United States: High Stakes For Marijuana Businesses: New Massachusetts Advertising & Marketing Regulations

Massachusetts recently provided parameters within which marijuana businesses may promote and market themselves and their products. At first blush the new regulations may seem straightforward, but there are some significant ambiguities and subjective standards that could create unlooked-for exposure for businesses. Due to some quirks in the Massachusetts consumer protection laws, strict compliance with the regulations will help limit significant exposure to consumer protection claims.

Significant Room for Disagreement on Compliance

Limitations on Branding & Logos

In Massachusetts, marijuana businesses will be permitted to use logos to promote their products, with the exception of medical symbols, images of marijuana or marijuana paraphernalia, and the incorporation of "colloquial references" to cannabis and marijuana in the logos.

The ability of out-of-state companies to market their well-known brands in Massachusetts may be affected. A review of marijuana brands demonstrates that terms such as "high," "baked," "jane" and other borderline terms are fairly popular in this space. Brand recognition is extremely important in the industry and these restrictions may impact the ability of businesses to capitalize on the fame of their already existing marks.

The prohibition on "images of marijuana" in company logos also presents a significant limitation and potential hurdle for established brands entering the Massachusetts market. It will behoove new businesses seeking to establish a brand and logo to avoid investing time and money on a branding effort that could ultimately be determined to violate the Cannabis Control Commission (CCC) regulations.

Limitations on Advertising & Marketing

Marijuana establishments may engage in reasonable marketing, advertising and branding, within certain parameters. Of course, as with any other industry, deceptive, false, misleading or untrue advertisements are prohibited. To comply with the agency regulations, advertisements, marketing and branding must not jeopardize public health, welfare or safety and not promote the use of marijuana by individuals under 21 years of age.

The statement "Please Consume Responsibly" must be included on the face of the ad along with at least two of the following warnings:

  • "This product may cause impairment and may be habit forming."
  • "Marijuana can impair concentration, coordination and judgment. Do not operate a vehicle or machinery under the influence of this drug."
  • "There may be health risks associated with consumption of this product."
  • "For use only by adults 21 years of age or older. Keep out of the reach of children."
  • "Marijuana should not be used by women who are pregnant or breastfeeding."

This warning must be included as well:

"This product has not been analyzed or approved by the Food and Drug Administration (FDA). There is limited information on the side effects of using this product, and there may be associated health risks. Marijuana use during pregnancy and breast-feeding may pose potential harms. It is against the law to drive or operate machinery when under the influence of this product. KEEP THIS PRODUCT AWAY FROM CHILDREN. There may be health risks associated with consumption of this product. Marijuana can impair concentration, coordination, and judgment. The impairment effects of edible marijuana may be delayed by two hours or more. In case of accidental ingestion, contact poison control hotline 1-800-222-1222 or 911. This product may be illegal outside of MA."

In addition, marijuana businesses are prohibited from advertising that their products are safe or that they have therapeutic effects unless the CCC has determined that there is substantial evidence or clinical data to support the claims. Businesses should be cautious about making such claims in any event, as they could be construed as warranties.

For the precise requirements on packaging and labels, see 935 CMR 500.105(5)-(6). Packages also must display easily recognizable marks issued by the CCC to warn that products contain marijuana and are not safe for minors.

A marijuana business may display samples in secure locked cases and allow consumers to inspect a sample, but may not allow consumers to consume or use it on-site. The business may post prices in the store and respond to telephone inquiries about pricing, in addition to creating a catalogue of prices that can be posted on its website. Giveaways are not allowed: the use of gifts, coupons and free or "donated" marijuana is not allowed, nor are promotional items such as t-shirts, cups and "novelty" items.

Consumer Protection Violations Established via Safety Regulation or Warranty Breach

Massachusetts's consumer protection statute, known as Chapter 93A, has teeth. Any act or practice found to be unfair or deceptive can constitute a violation, entitling a successful claimant to actual damages (or $25), which can be doubled or trebled for willful violations, along with reasonable attorneys' fees. In addition, liability has been found even in cases where the existence of an actual injury is highly questionable.

Under regulations promulgated by the Massachusetts Attorney General, any act or practice is, as a matter of law, a violation of Chapter 93A if it does not comply with existing "statutes, rules, regulations or other laws, meant for the protection of the public's health, safety or welfare promulgated by the Commonwealth or any political subdivision thereof" if intended to protect consumers. 940 CMR 3.16(3).

The regulations do allow for preapproval of packaging and labeling by the CCC, which could provide a limited "safe harbor" to businesses that request and obtain it. However, the regulation specifies that the preapproval process is not a substitute for compliance with labeling requirements. It may at least, if employed, provide a defense to claims of willful or knowing violations.

With all of these potential sources of exposure, marijuana establishments should maintain a close watch on all advertising, marketing, branding and promotional activities, which will be critical to managing risk exposure. The only safe bet is that consumer advocates and members of the plaintiffs' class action bar will be watching for any potential violation of these regulations.

This Wilson Elser Insight is a summary of an article by the authors presented to the National Cannabis Industry Association's Finance & Insurance Committee. Click here to read the full article .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions