Proposition 64 was passed by Californians in 2016 for the legalization of adult-use cannabis. Among the regulations contained in Proposition 64 is a prohibition of licensed cannabis businesses from “advertis[ing] or market[ing] on a billboard or similar advertising device located on an Interstate Highway or on a State Highway which crosses the California border.”

The Bureau of Cannabis Control (“BCC”), the lead agency in charge of enforcing the law, was given the challenge of interpreting this provision. In light of First Amendment protections for commercial speech, coupled with the federal ban on cannabis, the BCC chose to ban cannabis advertising only on limited portions of highways. Specifically, Section 5040(b)(3) of the California Code of Regulations broadly prevents advertising the sale of cannabis or cannabis products “within a 15-mile radius of the California border on an Interstate Highway or on a State Highway that crosses the California border.”

This regulation was challenged by Matthew Farmer (“Farmer”), arguing that the interpretation by BCC was in conflict with the language of Proposition 64. Farmer argued that the current regulations unnecessarily expose him and his teenage daughter to cannabis advertising. The San Luis Obispo Superior Court granted the petition and ordered the BCC to meet and confer with Farmer to propose an order to withdraw the regulation. This will result in a stricter ban on all cannabis advertising on California Highways.

However, there is an open question regarding how strict the ban will be. The terms “Interstate Highway” and “State Highway” are not defined in the statute, so it is not clear which portions of the highway the updated regulations will encompass. In addition, the term “advertising” is expansive and includes speech that is not commercial in nature, which other states have made carve outs for. These provisions will likely be given more specific meanings after the Farmer decision, while maintaining compliance with the First Amendment.

The BCC was ordered to notify licensees to stop selling space for cannabis advertising and to take down existing ads on roads that cross state borders. As of now, this obligation only affects licensees and does not apply to cities. However, cities should be aware of the BCC’s directive in the event there are any enforcement obligations imposed on them.

For any questions regarding the BCC’s directive and its implications, please contact Douglas L. White at doug@whitebrennerllp.com, Nubia Goldstein at nubia@whitebrennerllp.com, or the White Brenner LLP office at (916) 468-0950.