During a hearing this week regarding a bill to ban marijuana advertising, a significant disparity in the interpretation of the state’s existing ad policy for the cannabis industry was exposed.
On Wednesday morning, the House Business and Labor Committee met to consider House Bill 351, which would effectively ban most marijuana advertising in Montana. In its current form, the bill would prohibit a marijuana business from utilizing outdoor signage and billboards and any use of a dispensary’s brand name or logo in print, TV, radio, or sponsorship. In keeping with current law, HB 351 allows for one exception: listings in online directories.
During the hearing, it became evident that there was a disagreement regarding the applicability of current laws that forbid advertising of “marijuana and marijuana products” to a brand’s name and logo.
HB 351, if approved, would impose limitations on around 400 dispensaries in Montana, hindering their promotional activities and prohibiting media outlets from advertising cannabis businesses. Advocates from the cannabis industry argue that this bill would not only make it difficult for customers to differentiate between businesses, but also lead to decreased sales across the state and reduced tax income for Montana.
In Montana’s first year of recreational sales — which began on Jan. 1, 2022 — vendors sold $210 million of adult-use cannabis and nearly $94 million of medical marijuana. Collectively, those sales generated about $46 million in tax revenue for the state.
Safe Montana, an anti-recreational-marijuana organization, provided two proponents of the bill who testified before the committee. Conversely, over 20 individuals affiliated with the cannabis industry and media organizations expressed their opposition to the bill.
The hearing became dramatic as industry representatives accused the bill of infringing on their rights and potentially causing substantial damages to their businesses.
“We did not do a very good job of defining and including ‘brand’ [in the original bill],” sponsor Rep. Seekins-Crowe, R-Billings, told Montana Free Press after the hearing.
She added that this is a common occurrence when transitioning from writing bills to rulemaking. She believes that it wouldn’t have been as big of an issue if there weren’t suddenly ads on bathroom stalls, benches, and even entire sides of buildings painted with advertisements, rather than just signs.
BRANDS VS. PRODUCTS
Seekins-Crowe presented the bill at the hearing, portraying it as a way to align with the original purpose of the 2020 voter initiative that granted legal status for adult-use marijuana sales in Montana.
She stated that House Bill 351 is essentially a clean-up bill as it aims to bring us back to the original promise made in the recreational marijuana initiative, which was to prohibit advertising.
Yet opponents of the bill argued — and rules enacted by the Department of Revenue state — that the 2020 voter initiative, as well as the 2021 Legislature’s subsequent framework bill, House Bill 701 prohibit businesses only from advertising specific strains of marijuana or marijuana products, not the names and logos of the brands that sell them.
The rules set by the Department of Revenue make a distinction between advertising a marijuana “brand” such as a dispensary or business name, and advertising specific products.
That rule reads: “A licensee may promote its business and market its brand but may not advertise marijuana or marijuana products except in electronic advertising.”
The state’s marijuana programs are overseen by the Cannabis Control Division of the Department of Revenue, who declined to give any comment for this story.
PROPONENTS CONTEND ADVERTISING IS A THREAT
Steve Zabawa and Scott Reichner, a former state representative, both lent their support to the bill, representing Safe Montana.
Both men portrayed current marijuana advertising, including authorized listings in online directories, as a negative influence on society that will lead to an increase in users.
According to Zabawa, the Department of Revenue’s current brand advertising rule was enacted without proper authority.
OPPONENTS CITE BUSINESS AND ETHICAL CONCERNS
A few concerns were raised by the bill’s opponents.
There were plenty of arguments suggesting that it would harm their financial outcomes, strengthen an underground market, and decrease the state’s tax earnings from the thriving industry. Additionally, some individuals contended that it encroached on their personal liberties and rights outlined in the First Amendment.
Pepper Petersen, the president of the Montana Cannabis Guild, stated that during the last session, lawmakers repeatedly guaranteed that they would not be promoting marijuana products. He expressed the importance of informing people that they should only purchase marijuana from licensed, regulated, and legal establishments. Petersen criticized HB 351, referring to it as a bill that strengthens the illicit market, comparing it to a cartel.
Starrbuds dispensary owner in Missoula, Glenn Broughton, pointed out that the implementation of the new law would compel businesses to remove outdoor signage they had previously invested substantial amounts of money into.
He remarked, “This bill is beyond imagination. It can only be described as a confiscation of property.”
According to Kate Cholewa, a representative from the Montana Cannabis Industry Association, the newly implemented policy would primarily have a negative impact on law-abiding businesses.
She remarked that playing whack-a-mole only affects individuals who abide by the law.
Seekins-Crowe emphasized in a short interview following the hearing that she is receptive to input from the industry. Additionally, she clarified that she has initiated a collaboration with her colleagues, notably Rep. Katie Sullivan, D-Missoula, to collectively devise a more effective solution in this matter.
