Vermont Cannabis Retailer Takes Legal Stand Against Advertising Restrictions

This week, a Middlebury-based cannabis retailer, FLŌRA Cannabis, filed a civil lawsuit against the Vermont Cannabis Control Board. The retailer argues that state-imposed advertising restrictions violate constitutionally protected free speech rights.

Details of the Lawsuit

The lawsuit, submitted in Addison County Superior Court, specifically challenges Vermont law mandating that all licensed cannabis businesses seek pre-approval from the control board for any public communication aimed at driving sales, including signage within their own stores. FLŌRA co-founder Dave Silberman explained, “If I want to put signage in my own store — 20% off a product — I need to get it pre-approved by the Cannabis Control Board (CCB).”

Arguments for and Against the Law

Supporters of the stringent advertising law argue it protects minors, yet Silberman contests this reasoning, stating, “People can’t enter unless they have their ID verified.” He expressed willingness to adhere to some restrictions, such as prohibiting cartoon characters in advertising, but sees the level of stigma imposed as an infringement on free speech.

Current Practices and Perspectives

James Pepper, Chair of the Cannabis Control Board and a defendant in the lawsuit, acknowledged the contention surrounding these regulations. “This has been a bone of contention at the Legislature since back in 2020,” he said. The board enforces advertising laws as they are written, often at the industry’s behest.

Pepper explained, “Cannabis advertising is any communication that is calculated to induce a sale.” Therefore, any notice of a sale, whether inside the store or online, requires approval beforehand. Despite this, Pepper assured that displaying a sale sign is not illegal as long as it undergoes the necessary pre-approval.

Statistics on Advertising Approvals

Since November 2022, the Cannabis Control Board has reviewed a total of 585 advertisement submissions. Out of these, 324 were approved, 169 were denied, and 25 were deemed irrelevant. Most denials were eventually overturned following revisions. Silberman claims that Vermont’s regulations are more stringent than those imposed on any other industry in the state, including sports betting.

Turnaround Time for Approvals

Turnaround time for advertising approval is another point of contention. Silberman reported that after submission, responses from the control board may take around a week, “if they respond at all.” The board’s internal review process involves an initial assessment by a designated staff member, with straightforward advertisements processed within 1-2 days. More complex submissions are reviewed by a committee meeting weekly. Pepper estimated that most approvals are completed within eight days, although feedback and adjustments can expedite the process.

Pepper stated, “We give feedback, and they can adjust the statement. It’s a conversation. Within a day, it can be approved.” This collaborative approach aims to facilitate compliance while maintaining regulatory standards.

Industry Support for the Lawsuit

FLŌRA’s lawsuit is bolstered by a wide-reaching coalition of manufacturers, distributors, and retailers across Vermont, highlighting substantial discontent with the existing advertising framework. The collective push for change indicates a growing tension between cannabis businesses and regulatory bodies, emphasizing the need for flexible guidelines that cater to a developing industry.

Conclusion

The ongoing legal battle not only raises questions about free speech rights within the cannabis sector but also highlights the challenges faced by Vermont’s cannabis industry. As regulators and dispensaries strive to find common ground, the outcome of this lawsuit could set a significant precedent for how cannabis advertising is conducted in the state and potentially influence other regions navigating similar issues.