When it comes to discounts, sales, and advertising in commonwealth cannabis, it’s almost as if nobody follows the rules. After all, how the hell could you? It’s a cutthroat market and the regulations are unreasonably strict; as any successful retailer will tell you, if they play it straight, their nearest competitor will surely sleaze it up—and likely win as a result.
This neverending quandary for pot shop operators is reflected in a bulletin released by the Cannabis Control Commission on Friday. Headed “Advertising Compliance regarding Chapter 65,” the memo notes that the agency “has been notified by various Licensees who have open advertising deficiencies that they will not comply with removing identified deficiencies on their public-facing websites until all Marijuana Retailers comply, or because it is the Licensee’s opinion that Chapter 65 amended permitted advertising activities related to websites/online menus.”
As the CCC additionally notes, the recently passed Chapter 65 amended state law “to allow the Commission the option of permitting limited advertising activities within a marijuana establishment, or through an opt-in email list.” But the new law “did not extend advertising or discounting allowances to Licensee websites, nor did it present any immediate substantial change in compliance policy.” “Commission staff,” the bulletin adds, “already assess advertising compliance on how information is relayed to Consumers, and whether that communication is through opt-in forms, or personalized forms of communication such as newsletter or email lists that Consumers sign up for and specifically request.”
According to the CCC, the current law prohibits “advertising through the marketing of free promotional items including, but not limited to, gifts, giveaways, discounts, points-based reward systems, customer loyalty programs, coupons, and ‘free’ or ‘donated’ Marijuana, except as otherwise permitted by [Mass law] and except for the provision of Brand Name take-away bags by a Marijuana Establishment for the benefit of customers after a retail purchase is completed.”
The memo further clarifies: “An advertisement is a public communication used to attract customers or build brand loyalty and may be sponsored by the Licensee itself or by a third-party on behalf of the Licensee. Non-personal messages—i.e., communications that occur without personal contact or feedback from the intended recipient—that are directed to Consumers who did not request that communication and do not allow for an opt out option are also advertisements.”
Regarding direct marketing: “If a Consumer specifically requests to receive information from a Licensee or is provided information personally after entering an ME, then those communications are a personalized message rather than ‘Advertising’ as defined in Commission regulations. Minimal interaction by the Consumer, such as verifying that they are over 21 years old via a website’s age gate, in accordance with Commission regulations, or segregating discounts into a separate portion of the Licensee’s website where Consumers attest to accessing the price list, does not make the communication personalized.”
“Until further notice,” the CCC notes, “when a Licensee broadcasts a reduced or promotional price through its online menus it is engaging in advertising. Commission staff have and will continue to cite Licensees for utilizing the following prohibitive verbiage or actions including, but not limited to” the following: “Sale,” “Discount,” “Special,” “Promos/Promotional Offer,” “Special Offer,” “X% off,” “Showing strike-through of higher prices next to new price,” “Buy X get X free.” Don’t try any cute workarounds either: “The use of different terms that have the same effect—Advertising a discount—also does not shield a Licensee from receiving a citation.”
More details from the CCC below:
Licensees are able to adjust or update the price of Marijuana and Marijuana Products available for sale which may be reflected on a price list or on the Licensee’s website. See 935 CMR 500.105(4)(a)6. Licensees may also offer purchase programs or bundled pricing, but it cannot be communicated in a way that markets Marijuana or Marijuana Products as free, discounted, or promotional (e.g., Buy x get x free).
The medical regulations, 935 CMR 501.000 et. al. do not prohibit Medical Marijuana Establishments from Advertising discounts, sales, coupons or other price reductions for medical Marijuana and Marijuana Products offered to Patients for sale. Similarly, CMOs are not prohibited from Advertising discounts, sales, etc. for medical Marijuana and Marijuana Products offered to Patients for retail sale. However, CMOs must take necessary steps to ensure that any advertised or marketed discount, sale or other reduction in price is clearly indicated as being only applicable to medical Marijuana and Marijuana Products intended for retail sale to Patients and not being offered for adult-use Consumers.
As the Commission enters into another regulatory round where proposed policy changes and potential impacts are publicly discussed, this bulletin further serves as a reminder to the industry that policy discussions do not become practice until and if promulgated through regulation. Similar to advertising, proposed policy or contemplated regulatory changes to topics including but not limited to testing, the licensing processes, and agent registration will remain as currently promulgated until replaced by new regulations.
Violations of state Marijuana law, including engaging in prohibited advertising activities, may result in the issuance of fines or up to suspension or revocation of a License. See 935 CMR 500.450(3), (13) and 501.450(3), (13).
