2022 Marcom Trends - Magazine - Page 9
ALCOHOL
Event promoters usually contract out concessions to a thirdparty vendor so that they are free to contract with alcohol
companies. Although some stadiums also contract out their
concessions, some prefer to maintain control of concessions
and hold liquor licenses themselves. Whether alcohol brands
can enter into agreements with such venues will depend on
the specific state’s law and whether any exception applies for
stadiums or similar large venues.
4. Samples Aren’t Simple
Alcohol brands are not typically permitted to serve drinks to
consumers. But, as we’ve already discussed, they also are not
allowed to give anything to a retail licensee. So, how do brands
get drinks into the hands of consumers?
The answer varies by state. Most states permit brands to
conduct sampling events. However, these sampling events are
often restricted to certain types of premises (e.g., liquor stores
versus bars or restaurants), and brands are typically limited in
the quantities that they can serve, with distilled spirits often
limited to ¼ ounce pours. Only a few states permit brands to
conduct full-scale brand experience events where alcohol is
served, and these states have limitations on how the event can
be advertised and how much a brand can spend on the event.
5. Merchandising, Merchandising,
Merchandising
A key appeal of live events is the ability to hand out branded
merchandise like beer koozies and hats to consumers. Although
most states permit alcohol brands to give out merchandise
to consumers, the extent of this permission will depend on
the state. Some states limit the value of the merchandise.
For example, California limits merchandise to $5 per item for
distilled spirits brands, $1 per item for wine brands and $3 for
beer brands. States also have different rules regarding what
types of items can be provided and whether the item can be
distributed through a retail licensee.
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8 DAVIS+GILBERT LLP
CANNABIS/CBD
“Advertising materials should only
appear in media where 71.6% of
viewers are 21 years of age or older,
and brands should only sponsor
events where they anticipate
that attendees will meet these
demographic criteria.”
Aaron K. Taylor
Partner
ataylor@dglaw.com
Aaron helps clients develop highly
effective advertising campaigns across
all media while avoiding . . . more
Louis P. DiLorenzo
Associate
ldilorenzo@dglaw.com
Louis brings an industry perspective to
helping clients develop creative, enduring
advertising and marketing . . . more
Andrew Richman
Associate
ajrichman@dglaw.com
Andrew supports all aspects of
entertainment, media, sports, advertising
and technology transactions . . . more
The Regulatory Outlook for THC’s
(Mostly) Legal Cousin, Ingestible CBD
Gary Kibel, Partner, gkibel@dglaw.com
Louis P. DiLorenzo, Associate, ldilorenzo@dglaw.com
Alexa Meera Singh, Associate, alsingh@dglaw.com
Ingestible cannabidiol (CBD) products,
including gummies, tinctures, tonics and
capsules, are growing in popularity and make
up a significant part of the multi-billion dollar
global CBD market.
with the FDA. Last year legislation was introduced in the House of
Representatives that would legalize ingestible CBD so long as it
otherwise complies with the FD&CA, and the proposed Cannabis
Administration and Opportunity Act would require the FDA to develop
a regulatory pathway for legalizing CBD in dietary supplements.
However, although CBD is generally legal under federal and most
states’ laws, the legal outlook for ingestible CBD remains quite
complicated.
While the federal government continues to grapple with the question
of how to regulate ingestible CBD, state legislatures are beginning to
create their own regulatory schema for ingestible CBD.
Federal Law
Despite state legalization efforts, marijuana continues to be illegal
under the United States Controlled Substances Act. However, under
the Agriculture Improvement Act of 2018 (the Farm Bill), CBD
may be produced and marketed if it contains no more than 0.3%
tetrahydrocannabinol (THC).
The Farm Bill preserved the FDA’s power to regulate products
containing cannabis or cannabis-derived compounds under the
Food, Drug & Cosmetic Act (FD&CA). Although the FDA does
not prohibit the inclusion of CBD in cosmetics products, the
FDA considers it to be a drug, and therefore prohibits the use of
CBD in ingestible products such as food, beverages and dietary
supplements without FDA approval. And, because the FDA has
only approved of the use of CBD in Epidiolex, an epilepsy drug, the
overwhelming majority of food, beverages and dietary supplements
are misbranded under the FD&CA.
This has led to a complicated regulatory environment for ingestible
CBD products, with the FDA issuing a considerable number of
warning letters to companies selling CBD products. These warning
letters have focused largely on products that make unsupported
claims that CBD can treat a host of medical conditions, including
most recently that CBD can prevent or cure COVID-19. In addition,
the FDA still maintains the position that all ingestible CBD products
(other than Epidiolex) are unlawful while it evaluates CBD’s health
effects, and in some cases has also gone after CBD marketers for
making more run-of-the-mill claims (or even just for simply selling
ingestible CBD). Meanwhile, some in Congress have grown impatient
State Law
For example, New York has enacted a detailed regulatory scheme for
manufacturing and selling CBD and other hemp extracts, including in
ingestible products, and now requires licensing to grow, process and
sell it. California used to follow the FDA’s lead, which categorizes all
ingestible CBD as unlawful, but has since passed new legislation
that legalizes ingestible CBD. Still, there are questions as to how
inhalable CBD will be treated, as New York will require a recreational
marijuana license to sell inhalable CBD, and California has
banned inhalable CBD altogether until legislation governing taxation
is passed (a curious position, considering that it was one of the first
states to legalize recreational marijuana).
What Businesses Can Do Now
• Until the FDA provides further clarity (or Congress otherwise
acts), the legal environment for ingestible CBD will remain
cloudy.
• Nonetheless, the proliferation of ingestible CBD products
across the United States has continued at a steady clip, and
shows no signs of slowing down.
• Although it is difficult to ignore the allure of this booming
market, marketers of CBD products and their advertising
and media partners should comply with the patchwork of
state laws and not make false or misleading health and
safety claims.
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TRENDS IN MARKETING COMMUNICATIONS LAW 9