Cannabis. Photo: 420MediaCo/Shutterstock.com

Cannabis lawyers say publishers seeking to advertise for cannabis brands should have an internal policy on what kind of advertising to accept and do due diligence on their customers ahead of possible advertising regulations.

Chris Morley, an associate at Davis Wright Tremaine in the firm's cannabis practice, said publishers have built successful businesses prior to the widespread legalization of cannabis.

"That puts in-house counsel in an interesting position. Usually they'll get questions from their sales folks who are getting approached by the industry for ad buys," Morley said. "Management wants to know as well if they're leaving money on the table or not."

Morley said in-house counsel and their employers in publishing should focus on working with customers who comply with state and federal laws and have strong internal policies on what goes into their advertising.

The federal Controlled Substances Act, Morley said, has a few provisions related to advertising the sale of controlled substances. He said publishers are aware of these provisions, but they are not sure how they apply. The best way to steer clear of violations is to make sure an advertisement focuses on the cannabis brand over advertising the transaction.

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While state laws vary, Nicole Phillis, an associate at Davis Wright Tremaine in Los Angeles, said California is beginning to look at ways to regulate how publishers advertise cannabis.

"In many ways I think California is a bellwether state to see how states are looking to regulate cannabis and CBD," Phillis said of the plant and its popular compound cannabidiol.

AB 1417 is one bill, she said, companies who publish advertisements in California should keep on their radar. The bill, which passed the Assembly and is making its way through the Senate, pertains to disclosure requirements for cannabis advertisements.

"What that bill seeks to do is to hold online applications and technology platforms responsible for posting advertisements created by third-party unlicensed cannabis vendors," Phillis said.

If the bill passes as is, there will be civil penalties associated with violating the law. Although right now, regulators have not been cracking down on publishers when it comes to advertising other companies' cannabis products.

"We haven't seen a significant amount of regulatory enforcement against publishers," Morley said. "Publishers want to do business with the cannabis industry but they want to do it the right way. We've seen a really strong effort to front-load compliance rather than wait and see and take some risk."

However, Phillis said regulators in California have launched a public information campaign called "Get #weedwise," which focuses on getting consumers to purchase cannabis from licensed businesses.

"I think regulators send out those types of signals before you see a lot of activity," Phillis said.