Politics
Cannabis Would Be Considered A ‘High-Risk’ Product With Additional Advertising Restrictions Under New Congressional Bill
A bipartisan pair of congressional lawmakers filed a new bill aimed at protecting consumers from online scams that includes a provision designating cannabis as a “high-risk” product that would require companies advertising it to undergo enhanced verification procedures.
The Stopping Abuse and Fraud Enabled by Platforms Act, or the SAFE Platforms Act, introduced last week by Rep. Valerie Foushee (D-NC) and Del. James Moylan (R-Guam), would generally require online platforms to adopt safety features to prevent the posting of fraudulent content.
The key provision of concern for the marijuana industry would mandate that covered online platforms require advertisers in so-called “high-risk categories” to meet enhanced verification criteria, including submitting additional documentation to validate identity and business operations and undergoing a review of their online presence and business history. They would also need to be periodically re-verified.
The legislation, H.R. 10433, specifies a number of categories of high-risk products and services, including “tobacco, alcohol, cannabis, and other consumables restricted by age.”
Other such industries include financial services and investment opportunities, health products and services, educational credentials and certification, housing and real estate, gambling and unregulated financial products, including cryptocurrency and non-fungible tokens.
The Federal Trade Commission would also be authorized to designate other industries as high-risk though regulatory action.
A covered platform subject to the requirements would be defined by the bill as a provider of an interactive computer service that enables users to view or interact with information provided by an information content provider and that has at least 100,000 monthly active users or generates annual gross revenue in excess of $25 million.
The legislation in general includes a number of other provisions aimed at protecting senior citizens and other vulnerable populations from online scams, including requiring platforms to detect and prevent the creation of fraudulent profiles, implement a “Report Scam” button on all content that could contain advertising and institute accessibility and design requirements for ad content.
“Online and AI-enabled scams are becoming more sophisticated and more devastating,” Foushee said in a press release. “Scammers often exploit platform features to target users—especially seniors, veterans and other communities—with few consequences for the platforms that enable and profit from this abuse.”
“The SAFE Platforms Act sets clear guardrails and safety-by-design requirements so digital platforms verify advertisers, protect users’ privacy by default and take steps to prevent fraud,” she said.
Moylan said that “online scams are becoming more sophisticated, and families should not be left to bear the consequences while the platforms being used to facilitate these schemes face little accountability.”
“The SAFE Platforms Act puts commonsense safeguards in place to help prevent fraud before it happens, protect consumers’ personal and financial information, and give victims meaningful recourse when they are harmed,” he said.
In July, the House of Representatives passed a separate bill aimed at protecting children online that could also create complications for advertisers trying to promote legal marijuana and other regulated substances.
Under the Kids Internet and Digital Safety (KIDS) Act, online platforms would be prohibited from facilitating the “advertising of narcotic drugs, cannabis products, tobacco products, gambling, or alcohol to a user of or visitor to the covered platform who the provider knows is a minor.”
The provision around drug use lists the “distribution, sale, or use of narcotic drugs, tobacco products, cannabis products, gambling, or alcohol” as risks that platforms would need to actively guard minors against.
Meanwhile, in August, the Senate Commerce, Science and Transportation Committee advanced a similar bill, the Kids Online Safety Act (KOSA), that contains an additional provision specifically requiring video streaming services to “employ measures that safeguard against serving advertising for narcotic drugs, cannabis products, tobacco products, gambling, or alcohol directly to the account or profile of an individual that the service knows is a minor.”
