California lawmakers have proposed a number of legal changes for the state’s cannabis market this year. Among them is a proposal to ban a wide array of images and terms from product labels. The proposal, Assembly Bill 1207, was passed by both the California Assembly and California State Senate on Sept. 14 and is headed to Gov. Gavin Newsom for his signature.
Assembly Bill 1207 would add new definitions to the phrase “attractive to children,” as used in the state’s commercial cannabis laws. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), passed in 2017 to implement the state’s adult-use cannabis market and integrate its rules with the medical marijuana market, already stipulates that “packages and labels [used on cannabis products] shall not be made to be attractive to children.”
Regulations promulgated to implement that law elaborate on what this means, saying:
Any advertising or marketing … shall not use any images that are attractive to children, including, but not limited to:
- Cartoons;
- Any likeness to images, characters, or phrases that are popularly used to advertise to children;
- Any imitation of candy packaging or labeling; or
- the terms “candy” or “candies” or variants in spelling such as “kandy” or “kandeez.”
So, while the existing state statute might be open to interpretation in terms of what is “attractive to children,” the regulations that lawmakers approved to implement the statute make it fairly clear exactly what is prohibited from appearing on the label of a cannabis product.
Nonetheless, AB 1207 would clarify in statute that “attractive to children” includes a wider array of items soon to be forbidden. These include:
- Images of any of the following:
- Cartoons, toys, or robots;
- Any real or fictional humans;
- Any fictional animals or creatures; or
- Fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product.
- Any likeness to images, characters, or phrases that are popularly used to advertise to children;
- Any imitation of candy packaging or labeling, or other packaging or labeling or cereals, sweets, chips, or other food products typically marketed to children;
- The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandee”;
- Brand names or close imitations of brand names of candies, cereals, sweets, chips or other food products typically marketed to children;
- Any other image or packaging that is easily confused with commercially available foods that do not contain cannabis and are typically marketed to children;
- Anything else that the department [of cannabis control] determines in regulation to be attractive to children; or
- Anything else that is attractive to children in light of all relevant facts and circumstances.
While some of the items included in this new definition overlap with those found in California’s existing regulations, others present potential problems or introduce legal uncertainty.
For instance, item eight, which bans “anything else” that prospectively could be interpreted as “attractive to children in light of all relevant facts and circumstances,” is a nebulous and arbitrary legal standard that could be used to penalize disfavored cannabis licensees even when they act in good faith to avoid marketing to children. Regulatory standards this vague can create more havoc than order.
In other cases, the changes could result in a regulatory taking by depriving cannabis licensees of the right to use existing marketing schemes into which they have invested significant money. For instance, the proposed ban on using any images of human beings would prevent a label from depicting farmers cultivating cannabis. Numerous existing brands use this kind of image on their label, including family farms that portray images of their own families farming cannabis. Under the new proposed rules, no farm owner would be able to appear on their own label.
It is unclear why state lawmakers believe that the appearance of any form of human being on a label would make the item attractive to children. Interestingly, many California wine labels display an image of the owner or a brand ambassador, such as 19 Crimes does with Snoop Dogg. MAUCRSA was written, in part, to parallel some aspects of the California wine industry by including the appellation of origin on the packaging to distinguish one growing region from another. Yet, California lawmakers have not banned images of human beings from wine labels.
California Attorney General Rob Bonta warned last year that cannabis products had been sold in packaging “nearly identical to…Cheetos, Fruity Pebbles, and Sour Patch Kids.” Senate Floor snalyses of the bill indicate proponents of the legislation are concerned child exposure to cannabis products has increased. However, legislative staff preparing the analyses note that the products highlighted by the attorney general may exist primarily in the illicit market. “For unlicensed products,” said staff, “this bill doesn’t have an effect, as unlicensed cannabis cultivators, manufacturers, retailers [and] distributors are already in violation of the law.”
California’s cannabis market structure has suffered from many problems, including over-taxation and overregulation that have made it difficult for legal businesses to compete with the black market. Lawmakers ameliorated some of those problems last year when they followed Reason Foundation recommendations to change some of the state’s marijuana tax structure. The new bans included in Assembly Bill 1207, however, would only add to the problem of overregulation without resolving the concerns of bill sponsors.