PITTSFIELD — On behalf of a coalition of businesses, Flora Cannabis is suing the Vermont Cannabis Control Board over what they deem to be “unreasonable” and “unconstitutional” advertising regulations.
The Middlebury-based retailer said it’s trying to block the state’s “unprecedented and unconstitutional restrictions on the protected free speech rights of the state’s 500-plus licensed cannabis cultivators, manufacturers, distributors and retailers.” The lawsuit was filed Monday in Addison Superior Court, Civil Division.
Having a health warning on all cannabis ads and demonstrating that no more than 15 percent of those potentially exposed to an ad are under the age of 21 are considered “unreasonable” burdens, according to the complaint. Also cited in the suit are “unreasonable” prohibitions on “common promotional offers” and “depicting or describing particular cannabis products on social media websites.”
Flora said the litigation is supported by a broad coalition of licensed cultivators, manufacturers, distributors and retailers across Vermont. Scott Sparks, owner of Vermont Bud Barn in Brattleboro, said he’s involved in the suit.
Dave Silberman, co-founder of Flora, described having attorney A.J. Ruben file the complaint “reluctantly, and only after years of failed attempts to reason with legislature and regulators to find a workable compromise, and to treat us in the same manner as the state treats other ‘regulated vice’ industries such as sports wagering and alcohol.”
“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, calling the regulations “the nation’s most wide-ranging and onerous prohibition on protected speech.”
Current regulations are “illegally muzzling the cannabis industry and preventing us from being able to effectively communicate with adult customers,” Silberman added.
CCB Chairman James Pepper said he received a copy of the complaint Tuesday night and knew it was coming.
“The industry has come out strongly asking for advertising reforms,” he said.
Pepper expects the court will be looking at some of the principles related to the freedom of commercial speech.
“How they come down on this will be interesting is all I can say,” he said.
Pepper noted the CCB’s job is to enforce law as it’s written. He plans to ask the Attorney General’s Office to defend the CCB.
“We really are, as regulators, not in a position to say the advertising laws are good or bad,” he said. “We’ll keep [enforcing] until we’re told otherwise.”
In an interview Monday about goals and projects in the new year, Pepper mentioned the possibility of being sued over the ad regulations.
“We may need another attorney position especially if the advertising law was struck down,” he said.
Cannabis companies don’t like needing pre-approval before publishing ads as the process “slows things down for the businesses by about seven days,” Pepper said. With the CCB rejecting a “fair number” of submissions regularly, he anticipates enforcement actions with fines attached will require more resources for his agency.
“It will be a lot more work for something that could have been dealt with through the advertising review process,” he said.
CCB data released in October showed nine out of 29 advertising submissions were denied in a month. Six were missing or had illegible health warnings, one appealed to children, another missed audience requirements and one had not been classified.
Data in July showed 16 advertising submissions were approved and nine were denied in a month. Seven had missing or illegible health warnings. One was missing audience information, and another involved a cannabis product giveaway.
A hearing on a motion for preliminary injunction is set for late January, Ruben said.
