David Oxenford

David Oxenford, Partner, Wilkinson Barker Knauer LLP 

Broadcasters have largely been smoked out from cashing in on the “green wave” of expanding marijuana legalization across the U.S. Could CDB oil, an offshoot product seemingly being sold in every state in the country, represent a safer way for broadcasters to capitalize on the massive cannabis industry? Not so fast, says one well-versed broadcast attorney.

“In the last few months, we probably have had more questions about advertising for CBD products than any other topic,” attorney David Oxenford says in a Broadcast Law Blog post. “Unfortunately, the state of the law on CBD at the current time is particularly confusing.”

CBD, short for cannabidiol, is a derivative of the cannabis sativa plant. Containing low concentrations of the psychoactive chemical known as THC, it is being used to treat a variety of ailments including anxiety, cognition, movement disorders and pain.

Because marijuana remains illegal under federal law, most broadcasters have just said no to airing pot ads. But CBD is in a different category, at least if it is hemp-derived CBD with low levels of THC.

In examining the legal risks of airing ads for CBD products, Oxenford points to the Farm Act, passed in late 2018 which removed hemp (and hemp-derived CBD) from Schedule I, making its possession no longer illegal under federal law – as long as the THC level is less than 0.3%. “ But CBD derived from marijuana remains an illegal Schedule I drug, so it is important to know how the CBD is being produced, as it helps determine whether the CBD is legal or illegal,” he points out. Making the matter even more confusing, there isn’t any legal mechanism for widespread commercial production of CBD, except in limited circumstances. And whether the production fits under these limited circumstances is difficult to discern when a broadcaster is approached to advertise a CBD product, Oxenford adds.

In addition, there are other issues that must be weighed in any advertising decision. Chief among them is the fact that the U.S. Department of Agriculture has yet to approve individual state plans to regulate the sale and distribution of these products and it doesn't seem likely they will until much later this year. “Until the USDA has adopted rules for processing state plans, and has approved some of those plans (as well as a federal plan for states that do not act), the only manufacturing of CBD that is permitted is production authorized under a prior Farm Act from 2014,” Oxenford writes. But the 2014 Act only permitted hemp production projects authorized by a state or a university as part of a research program.

The reason for all this regulatory oversight is “to make sure that consumers are actually getting what they think they are buying,” Oxenford elaborates, and to reduce the risk that marijuana products (or hemp products with greater than .3% THC) become available for public consumption.

Some broadcasters, after doing their homework and seeking legal advice, may be able to satisfy themselves about the question of whether the CBD product that they are being asked to advertise was legally produced and is otherwise lawful, Oxenford concedes. In fact, Inside Radio has heard reports of TV and radio stations in Tulsa and Oklahoma City advertising CBD oil with both spot and personality endorsements for the past several months. “But that does not end the broadcaster’s consideration as to whether to run a CBD ad,” Oxenford underscores. There may be far more serious questions to consider like whether a particular type of CBD may be illegal under federal law. For example, the Food & Drug Administration still prohibits the sale of CBD (hemp-derived or otherwise) as a food additive or oral supplement.

“But even if a broadcaster can satisfy itself that the CBD comes from legal sources, is not to be ingested, and does not make unverifiable health claims, this does not end the inquiry,” Oxenford contends. Different states have different laws on CBD and most restrict the sake to minors. Sizing up the thorny, multi-faceted issue, Oxenford suggests stations make decisions on whether to accept CBD ads only after careful consideration. “There are no clear answers on CBD advertising yet,” he concludes. “Consider these factors, consult with your own attorney and give some careful thought as to whether or not to accept CBD advertising on your station, and watch for developments as they occur in the coming months.”