Cannabis-related companies hit brick wall on social media

June 24 (UPI) -- Cannabis and industrial hemp companies that are legal in many states are finding an uneven terrain online when they attempt to promote their businesses or sell products on the Internet.

The online world of cannabis hosts a universe of websites on which a buyer can track down cannabis in states where it has been legalized, but large social media companies like Facebook, sister company Instagram and Google-owned YouTube are cracking down on cannabis content, even in places where it has been legalized.

Last month, a cannabis-oriented company sued Facebook in federal court for rejecting its paid advertising. New York-based Cannaramic Media Inc. and founder Felicia Palmer sued the social media company after it rejected ads for a May 2019 online conference the company was hosting.

In 2018, YouTube "demonetized" several video channels run for years by pot-smoking "weedtubers" to make the platform more ad-friendly to big corporations.

Part of the problem is that in states where medical and recreational marijuana is allowed, the business of advertising pot is in a legal limbo between federal and state rules, a Washington law firm said.

Federally, the Controlled Substances Act forbids using the Internet to "deliver, distribute, or dispense a controlled substance." The act also says it's federally illegal to place an ad for a Schedule 1 drug in a newspaper or magazine -- although cannabis dispensary ads are commonly found in local periodicals.

The federal government seems to treat state-legal cannabis like local police treat jaywalking, an article by lawyers Chris Morley and John McKay said. Still, it's not advisable to "jaywalk in front of Officer Friendly ... and flip him off while doing it," they wrote.

Even though online and print media have defended themselves legally over the years from being punished for publishing explicit or illegal third-party content, federal agencies showed they were willing to step in last year when they shut down Dallas-based sex site Backpage.com.

Large social media companies appear to be taking the cautious route when it comes to cannabis, legal or illegal.

Facebook's ad policy specifically prohibits the advertising of " illegal, prescription or recreational drugs." The company did not respond to a request for comment. YouTube's rules say any video that features the "sale, use, or abuse of illegal drugs, regulated drugs or substances or other dangerous products is not suitable for advertising."

Palmer said her cannabis education company paid for online ads on Facebook targeting adults over age 25 only in states where medical or recreational cannabis is legal.

"Facebook and Instagram were a large chunk of our marketing plan," Palmer said.

Her conference broadcast "educational videos" about cannabis and were not promoting drugs or drug paraphernalia, but "only information that furthered the national conversation about cannabis -- which is protected speech under the First Amendment of the United States Constitution," the lawsuit said.

Palmer now believes any company with a legal cannabis-related business is a "sitting duck" if it uses either platform, because it can be "shut down at any time."

Industrial hemp and CBD companies have been blackballed by Facebook, as well, even though the 2018 U.S. Farm Bill declassified hemp -- a plant in the cannabis family -- and made it no longer illegal as a Schedule 1 drug.

"I personally got thrown in FB jail for saying we had 'great strains, great clones,'" Colorado hemp farmer Andy Grant told UPI.

Joy Organics, a Colorado company that sells CBD products, had its Facebook page shut down in January, said Hannah Smith, the company's marketing head.

"We were not running any ads for CBD, but we were shut down, as were several other CBD pages of companies we knew." In Joy Organics' case, the page had been classified in error as a "pharmaceutical company," Smith said. The page later was restored.

Facebook's blocking of her company's pages "seemed very arbitrary," Smith said.

The Hemp Industries Association, an industry trade group, has been advertising on an electronic billboard in New York City's Times Square since March with the message "Facebook: Stop Censoring Hemp." The group is paying for the ad to run through Aug. 24, it said.

"Hemp entrepreneurs nationwide are currently being denied access to one of the most powerful marketing platforms in the world for small businesses, restricted to outdated policies that continue to conflate hemp with marijuana," Colleen Keahey Lanier, the association's executive director, said in a statement.

The U.S. Supreme Court ruled last week that private companies can determine what is posted by the public on their websites.

In a case involving a Manhattan public access television channel, the court ruled that the station did not have to hold to a First Amendment standard. Social media companies had been watching the case. The Electronic Frontier Foundation had filed an amicus brief in the case urging the court not to force private companies to allow unmoderated speech on their platforms.

But some argue that the big social media companies have become almost like a public utility in their users' lives.

"Facebook is unfortunately in the middle of a bad political decision-making process that Congress needs to address," said lawyer David Holland, executive director at the New York chapter of the National Organization for the Reform of Marijuana Laws, who filed the suit against Facebook in U.S. District Court for the Southern District of New York on behalf of Cannaramic.

"They're paying the price to have to censor the conversation about cannabis in an election year when their company is essentially the public square," Holland said.