 16. It was then sent to the full House Appropriations Committee, which approved it on Friday.
‘A Major Step Forward’
A group of nearly two dozen state broadcast associations have joined forces to create the Safe Advertising Coalition to push Washington to allow cannabis advertising onto the airwaves. The New York State Broadcasters Association is among them and after the vote its President, David Donovan, thanked lawmakers “for recognizing the unfairness of the present situation” when it comes to cannabis advertising. In a statement, Donovan called the provision in “a major step forward for leveling the playing field for local broadcasters.”
Donovan and members of the Safe Advertising Coalition believe the law of the state in which a station is licensed should determine whether it can accept cannabis advertising if it chooses to do so. “We look forward to working with members of Congress and the Administration to help restore parity between local broadcasters and other media outlets,” Donovan added.
Broadcasters have struggled with the dilemma of whether to accept advertising from the growing cannabis industry as laws changed state by state. Most companies have opted to reject such buys faced with the potential risk to their license as federal law continues to put marijuana in the same class of illegal drugs as heroin.
The House appropriations bill would prevent the FCC from using any money to deny a license renewal or a station sale application as punishment for airing advertising for cannabis or cannabis-derived products. The bill would also prohibit the FCC from requiring an early license renewal application be filed by a station for taking those ads. And the FCC would be prohibited from issuing fines.