Middlebury cannabis business sues Vermont regulator over free speech

A Middlebury-based cannabis retailer filed a civil suit against the Vermont Cannabis Control Board this week, arguing that the state’s restrictions on advertising infringe on constitutionally-protected free speech rights.

In the suit recently filed in Addison County Superior Court, the retailer, FLŌRA Cannabis, particularly targeted a Vermont law that requires licensed cannabis businesses to submit all public statements intended to induce a sale for pre-approval by the control board, even a sign placed only in a business’s own store.

“If I want to put signage in my own store — 20% off a product — I need to get it pre-approved by the CCB (Cannabis Control Board),” said FLŌRA co-founder Dave Silberman in an interview.

Backers of the law argue that the requirements exist to protect minors, “but people can’t enter unless they have their ID verified,” Silberman said. “I’m okay with no cartoon characters when I advertise, but with this level of stigma, it’s illegal to restrict our free speech in this way,” he added.

Cannabis Control Board Chair James Pepper — who is named in the suit along with board Executive Director Olga Fitch — said he was not surprised by the lawsuit.

“It has been a bone of contention at the Legislature since back in 2020,” Pepper said. “Every year, the cannabis industry has come to the Legislature, arguing that these laws are too restrictive.” He added that the Cannabis Control Board is only enforcing the laws as they’re written.

“Cannabis advertising is any communication that is calculated to induce a sale. So someone saying that they’re selling with 20% off, whether that’s online or in store, is made to induce a sale,” Pepper said. It is legal to put a sign with a sale in your shop, he said, you just have to have it approved first.

Since November 2022, the board has reviewed 585 advertisement submissions, approving 324, denying 169 and marking 25 submissions that didn’t count as advertisements, according to data provided by the control board. Most denials were approved upon resubmission after revisions.

Silberman claimed that licensed cannabis businesses in Vermont operate under stricter advertising regulations than any other industry in the state, including sports wagering, and that no other state where adult cannabis use is legalized has such strict rules. Pepper, however, questioned whether Vermont is the only state with a pre-approval requirement.

“I went to a cannabis regulatory meeting and pre-approval was discussed, and I remember a number of people raised their hands, but I can’t say definitively that we (Vermont) are not the only ones,” Pepper said.

To Silberman, the turnaround time is also an issue. When he submits an advertising statement for pre-approval, he said the control board takes a week to respond “if they respond at all,” he said.

The control board reviews submissions internally, beginning with a designated staff member who assesses their content. Advertisements without any direct problems, such as “therapeutic claims,” are typically processed within one to two days, according to Pepper. Submissions with ambiguous content are forwarded to a committee that meets weekly. Pepper estimated the review process generally takes no more than eight days, with occasional exceptions.

“We give feedback and they have the option to adjust the statement. It’s a conversation. Within a day it can be approved,” Pepper said.

The lawsuit is supported by a broad coalition of manufacturers, distributors, and retailers across the state, according to a recent press release from FLORA.