DEA Shift on Marijuana Might Not Spark Cannabis Broadcast Ads

Without some sort of additional regulatory action, the proposed rescheduling would likely mean marijuana would fall in the same category as prescription drugs such as ketamine or Tylenol with codeine, said Paul Josephson of Duane Morris’ cannabis industry group. “It doesn’t legalize recreational sales.”

A rescheduling of marijuana is considered a possibility due to a late August Department of Health and Human Services letter to the Drug Enforcement Administration that reportedly recommended reclassifying marijuana’s status from Schedule I -- nominally illegal -- to the less restrictive Schedule III. DEA confirmed the existence of an HHS letter on marijuana scheduling but didn’t elaborate on the details. “We can confirm DEA received a letter from the Department of Health and Human Services providing its findings and recommendation on marijuana scheduling, pursuant to President Biden’s request for a review,” said a DEA spokesperson.

The federal classification of marijuana as an illegal drug has largely kept broadcasters from carrying cannabis ads even in states where recreational use is legal -- they can’t be certain the FCC won’t hold it against them when their licenses come up for renewal. Foster Garvey attorney Brad Deutsch told us he believes airing carefully pitched ads for marijuana products by broadcasters only in localities where they're legal is of minimal risk to broadcast licenses, but he conceded he’s in the minority. The FCC has never taken action against broadcasters for marijuana ads, but also has never taken a position on them, Audio Division Chief Albert Shuldiner told broadcasters at April’s NAB Show. “We suggest that broadcasters consult with their regulatory counsel about the potential risks of running those types of ads and leave it at that," he said then. “Because broadcasters are federal licensees, there is a heightened concern that those federal licenses could be jeopardized,” wrote Wilkinson Barker broadcast attorney David Oxenford in a blog post on why such advertising is considered risky under current rules. NAB declined to comment.

Broadcast industry executives said reclassification to schedule three could allay concerns about airing marijuana ads, but cannabis industry attorneys said the change would be limited to FDA-approved pharmaceutical uses of marijuana. That wouldn’t include the dispensaries and other businesses commonly associated with the recreational cannabis industry, or even current medical marijuana businesses, said Eric Berlin of Dentons. Rescheduling alone would leave those businesses operating under the same legal uncertainty they endure now -- prohibited by unenforced federal laws but authorized by some state statutes, Berlin said. Without additional guidance from DEA on recreational drug businesses or from the FCC on advertising such businesses, broadcasters likely would face the same concerns in carrying recreational marijuana product ads that they do now, attorneys said.

The reclassification could have an upside for broadcasters in the form of ads from large pharmaceutical companies, cannabis industry lawyers said. They are “probably the only ones that can truly afford to develop any kind of cannabis drug after it’s rescheduled,” said Harris Bricken attorney Hilary Bricken, in a blog post Wednesday. For a marijuana product to be sold as a Schedule III pharmaceutical product, it would need to be developed and then go through FDA approval before being prescribed, said Dentons attorney Amy Rubenstein. That product “would be subject to the same direct consumer advertising restrictions and allowances as any other Schedule III drugs” and would require “a company that actually has the budget to be doing that” such as a big pharmaceutical corporation, she said. Broadcasters already run many ads for pharmaceuticals, so they would be well positioned to carry ads for future marijuana Schedule III drugs, attorneys said.

It isn’t a certainty that DEA will reclassify marijuana as HHS allegedly requested, but cannabis industry attorneys said some sort of move does appear likely. The White House’s public push for it, and the upcoming presidential election appear to put pressure on DEA, they said. It’s also unlikely that HHS would have announced the scheduling letter without floating the matter behind the scenes, Rubenstein said. HHS Secretary Xavier Becerra posted the announcement on X (formerly Twitter) at 4:20 p.m., a time of day that holds special significance to marijuana enthusiasts. “I don't think they'd be that kind of cheeky and sort of cute about it if they didn't have a legitimate expectation of rescheduling,” Rubenstein said.

Most attorneys said they expect the move to happen about early 2024, but variables such as a possible hearing process or likely lawsuits could delay the matter. It “certainly suggests that the federal government is finally turning the corner and going to come to a more realistic policy around cannabis,” said Josephson.