October 29, 2024 : NEW OREGON COURT OF APPEALS DECISION SIGNALS DEATH KNELL FOR CANNABIS ADVERTISING RESTRICTIONS | Cannabis Law Report | How to order Skittles Moonrock online

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Kevin Jacoby | October 29, 2024

Breaking News: NEW OREGON COURT OF APPEALS DECISION SIGNALS DEATH KNELL FOR CANNABIS ADVERTISING RESTRICTIONS

It has long been my opinion that the advertising restrictions applicable to Oregon’s cannabis advertising market were unconstitutional. On October 16, 2024, the Oregon Court of Appeals issued a decision in Bates v. Oregon Health Authority holding that a similarly-worded statute prohibiting packaging and labeling of nicotine vape products “in a manner that is attractive to minors” violates Article I, section 8, of the Oregon Constitution.

At issue in Bates was whether ORS 431A.175(2)(f) is constitutional. That statute reads as follows:

“It is unlawful:

* * *

“(f) To distribute, sell, or allow to be sold an inhalant delivery system if the inhalant delivery system is packaged in a manner that is attractive to minors, as determined by the [Oregon Health Authority] by rule.”

The plaintiffs in Bates filed a complaint in Multnomah County Circuit Court seeking a declaration that ORS 471A.175(2)(f) violated Article I, section 8, of the Oregon Constitution. That provision of Oregon’s constitution reads as follows:

“No law shall be passed restraining the free exercise of opinion, or restricting the right to speak, write, or print freely on any subject whatever”

The trial court agreed with OHA that ORS 471A.175(2)(f) was constitutional, and the plaintiff appealed that decision to the Court of Appeals. The Court of Appeals held that the statute “is written in terms directed to the substance of a communication,” and was therefore presumptively unconstitutional under existing case law interpreting Article I, section 8. In particular, the Court of Appeals found that the word “attractive” in the statute “refers to the packaging’s expressive content: those expressive qualities of the packaging, such as words, color, images, or design that may draw a minor to a product or arouse their interest.”

Under the Oregon Supreme Court’s interpretation of Article I, section 8, laws that are written in terms directed to the subject of any communication are unconstitutional on their face unless the restriction is wholly confined within an historical exception. These historical exceptions are typically those speech or communication restrictions that existed at the time the Oregon Constitution was ratified – perjury, fraud, solicitation or verbal assistance in a crime, forgery and their contemporary variants are the main examples of these recognized historical exceptions. In Bates, the Court of Appeals held that ORS 471A.175(2)(f) did not fall within any historical exception and concluded that the statute is “unconstitutional on its face.”

Similar to the advertising restrictions applicable to vape manufacturers, distributors and retailers, ORS 475C.612 generally prohibits packaging and marketing of cannabis items that is “attractive to minors.” ORS 475C.017(2)(e) directs OLCC to adopt rules that prohibit advertising cannabis items in a manner “[t]hat is appealing to minors.” This statute also contains prohibitions on cannabis advertising that “promotes excessive use” and “promotes illegal activity,” which are also likely unconstitutional.

Honoring the Oregon Constitution

Following the holding in Bates, these statutes are unquestionably unconstitutional restrictions on free expression, as are the vast majority of the rules OLCC has promulgated pursuant to their authority. The question remains whether OLCC will heed the Court of Appeals’ holding in this similarly-situated case and use this as an opportunity to repeal and refine their cannabis advertising and packaging and labeling rules, or whether OLCC will continue on their path of ignoring their Constitutional limitations when it comes to regulating the expression of their licensees.

You can contact Kevin Jacoby at kevin@jacobylawllc.com or schedule a consultation by calling (503) 208-4470.