Ambiguities remain in advertising regulations for cannabis businesses

There’s a lot of confusion around what exactly some of the marijuana business regulations mean in Alaska, leading to missteps and accidental violations.

As marijuana businesses were gearing up for the unofficial marijuana holiday of April 20, many owners were interested in hosting parties or giveaways to celebrate the day. However, under the standing regulations, retail marijuana stores can’t “sell, give, distribute or offer to sell, give or distribute or deliver marijuana or marijuana products” over the internet or as a marketing promotion, among other restrictions. The marketing promotions are tightly controlled, and have a number gray areas.

High Bush Buds, a Soldotna-area marijuana retail shop, received a notice of violation dated April 10 for using an image of a smiley face with the eyes replaced with cannabis leaves and a joint hanging from its mouth on its Facebook page. The image was a violation of the advertising statute, according to the Notice of Violation document submitted to the Marijuana Control Board for its May 15 meeting.

The owner, Patricia Patterson, answered the complaint and said she removed the image, calling it “an oversight.”

“We do not advertise strains or prices,” she wrote. “Our Facebook page is used to let our customers know if we are open and whether we have product on our shelfs.”

The shop received a second notice of violation for planning a event on April 20 with sales at the adjoining Lucky Raven Tobacco and free donuts, while High Bush Buds would have door prizes within the age-restricted retail shop premises. The promotion also violated the advertising regulations, according to the Notice of Violation filing.

Patterson replied that the shop would be “more mindful when advertising or promoting their store in order to stay in compliance” in the future, which would be easy to do by avoiding joint advertising or events with Lucky Raven.

High Bush Buds is not the only shop that has had issues with advertising this year. Another retail shop, Cannabaska in Anchorage, received a notice of violation for offering free pipes and pre-rolled marijuana cigarettes as a giveaway for spending $100 at the shop. Others simply had questions or issues without a formal violation notice being issued, according to Marijuana Control Board documents. Altogether, as of May 3, AMCO has issued 14 notices of violation, out of 1,651 total enforcement calls, requests or general enforcement emails, according to an enforcement report submitted to the Marijuana Control Board for its May 15 meeting.

Alcohol and Marijuana Control Office Enforcement Supervisor James Hoelscher wrote in the enforcement report that the board needs to clarify what is legal for advertising, as the enforcement office can’t always come up with a conclusion for issues. It can take a long time to get guidance from the board, but without it, the state tends to err on the side of caution, he wrote.

“This is a double-edged sword, in the respect that some licensees may feel that we are too harsh when enforcing the regulations and we also have to enforce the regulations consistently with the understanding that it is in the best interest of the health and public safety of the people of Alaska,” he wrote.

He pointed out a number of issues that require board clarification, including reporting crimes on licensed premises, marijuana trade shows, firearms on liensed premises and testing. Advertising and promotional issues include gray areas, such as how cultivators name their strains, Hoelscher wrote.

“We have identified that marijuana strains are given names that can be associated with items that may be attractive to children … and with all of our laws that pertain to keeping marijuana and marijuana product out of the hands of children and anyone under age 21 and only making it legal for only 21 years of age and older, the naming of marijuana strains with names that are associated with things that are made to appeal to children tends to go against the grain of our laws,” he said.

Stakeholders identified the ambiguity as an issue as well. Cannabis business attorney Jana Weltzin of Anchorage in a letter to the Marijuana Control Board cited a number of examples in which cannabis business owners asked for guidance on what constitutes a promotional activity, and enforcement interpreted promotional activities fairly broadly, which hampers business promotion, she wrote.

“The industry has serious concerns regarding businesses’ ability to market and promote their business,” she wrote. “If a business cannot do anything to let the public know it is actually in business and the type of business it is, then the business will not have customers, it will not generate revenue, and it will fail.”

Nikiski resident Dollynda Phelps, co-owner of limited cultivation business Peace Frog Botanicals, raised similar concerns over the April 20 event enforcements, saying it was a double standard for events with alcohol to be able to promote their events broadly but for marijuana businesses to be restricted.

“The celebration of a day and the giving away of stickers or shirts is not a game or contest,” she wrote in an email to the Marijuana Control Board. “So many retailers were scolded on 4/20 about this very issue. It seems so wrong to discriminate against this industry, and these types of discriminatory regulations must be changed.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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