California Court Bans Cannabis Billboard Advertising on All Highways That Cross State Line

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The San Luis Obispo County Superior Court recently granted a petition to ban almost all outdoor cannabis advertising on more than 4,000 miles of California highways. The case was brought by county resident Matthew Farmer, who claimed the Bureau of Cannabis Control's interpretation of Proposition 64 would unnecessarily expose him and his teenage children to cannabis advertising.1

Although the court's holding leaves little doubt that it will issue an order drastically restricting outdoor cannabis advertising on these highways, no order or further guidance from the Bureau of Cannabis Control (BCC) has yet issued.

In 2016, Californians overwhelmingly approved Proposition 64, which legalized cannabis for adult use, and created the BCC to administer and enforce the law. Reflecting sensitivity to interstate marketing of cannabis while cannabis remains federally illegal, Proposition 64 prohibits licensed cannabis businesses from "advertis[ing] or market[ing] on a billboard or similar advertising device located on an Interstate Highway or on a State Highway which crosses the California border."

The BCC later issued rules interpreting the restriction in Proposition 64 to prohibit only cannabis billboards and other outdoor advertising "located within a 15-mile radius of the California border on an Interstate Highway or on a State Highway that crosses the California border."2

Farmer sued, claiming that BCC's regulation was in conflict with the statute, and that his status as a taxpayer gave him standing to challenge the rule. The Hon. Ginger E. Garrett granted the petition and ordered the BCC to meet and confer with Farmer to propose an order to withdraw the regulation—and presumably implement a much stricter ban on all outdoor advertising on any interstate or state highway that crosses the California border.3

The court's decision appears to give short shrift to First Amendment concerns. The applicable terms "Interstate Highway" and "State Highway" are not defined in the statute, but a broad reading of these terms could effectively prohibit all outdoor advertising on a vast swath of the state's roads, far from any border. For instance, U.S. Route 101 runs as a surface road through San Francisco and many Northern California towns before crossing the border into Oregon.

Moreover, the definition of cannabis "advertising" in the statute is broad, and lacks specific exceptions for educational or noncommercial messages which other states have adopted to avoid chilling speech about cannabis. In short, an expansive interpretation of the statutory ad restrictions would prohibit a wide range of outdoor cannabis communications.

The decision may be subject to appeal on a variety of issues, including not only the merits of the claimed "conflict," but also the plaintiff's standing to sue, since there is no live dispute concerning a particular ad or billboard—just a legal question framed in the abstract. Any ensuing regulations to broadly ban cannabis ads on highways throughout the state may be subject to challenge as an unconstitutional restriction on speech.

Although an order has not yet been issued, cannabis operators and outdoor advertising companies should be aware of this development and immediately factor it into their cannabis communications strategy.

FOOTNOTES

1  Farmer v. Bureau of Cannabis Control, San Luis Obispo Super. Ct. No. 19-cv-0597.
2  Cal. Bus. & Prof. C. § 26152.
3  Cal. C. Reg. § 5040(b)(3) (emphasis added).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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