Pot ads silenced

Monday, March 10, 2014 4:48 PM

Colorado marijuana retailers and a leading pot magazine are battling state regulations that prohibit marijuana advertising outdoors and on TV, radio and print outlets that may draw a young audience.

Marijuana magazine High Times and recreational pot sellers say the state regulations unconstitutionally infringe on their free-speech rights. They name Gov. John Hickenlooper and Barbara Brohl, executive director of the Colorado Department of Revenue, as defendants.

David Lane, a Denver attorney representing those challenging the rules, said the First Amendment protects commercial speech as well as political speech.

“If a retailer does want to advertise, the state of Colorado can’t stand in their way,” he said.

The lawsuit was filed Feb. 10 in the U.S. District Court for Colorado.

The case has the potential to reshape the ability of recreational marijuana retailers to advertise in mass media outlets. And in addition to pressing their free-speech claims, media properties could benefit from the millions of dollars flowing through the marijuana industry.

It’s another example of the shifting ground beneath Colorado marijuana businesses. Already, pot entrepreneurs face complex banking regulations, widely varying local rules and mixed signals from the federal government, which still views marijuana as a highly dangerous Schedule I drug.

Chief Judge Marcia Krieger on Feb. 14 denied a preliminary injunction sought by the media companies, saying they lacked standing to sue. Krieger ruled the media companies had not demonstrated the regulations had harmed them.

Lane said he’s working to amend the lawsuit to add more plaintiffs, including marijuana retailers. Westword, a Denver alternative weekly newspaper, was listed as a plaintiff but will pull out of the lawsuit, Lane said, leaving High Times’ parent company, Trans-High Corp., as the lone media plaintiff.

Marijuana retailers are adamant they have the right to advertise.

“They’re trying to put a stranglehold on this business,” said Greg Viditz-Ward, owner of Telluride Green Room. “Those laws that state we can’t advertise like any other business, they’re illegal.”

Viditz-Ward said the regulations don’t significantly affect his retail marijuana business, which relies on word of mouth.

Jonny Radding, owner of Durango Organics, a medical dispensary and grower, said it’s important to be able to get information out to the public.

“From a business standpoint, it’s important for us to be able to advertise,” he said.

Radding said he intends to add recreational marijuana to Durango Organics’ business, but he’s waiting for the city of Durango to allow recreational operations.

Medical marijuana businesses are not subject to the advertising restrictions.

The state regulations were crafted and implemented by the Department of Revenue, part of a range of rules targeting the nation’s first experiment with recreational marijuana.

The regulations seek to discourage advertising in print, radio and TV media where the audience may include 30 percent or more minors, in this case people younger than 21. The rules appear to place the burden of demonstrating an outlet meets the 30 percent threshold on the marijuana retailers.

Colorado also prohibits outdoor advertising, and bars its marijuana businesses from targeting potential consumers in other states.

Lane said that’s not the state’s job to restrict advertising.

“Our First Amendment freedoms are not residing in the tender hands of government bureaucrats in the Department of Revenue,” he said.

A Department of Revenue spokeswoman did not return a message seeking comment. Requests for comment to Gov. John Hickenlooper’s office also were not returned.

While state and federal regulators are adjusting to their new roles overseeing the burgeoning marijuana industry, Lane said the industry’s free-speech cause is clear.

“There are retailers that would like to advertise, but they’re being chilled by the regulations in their ability to advertise,” he said. “Anytime the government puts restrictions on free speech, it’s an eyebrow-raiser.”