MONTPELIER — Middlebury retailer Flora Cannabis and the Vermont Cannabis Action Fund reached a settlement with the Vermont Cannabis Control Board over a lawsuit concerning advertising and free speech.
"As part of the settlement," the plaintiffs said Thursday in a news release, "the CCB has agreed to several important changes to its enforcement practices and interpretive guidance, which collectively will reduce the heavy and unreasonable burdens placed by the State on the Constitutionally-protected right of law-abiding cannabis businesses to responsibly market to adult consumers."
The suit was filed in December in Addison County Superior Court, Civil Division, and claimed "multiple violations of the Vermont Constitution guarantees of freedom of speech, including a de facto statewide ban on outdoor advertising, and an unprecedented prior restraint regime that required cannabis businesses to submit even in-store marketing materials to the State for prior approval," according to the news release. The settlement includes commitments from the CCB to allow outdoor signage, exempt in-store marketing materials from prior review, and allow cannabis products to be marketed via social media, which was previously prohibited.
“Vermont’s licensed cannabis industry has created thousands of jobs, generated hundreds of millions of dollars in new tax revenue, and rejuvenated downtowns across the state with stores that Vermonters and tourists alike love shopping at," Dave Silberman, co-founder of Flora, said in the news release. "We deserve to be supported by the State, just like all other so-called ‘regulated vice’ industries like Vermont’s beloved craft beer and spirits producers. But because some powerful politicians want to keep Vermonters in the dark about a legal product that those politicians just don’t like, the State adopted the harshest restrictions on cannabis marketing in the nation, violating our Constitutional rights and making it unnecessarily difficult for us to communicate with existing and potential customers.”
Silberman said the settlement doesn't fix all of the constitutional issues with the state's cannabis advertising laws, however, "it provides immediate, meaningful relief to an industry that has earned the right to be treated with respect rather than contempt, and avoids a lengthy and expensive trial.”
"I think the biggest win is really the overall picture because each individual concession is fairly minor on its own," he said in an interview. "But when you look at the totality of it all, it really takes the overall burden off of us. Some things are going to be more important to others for different things."
CCB Chairman James Pepper said the settlement maintains the Legislature's intent behind cannabis advertising laws while also reducing the administrative burden felt by businesses and internally by his agency. He called the deal "a good compromise."
"We don't have any answers to the constitutional questions but we do have a path forward for the immediate future," he said, noting the scope of the settlement was "really limited to internal processes and the board's procedures and interpretations of the law."
Pepper said the settlement preserves the preapproval process for advertising, which was a "major bone of contention." However, the process now has a limitation.
Advertising will be considered approved if the CCB doesn't provide approval or written response detailing required changes or disclosures within five business days after submission.
Establishments can submit advertising templates that can be used repeatedly across all media. Template approvals will last a year unless otherwise specified, according to the agreement. The board has 10 days to approve or respond to template submissions.
"I would say preapproval is the most vulnerable aspect to the way the statutes were written," Pepper said, noting that it's "pretty rare" for government to such a process for speech.
Internal data suggests the new time limit is "very doable," Pepper said, as the CCB takes about three days on average to approve advertisements and five days is "the outer limit."
Template approval is longer "because the consequence of missing something there is more extreme," Pepper said. Recurring themes and aesthetics, with some variable ones, are submitted as part of the template.
"This is a great example of how this is reducing burden on both sides," Pepper said.
Template approval "makes our marketing more feasible and more feasible to do on a timely basis," Silberman added.
Products previously weren't allowed to be advertised on social media. Now, text can be used to describe products, promotions and deals but no photos can be posted. Photos can be made available on the establishment's age-gated website.
A health warning developed by the Vermont Department of Health takes about 30 seconds to read, Pepper said, making a radio or podcast ad "an absurdity." The CCB plans to submit shorter alternatives for the department to consider.
Annual CCB inspections will be accepted as a form of ad submission for in-store advertising, the agreement states.
"I think that helps retailers quite a bit," Silberman said, as every marketing piece had to be sent to the state for preapproval before.
Systemic targeted web-based advertisements are allowable as long as it's "competently restricted to users who have self-identified as over the age of 21 utilizing industry-standard methods," according to the agreement. The CCB will publish on its website a regularly updated list of vendors it has determined use "industry-standard methods."
For more sweeping changes on advertising, Pepper encourages members of the industry to speak with their legislators.
"I don't foresee the Legislature acting in that area next year," he said. "But I think as the industry matures and licensees get a little more organized and they can make a compelling case that their businesses are really struggling because of overburdensome advertising laws, there might be an appetite."
Flora and the VCAF plan to "keep pressing for additional reforms" during the 2026 legislative session, Silberman said. VCAF is described in the news release as "the leading voice of Vermont’s regulated cannabis industry in the Vermont Statehouse, providing professional representation to a broad coalition of licensed cultivators, manufacturers, distributors, and retailers within Vermont’s halls of power, and helping to finance litigation when needed."
Silberman estimates the coalition includes about 50 to 60 members.
"I'm glad it came to resolution," Scott Sparks, owner of Vermont Bud Barn in Brattleboro and coalition member, said of the lawsuit. "I look forward to seeing how some of the changes are implemented and hoping there's some optimism in the future for being able to have advertising for our business like other businesses can have."
Silberman said the coalition will continue to seek change on the preapproval process, which he described as being against "foundational principles on which this country started and deeply offensive."
"When you claw back anybody's free speech rights, that is a threat to all of us," he said. "And we ought to be very, very concerned when the state tells us what we can and cannot say because they do not like what we are talking about."