Cannabis Billboards on the 101 Must Come Down After Court Ruling

Billboard advertising Sisu Extract services to cannabis growers. [Photo by Sisu]

The voter-approved Proposition 64, which legalized recreational use, includes a provision saying businesses can not “advertise or market on a billboard or similar advertising device located on an Interstate Highway or State Highway which crosses the border of any other state.” Billboard advertising is permitted on all other roads.

But when state regulators crafted the language governing the minutiae of business operations, the Bureau of Cannabis Control’s (BCC) regulations only went as far as blocking cannabis interstate highway billboard ads within 15-miles of the California border.

A concerned citizen sued in protest of this apparent violation of state law (per Prop. 64), and a judge in the San Luis Obispo County Superior Court decided the case in the man’s favor, essentially stating that the BCC had overstepped its authority with its interpretation of this particular provision. (The judge didn’t disagree with the text of the BCC regulations, but ruled that BCC’s interpretation was contrary to state law.)

Screenshot of the Bureau of Cannabis Control’s notice.

Now all of the billboards on interstate highways must come down — not just billboards for dispensaries and retail-ready brands, but billboards for all licensees, including distributors, manufacturers and cultivators alike. The BCC does not appear to be launching a campaign to appeal the ruling, and instead sent out a notice that licensees need to begin the process of removing billboards that meet this criteria.

(This ruling does not affect auxiliary businesses, like turkey bag and soil companies.)

In anticipation of fallout over the difference in BCC regulations and the verbiage in Prop. 64, cannabis attorney Omar Figueroa says the regulating agency could have approached state legislators for a change in the law.

“All restrictions on expression, even commercial expression such as this, are constitutionally suspect,” he opined, and went on to call such blanket prohibitions “overbroad.” The constitutionality of the ban should not be assumed, but Figueroa says the constitutionality of the billboard restriction in Prop. 64 was not argued in the San Luis Obispo Superior Court.

Licensees closely follow the regulations provided by the BCC and the other two regulating agencies (the California Department of Public Health and the CalCannabis division of the California Department of Food and Agriculture), but with such a glaring inconsistency regarding the billboards in particular, the concerned citizen’s victory in court came as no surprise to Sisu Extracts Vice President of Sales and Co-Founder Joe Wynne.

It was an expected evolution, Wynne said, “Just another hurdle that we all have to deal with” in an industry that’s already difficult with its strict regulations, high fees, and taxes. It’s a particularly tough blow to Humboldt County cannabis businesses too, because billboards are an extremely effective advertising platform in this region.

“The billboards work because there’s only one road in and out of this place, and that’s the 101,” Wynne explained. “Every farmer that needs to go to Costco every week has to drive by whatever message we put up. It’s been immensely successful for us.” (Wynne’s face is featured on the arguably iconic Sisu billboards in Eureka.)

Furthermore, Wynne argues, a company like Sisu is utilizing billboard space to market agricultural processing and bulk wholesale services; essentially comparable to a cotton gin or lumber mill. “If I had my druthers and was able to write laws myself, I’d love to see an exception for businesses that are not marketing a retail product,” he said.

“We’re all, of course, having to look to where we will pivot next,” he continued, especially since cannabis businesses are restricted from advertising on TV and internet platforms. “We need to leave ourselves some ability to market.”

Allpoints Signs Owner and CEO Geoff Wills explained the court’s ruling is “a tough blow to the billboard industry. It will be a blow to my company and all of my clients’ companies.” Allpoints owns and manages the billboard advertising spaces in Humboldt County, and the vast majority of these spaces are on Highway 101.

Given that about 30% of Allpoints’ current clients are cannabis businesses, the company is facing a substantial loss in revenue. And while Wills pointed out, “It’s not forever a loss — rewind to 2014… We had no cannabis ads up.” He’s never had to deal with 15-20 billboards becoming vacant all at once. His customers spend money on billboards because they work, “so they’re going to see a downturn” as well, he said.

According to Wills, the billboard provision in Prop. 64 “just didn’t make sense” to begin with. In particular, Prop. 64 restricts licensees from advertising on an interstate that could be hours away from the border, but allows billboard advertising on a sidestreet two minutes away from the border. He thinks the BCC’s more flexible interpretation of this provision was logical.

“That’s not what the litigant was getting after anyway,” Wills explained, given that the end result of this court ruling is merely restricting billboards on interstates, and nowhere else.

“We’re not living in a nanny state,” he said, where everything that is offensive must be removed from public view. Alcohol and tobacco companies are permitted to advertise on billboards. Moreover, billboard advertisements placed via Allpoints do not feature cannabis imagery like buds, plants or retail products; Wills called them “just standard business ads” that feature company logos, names and services offered.

“Clearly the voters of California don’t have a problem with recreational cannabis,” he argued Companies should be able to use all of the tools at their disposal to have successful businesses, especially in Humboldt County, he argued, saying, “This is the backbone of our economy, and it provides so many legit and well-paying jobs.”

Figueroa echoes a similar sentiment, and wonders why the government is regulating expression so vigorously. Consider how these prohibitions will affect small towns like Laytonville, where an interstate highway doubles as the small town’s main road, he asked. And since Prop. 64 features such deference to local jurisdictions, why not let local jurisdictions decide on billboard regulations?

The thing is, billboard advertising could get even stricter since AB 273 was introduced in the state legislature on Jan. 19th. This bill, if passed, would restrict licensees from advertising or marketing on a billboard or similar advertising device visible from an interstate highway or on a state highway within California. (As things stand, a licensee could get away with advertising on a billboard on a frontage road adjacent to a highway. AB 273 would close that loophole.)

We’re in a rural area and some folks don’t have access to the internet on a regular basis, so billboard advertising enables a company like Sisu “to reach out to folks to say, ‘Here’s what we can do,’” Wynne explained. Via billboards, Sisu offered a value proposition in a way that local farmers were able to receive, he said. “It allowed us to drive an enormous amount of money into this community… Limiting that flow,” Wynne said, “I’m not sure serves anyone’s interest.”