• by Ken Klein , Op-Ed Contributor, January 13, 2020

On Jan. 8, a federal appeals court ruled that Missouri's complicated alcohol-ad rules violate free speech protections (Missouri Broadcasters Association v. Eric S. Schmitt, Attorney General of State of Missouri).

The Missouri alcohol-ad case and a separate court ruling in Washington State against cannabis advertising rules show the difficulty of restricting advertising while also respecting free speech.

Missouri Alcohol Case

Missouri has a three-tiered system to control alcohol (producers, distributors, and retailers) intended to maintain an orderly marketplace and combat abuse. The state prohibits producers and wholesalers from retail advertising, which “restricts speech based on content and speaker identify,” ruled the US Eighth Circuit Court of Appeals.

“The Statute imposes content-based restrictions by limiting what producers and distributors can say in their advertisements,” the appeals court said. “Under the Statute, a producer or distributor may not have an advertisement that says ‘Drink Coors Light, now available at Joe’s Bar,’ because the advertisement mentions a retailer.”

Alcohol regulations in Missouri prohibit retailers from advertising discounts or below-cost prices outside their establishments. These rules do not make sense, the court said:  State regulations would prohibit a retailer from placing a media ad for “$5 Margarita Mondays” or “Free Drinks for Ladies” but allow ads for sales, promotions, and discounts inside a retail establishment.

Furthermore, the federal court said the state failed to show that its alcohol-ad rules advanced the government's interest and were not more restrictive (on free speech) than necessary.

The Missouri broadcasters' lawsuit was heavily briefed, and free-speech advocates and the American Civil Liberties Union of Missouri supporting the broadcasters.

Washington State Cannabis Case

As more states legalize marijuana, advertising restrictions will be tested. Unlike alcohol, cannabis is illegal at the federal level. Therefore, does promotion of cannabis in a jurisdiction where it is legal warrant First Amendment protection?

A judge in Seattle said “yes.“

". . the commercial speech at issue here (signage for a cannabis dispensary) is entitled to constitutional protection,” wrote King County Superior Court Judge David Keenan in November (Plausible Products v. Washington State Liquor and Cannabis Board).

During the 2017 holiday season, a cannabis dispensary called Hashtag spelled out “POT” with a string of Christmas light in a window. The dispensary challenged Washington State’s sign code on constitutional grounds after the store was cited for violations.

Ruling for the dispensary, the judge in Seattle referred to First Amendment cases on alcohol and tobacco:

- Rubin v Coors Brewing Co. (1995); the Supreme Court invalidated a federal prohibition on displaying alcohol content on beer labels (as a First Amendment violation that failed to advance the government’s interest in a direct, material way).

- Lorillard Tobacco Co. v Reilly (2001); the Supreme Court said Massachusetts' point-of-sale and outdoor advertising regulations on smokeless tobacco and cigars violated the First Amendment.