The state of New York has the potential to be one of the largest recreational cannabis markets in the USA and the entire world. With ~20 million residents total and an estimated 1.6 million consumers reporting using cannabis in the past month, NYS is both a lucrative and exciting opportunity for companies and marketers. In this article (the first of a 5 part series) we examine the history and the present-day laws and regulations surrounding cannabis in New York state, with a focus on marketing and advertising.
The History of Medical Cannabis Legalization in New York
Cannabis has been legal for medical and therapeutic purposes in the state since 2014. The Compassionate Care Act, signed by Andrew Cuomo, allowed for the use of medical cannabis to treat a range of serious medical conditions, including cancer, HIV/AIDS, Parkinson’s disease, and multiple sclerosis.
Under the Compassionate Care Act, patients with qualifying medical conditions can obtain medical cannabis with a recommendation from a healthcare provider who is registered with the New York State Department of Health. Medical cannabis can be obtained from licensed dispensaries, which are regulated by the Department of Health.
There appear to be over 40 medically-licensed dispensaries in the state at the date of publishing, according to the New York government website. These retailers include names like MedMen, Citiva, Columbia Care, Curaleaf, Etain, Fiorello, NYCANNA, PharmaCann, Valley Agriceuticals and Vireo Health.
The History of Recreational Cannabis Legalization in New York
The Marihuana Regulation & Taxation Act (MRTA) was signed into law on March 31, 2021, legalizing the possession of adult-use recreational cannabis for all adults over the age of 21 in New York state. One of the most notable aspects of the MRTA is its emphasis on social equity. The law includes provisions to ensure that individuals from communities that have been disproportionately impacted by the war on drugs have access to opportunities in the cannabis industry (with a goal of ensuring that at least 50% of licenses are issued to individuals from communities that have been disproportionately impacted.
On June 1, 2022, the New York Office of Cannabis Management released its proposed cannabis marketing regulations for a public comment period which ended on August 15th of last year. On November 21st, the OCM published revised regulations, which are now undergoing a second public comment period.
Cannabis Advertising and Marketing Regulations in New York State
The MRTA legalizes the sale and distribution of cannabis in NY, but also proposes strict regulations on advertising and marketing of the plant and its derivatives. The law makes clear that any marketing and advertising should “not jeopardize public health or safety, promote youth use, or be attractive to individuals under twenty-one”. These strict regulations are mostly in line with other cannabis-friendly jurisdictions in the Northeast US including New Jersey, Massachusetts and Connecticut.
The state’s Cannabis Control Board will be responsible for overseeing the industry and enforcing the regulations. Let’s take a look at the proposed Packaging and Labeling & Marketing and Advertising Guidance for Adult-Use Licensees in New York state:
1. Disclaimers
New York requires certain language and disclaimers be present on all advertisements. Any cannabis promotion must include the following statement (verbally or in writing, depending on the medium): “For use only by adults 21 years of age and older. Keep out of reach of children and pets. In case of accidental ingestion or overconsumption, contact the National Poison Control Center hotline 1-800-222-1222 or call 9-1-1. Please consume responsibly.”
In addition, any marketing or advertising of cannabis or cannabis products must include one of the following phrases in its entirety in a rotating manner:
- Cannabis may cause impairment and may be habit forming
- Cannabis can impair concentration, coordination and judgment. Do not operate a vehicle or machinery under the influence of cannabis
- There may be health risks associated with consumption of this product
- Cannabis is not recommended for use by persons who are pregnant or nursing
All warnings in print or digital advertisements must be displayed:
- in English
- in Times New Roman, Calibri, Arial or Helvetica font
- in text no smaller than size 6 font
- bolded
- legible, unobscured, and visible to the consumer, and
- in a bright yellow text box so as to stand out from the surrounding advertisement.
In addition, the New York State HOPEline phone number, text number, and website or QR code on any advertising or marketing materials must be displayed in visual media or read into audio media.
2. Age-Specific Restrictions
A licensee may advertise cannabis by television, radio, print, internet, mobile apps, social media, and other electronic means. However, New York’s proposed regulations require that a license holder have “reliable evidence” that 90% of the audience of any advertisement or promotion is reasonably expected to be 21 years old or older. This is similar to Connecticut’s law that requires the same and Massachuesett’s law that requires 85% of viewers to be over the legal age. Additionally, these rules require that digital advertisements utilize software to keep those under the age of 21 from viewing the promotions. A licensee must keep records and documentation of all advertising materials to ensure compliance with the advertising rules.
Cannot depict (for example): animals, balloons, confetti or glitter, superheroes, video game references, race cars, dinosaurs, imaginary creatures or people, characters or celebrities from children’s shows or books.
The regulations give an example that a cartoon-like depiction of an animal might be attractive to individuals under 21, but a silhouette of an animal might not. Meaning that not all references to animals are banned, only those that could reasonably be considered appealing to those under the age of 21.
3. Out-Of-Home Advertising
With the exception of cannabis retailers and delivery services, all cannabis businesses are prohibited from purchasing billboards in New York. This means that for consumer recreational brands that do not have physical storefronts, there is no out-of-home advertising allowed legally. Brands cannot give out “handbills” or participate in other similar print or guerilla marketing. Promotions cannot be within or readily observed within 500 feet of an elementary or secondary school, recreation center or facility, childcare center, playground, public park, or library.
For cannabis retailers and delivery services interested in purchasing billboards or other OOH ad space, there are some strict and specific regulations to follow:
- The only information or visuals that can be displayed on the billboard is the location of the cannabis business, and may only contain: the company’s name, address, phone number, e-mail address, telephone number, and the nature of the business.
- All OOH advertising must be affixed to a building or permanent structure and only two such signs are permitted per location of the cannabis business (meaning that most billboards will likely be close to the location they are advertising for).
- Signs cannot include mottos, selling messages, or any other non-essential text.
- Signs cannot be displayed in an arena, stadium or other sporting venue, a fair that receives state funding, a video game arcade or a shopping mall (unless the sign is alerting individuals to the location of a retail dispensary inside the mall).
4. Branding and Merchandising
New York’s proposed regulations include some strict and specific restrictions on branding and merchandising. Fonts and colors used in advertisements are limited. The following branding elements are prohibited as they are defined as appealing to individuals under 21 years of age:
- Cartoons; bubble-type or other cartoon-like font
- Bright colors that are “neon” in appearance
- References and imitations of food, candy (kandy, kandeez, etc), soda, drinks, cookies or cereal (with the exception of cultivar names or a licensee’s name)
- symbols, images, characters, public figures, phrases, toys, or games that are commonly used to market products to individuals under the age of 21
- Mascots or depictions of persons under the age of 21
- The term “organic” is banned in cannabis marketing as “there is no organic standard yet established for cannabis that is recognized federally”
- The term “craft” is not permitted in cannabis marketing unless the licensee specifically has a “craft” license designation. At this time, zero licensees have received this designation.
- No obscenity or indecency: no nudity or profanity
- Statements cannot be false, misleading, or encourage illegal activity
- Cannot promote overconsumption by using terms such as “easy to consume”
- Cannot promote product potency or have a focus on THC percentage
New York has the most restrictive branding laws in the Northeast because of their explicit ban on the use of bubble letters and neon colors. However, New York, New Jersey, Massachusetts, and Connecticut have all banned the use of cartoons, toys, and other items meant to appeal to those under 21.
5. Apparel
In New York, dispensaries can only sell merchandise in adult sizes, on licensed premises (in their dispensary), and the merchandise must not contain any cannabis symbols or references. Apparel is considered an advertisement if it causes (directly or indirectly) the purchase or use of a brand or cannabis product. Licensees cannot give away apparel or use it as an incentive unless the apparel is part of an approved Environmental Sustainability Program.
6. Sponsorship
NY’s proposed regulations allow cannabis brands to sponsor charitable, sporting or similar events and include the company’s logo, name, website, e-mail address, telephone number, retail dispensary location, and the nature of their business. Licensees can only purchase an advertisement in connection with an event that has guaranteed at least 90% of the advertisement’s audience is reasonably expected to be 21 or older.
7. Health Claims
Cannabis brands cannot promote in a way that makes false or unsubstantiated health claims. For example, a company cannot claim that their offerings cure cancer or other serious illnesses. This is true for both medicinal and recreational products in the state. The word “organic” cannot be used in any marketing or advertising. A brand cannot assert that cannabis or cannabis products are safer because they are regulated by the Cannabis Control Board (CCB) or OCM.
8. Promotional Materials, Giveaways and Discounts
The MRTA also includes restrictions on the types of promotional materials that can be used by cannabis companies. For example, companies cannot gift free samples of their products, and they cannot offer discounts or coupons that could be seen as promoting excessive consumption. Brands and retailers cannot advertise free or promotional items including, gifts, giveaways, discounts, point-based reward systems, customer loyalty programs, coupons, and free or donated cannabis, except for the provision of branded exit packages by a licensee for the benefit of customers after a retail purchase is completed. On menus and in marketing communications, brands must not use terms such as “sale”, “free”, “price drop”, or “discount”.
9. Brand Representatives (Influencer Marketing)
A brand representative is defined as any individual who acts with the intention of causing, directly or indirectly, the purchase or use of a specific brand or cannabis product. These brand representatives (influencers, employees, etc) are considered extensions of the brand and their communications are considered advertisements. For these reasons, all influencers and representatives are subject to the outlined regulations surrounding marketing and advertising of cannabis, especially making health claims.
Cannabis Packaging Restrictions and Guidelines
The regulations surrounding the packaging and display of legal cannabis products in New York State are heavily restrictive.
Packaging must contain: child-resistant open technology, lot unique identifiers (traceable barcodes), list of all ingredients in the cannabis product, and list of any solvents used, date of expiration, the use by date, proper storage conditions, name, location, license number, direct contact info for processor, clear usage instructions, a scannable barcode or QR code that directs to an official Certificate of Analysis for the product, one of the three universal symbols and all required warnings explained below.
Packaging cannot contain: any features that would appeal to minors, any features that emit sound or scent, any features that change a package’s appearance through technology other than for anti-counterfeiting purposes. Cannot depict the product or paraphernalia on the package itself. Cannot promote overconsumption or any pricing. Cannabis product packaging cannot be made of plastic, unless it contains a minimum 25% post-consumer recycled content.
Fonts and Imagery
- No cartoons used on packaging or marketing
- No bubble-type, or cartoon-like font, such as puffy, rounded block letters
- No medical imagery
- Standard fonts are permitted, graffiti-like fonts may be permitted
Colors
- No bright colors that are “neon” in appearance. This includes any color which has a saturation value greater than 60%. Examples of such colors are shown below.
Universal Symbols
The universal symbol, containing a “21+” icon, a “THC!” warning symbol and a New York State icon, must be displayed on all legal cannabis packaging in New York. There are three versions of this universal symbol combination to choose from; square, vertical and horizontal. All sizing requirements are included in the figure below.
Required Warnings
Either the retail packaging or, if a marketing layer is used, the marketing layer must contain the following warnings in bold:
- This product contains cannabis and THC.”
- “KEEP OUT OF REACH OF CHILDREN AND PETS.
- For use only by persons 21 years and older”
- “Warning: Do not use if pregnant or nursing”
- “National Poison Control Center 1-800-222-1222”
For cannabis products intended to be smoked, inhaled, or vaporized:
- Warning: Smoking or vaping is hazardous to health”
For cannabis products intended to be ingested orally:
- Warning: Effects of this product may be delayed by 4 or more hours”
These warnings must be printed in the English language in Times New Roman, Calibri, Arial, or Helvetica font as seen in Appendix A. Text must be no smaller than size 6 font, bolded, legible, unobscured, and visible to the customer.
In addition to all warnings outlined above, one of the following warnings should be featured on a rotational basis.
- Cannabis can be addictive.
- Cannabis can impair concentration and coordination.
- Do not operate a vehicle or machinery under the influence of cannabis
- “There may be health risks associated with consumption of this product.
Creativity and Loopholes in Cannabis Marketing & Advertising
Although the current proposed regulations appear restrictive, innovative cannabis marketers have a way of finding loopholes and creatively compliant ways to promote their brands. Marketers in other Northeast regions and Canada have found numerous ways to skirt the regulations and create meaningful connections with consumers.
Marketers and law teams need to show that they have taken “reasonable steps” to ensure that they are in compliance. By taking a look at one example in Massachusetts, we can see how cannabis brands can take advantage of numerous loopholes.
Massachusetts requires “85% of an expected audience of an advertisement to be over the age of 21 years old”. However, Green Meadows, a Southbridge-based cannabis dispensary, has found a creative way to line streets of a baseball stadium in Worcester with 60 banners advertising their brand. To remain compliant, Green Meadows team accessed local housing data demonstrating that over 85% of the local residents in the area were over the age of 21. Even though sponsorship of sports teams and arenas is banned, the Worcester WooSox stadium is completely (and compliantly) covered in Green Meadows branding for all passersby to see. This example provided by Mondaq.com proves that cannabis brands and marketers will always find a way to reach their goals.
Internet audiences (including web ads and podcasts) are easy to segment and age-gate. Television shows, radio shows and print media with older audiences (90% over 21) will also be well utilized. Documentation of audience demographics and advertisements will become increasingly important for publishers and advertisers alike.
In conclusion, New York’s currently proposed regulations are very similar to its neighbors and other US states that have legalized for recreational purposes. Some regulations may be challenged in court, but most will likely survive. As we’ve seen in other markets, tight restrictions encourage innovation and creativity in marketing and branding. We likely will not see any flashy cannabis advertisements in Times Square anytime soon but we are excited to watch brands grow and evolve in the Empire State.
Cannabis In New York: An ADCANN Series
We will be publishing a series of articles explaining the new and exciting cannabis market in New York state. Stay tuned for more articles coming soon.
