Memo seemingly goes against grain of federal policy
By Lauren Rudick
It may be “illegal” to mail cannabis advertisements through the United States Postal Service, but for now, repercussions appear to be just smoke and mirrors.
Last November, an Oregon postal district issued a memorandum to newspaper publishers, warning them that the mailing of publications containing advertisements for state-legal cannabis dispensaries and manufacturers constitutes a federal offense under the Controlled Substances Act and is reportable to the DEA. This statement infuriated a handful of Democrats in Oregon’s congressional delegation, since Oregon recently legalized marijuana for adult use and has enjoyed a successful medical marijuana program since 1998.
Many of the state’s regulations are positioned to serve as a shining example for the state-legal cannabis industry. The USPS seemingly went out of its way to admonish mailers that had previously been allowed, and failed to communicate a fully-integrated policy consistent with current federal priorities.
Oregon’s vexed lawmakers immediately issued a request to the USPS, seeking clarification on its position and reminding the agency that under the Rohrabacher-Farr amendment to the federal appropriations bill, the DEA has no funds to prosecute — or even investigate — state-compliant medical marijuana operations. Lawmakers urged the USPS to dispense with hollow threats, and to fall in line with current legalization and decriminalization initiatives.
Two weeks later, in response to Oregon’s lawmakers, the USPS issued a national policy confirming the non-mailability of cannabis advertisements. Refusing to specifically opine on whether the appropriations bill prohibits the federal government from enforcing the mailability ban, the USPS stated that only Congress can legalize cannabis advertising. The USPS further informed mailers that postmasters are not empowered to reject or stop mail, but instead, should advise mailers about the legal consequences of mailing cannabis advertisements. If the mailer persists, postmasters must refer the matter to a local inspection service, which ostensibly would kick the matter to local law enforcement. For advance decisions on mailability, the USPS referred prospective mailers to the Pricing and Classification Service Center (PCSC) in New York.
One might imagine that the PCSC would have been inundated with calls from publishers and businesses who have been successfully advertising in newspapers for nearly two decades. After all, numerous publishers rely upon the mail as a comparatively inexpensive method of delivery, and are frequently fueled by cannabis advertising revenue. In 2010, the New York Times reported that many newspapers rush to “woo” marijuana providers and “make no apologies” for the success achieved through print advertisements. Likewise, local businesses depend on mailed publications to gain footing in an extremely competitive market. The surge in cannabis advertisements is hardly news; so the USPS’s apparent regression is confusing, at best.
Yet, since the agency’s fateful national policy letter, there has been no spike in inquiries to PCSC; the New York service center says it has received three or four calls. And reportedly, none of those callers sought a determination about the propriety of their mailings. Instead, callers sought information about door-to-door sales of medicine and other peripheral matters that do not implicate Controlled Substance Act advertising regulations. The matter is “hardly a blip” on PCSC’s radar. To date, no mail has been stopped, and not a single inspection service has been notified of a mailing containing cannabis ads, the PCSC reported.
This isn’t the first advertising hurdle for the cannabis industry. For instance, on the heels of a victory for High Times regarding the placement of its publications on newsstands, High Times is lead plaintiff in a new lawsuit challenging Colorado’s restrictions on cannabis advertising as unconstitutional violations of free speech and due process. If the lawsuit involved a typical content-based law regulating the advertising of a “vice” (such as liquor or tobacco), Supreme Court precedent should dictate that the regulations presented in Colorado be invalidated; over the past 40 years, the Supreme Court has generally trended against state regulation of commercial speech. But marijuana’s classification as a Schedule I drug gives the matter an unprecedented quirk, which hopefully will not threaten the lawsuit’s viability.
The USPS’s recent pronouncement banning the mailing of cannabis advertisements is not a content-based restriction consistent with prior advertising cases. In this instance, the USPS did not tell cannabis advertisers not to advertise, nor did the agency seek to impose a content-based restriction on advertising. Instead, the USPS warned mailers that the U.S. mail may not be used to solicit sales in violation of federal law. But the USPS cannot stop mailers, and it cannot censor mail. And the USPS readily confirmed that the Controlled Substances Act does not prohibit advertisements that advocate the use of cannabis, and do not attempt to facilitate an actual transaction — matters that lie at the heart of the First Amendment. While it may seem prudent to pull pure advertisements, businesses operating in compliance with the Cole Memo (which delineates how to avoid prosecution, and is notably silent on advertising) — as well as those on the front lines of the USPS’s pronouncement — have deemed the matter a “low priority.”
Lauren Rudick represents investors and startup organizations in all aspects of business and intellectual property law, specializing in cannabis, media and technology. Her law firm, Hiller, PC, is a white-shoe boutique firm with a track record for success, handling sophisticated legal matters including business and corporate law.