Yesterday, we saw President Trump issue an Executive Order instructing various government agencies to take steps to move marijuana from Schedule I (an illegal controlled substance with no medical uses and a high degree of potential abuse) to Schedule III, which includes many other drugs, such as ketamine and Tylenol with codeine, that require a prescription and FDA approval. While a rescheduling to Schedule III may have an impact on research and on marijuana’s medical uses, broadcasters need to continue to take a very cautious approach to marijuana advertising while the details of any possible changes unfold, as it is likely that, even after any rescheduling that makes marijuana a Schedule III drug, advertising will still be restricted under federal law.
While many states have, as a matter of state law, legalized medical and even recreational marijuana use, there is still concern for broadcasters accepting advertising for its sale and use. As we have noted many times before (see, for example, our articles here, here, and here), there is a concern that the sale and distribution of marijuana, even when legal under state law, remains a felony under federal law. Under 21 USC § 843 (b) and (c), to use communications facilities, including radio and the internet, to facilitate any sale of any federally controlled substance is a felony. This should be of particular concern to broadcasters, which are federally regulated. If the FCC is faced with a complaint about a broadcaster “facilitating” the sale of marijuana through running advertising – an act illegal under federal law – the FCC might feel a need to take action against the broadcaster.
A move to Schedule III does not automatically solve that issue, because marijuana would still be a “controlled substance” and any sale would be of an unapproved new drug that has not been FDA-approved or registered with the DEA for distribution, thus still making the sale an illegal distribution of a controlled substance. The manufacture, distribution, and possession of marijuana would still be illegal under the federal Controlled Substances Act unless its use in an approved product with medical benefits obtained via a prescription is approved by the FDA. From what we have been able to find, state medical marijuana referral programs would not qualify as a “prescription” under federal rules unless the drug being prescribed has been approved by the FDA.
We don’t claim to be lawyers who are experts in FDA law, so these conclusions need to be reviewed and vetted by those who are, we have already seen many articles from lawyers who practice FDA law and from other legal commentators addressing the rescheduling. The consensus seems to be that many steps are still necessary, including action by various government agencies, before the full effect of the Executive Order is known. But all of these articles urge caution – as the order does not resolve the fundamental disconnect between federal and state laws – possession and distribution of Schedule III drugs will remain a felony (perhaps with lesser penalties, but a felony nevertheless) under federal law unless specific drugs are authorized by the FDA following specific administrative procedures. Legalization under state law does not affect this fundamental disconnect as long as marijuana remains a scheduled drug.
From our review, Schedule III drugs include many that require prescriptions to use – including anabolic steroids and barbiturates – not exactly the kind of drugs one usually sees advertised on TV, although you may see ads for FDA-approved drugs containing Schedule III drugs, such as ketamine-based Spravato. Schedule III drugs generally require FDA approval before marketing and are subject to restrictions as to how they are distributed. Warning labels may be required. Federal registration is required for those who dispense and manufacture these controlled substances, and users must be tracked as well unless the Attorney General decides that such user registration is not in the public interest. These kinds of restrictions are certainly not in line with the ways that marijuana is sold in states that have “legalized” it under their state laws.
The rules for marijuana under Schedule III would be different than the rules that apply to alcohol, or even hemp-based CBD. Neither of these substances are on the schedules of controlled substances. CBD (which contains less than 0.3% THC, the psychoactive ingredient in marijuana) was removed from all federal drug schedules as a result of the 2018 Farm Act (see our articles here and here). Even with its removal from the schedules of controlled substances, the FDA and FTC expressed concerns about advertising CBD’s use in a way that suggested that it had medicinal properties, and the FDA does not authorize it for use as a food additive (see, for instance, our articles here and here). While the FDA promised to review those restrictions soon after the Farm Bill was enacted, it finally threw up its hands two years ago and decided that it could not determine that CBD was safe as an additive to foods and beverages, or that health claims could be made (other than for the limited drugs actually approved by the FDA derived from the cannabis plant, such as Epidiolex). The FDA instead asked that Congress provide instructions as to the rules that should be adopted in these areas (see FDA announcement here). Of course, Congress has not yet acted to address these concerns – and in fact it recently moved to tighten CBD laws by restricting the amount of THC that can be contained in legal products – so much so that some CBD producers claim that their operations will be shut down if these new requirements are implemented in the next year, as required by the new statute. The new Executive Order, however, directs White House staff to work with Congress to allow Americans to benefit from access to appropriate full-spectrum CBD products while still restricting the sale of products that pose serious health risks. But that still leaves the matter up to Congress to act, or not act.
If CBD, which is not a scheduled controlled substance, is still subject to these federal concerns more than 7 years after being de-scheduled, one can only imagine the concerns that will continue to be expressed about marijuana distribution and marketing even if it is moved to Schedule III. Already, there have been concerns about the President’s Executive Order from certain interest groups opposed to any relaxation of marijuana laws, and we may see more before any of the actions directed by the Executive Order can be implemented.
Perhaps these concerns are overblown, and any rescheduling will be quickly accompanied by a more hands-off regulatory environment. But the full impact of the Executive Order will not be felt until all of the administrative agencies involved take action – and even then, specific uses of marijuana may need individual approval before sale and marketing of any marijuana product is “legal” under federal law. We understand that in a tight market for broadcast advertising, patience about taking money from advertisers in a new product category is hard, but there are still many unknowns. While we have heard of stations that have ignored advice like that which we have given in our past articles and have run ads for marijuana in states where it has been legalized at the state level, as noted above, there is real risk for FCC licensees. While we have not heard of government action against these stations in recent years, it may just be because no one has complained yet. Most big broadcasters, and most big tech platforms who are subject to the same felony laws, still restrict marijuana ads. Change takes time – so broadcasters should not just yet be counting on any immediate windfall from an influx of marijuana advertising dollars. Many details remain to be worked out, and many real issues need to be resolved. Caution remains necessary.
