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Twitter is allowing adds for cannaibis to run in states where it is legal; however it's still illegal federally regardless of state laws. I'm curious if it's legal to run ads for products that are (technically..) illegal in the locations the adds are running? Is twitter breaking any federal laws in doing so?

I recognize that the federal government is not perusing legal actions against marijuana and as such twitter is likely safe regardless of theoretical illegality of any adds. Still, on paper are any laws being violated by twitter?

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  • As I commented on this answer, Twitter would be technically unable to apply anything relating to marijuana to its federal tax returns. But I am not sure how they split out profits/expenses on a state by state basis in order to avoid that.
    – Peter M
    Apr 4, 2023 at 17:27

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Federal laws prohibit false, deceptive, unfair etc. advertising, and there simply exists no federal law prohibiting advertising marijuana. Because of the First Amendment, there is no law prohibiting the advocacy of an illegal act. Because of the Commerce Clause, Congress could pass laws restricting commercial speech, as long as it passes strict scrutiny, see Central Hudson Gas & Electric v Public Service Commission of New York. However, "For commercial speech to come within the First Amendment, it at least must concern lawful activity and not be misleading". So Congress could pass a federal advertising ban. A state where marijuana is illegal can do likewise, but as you noted Twitter does not cross that line. Washington allows marijuana sales and advertising, however "A cannabis licensee may not engage in advertising or marketing that specifically targets persons residing out of the state of Washington" (not even Oregon where the herb is also legal). Still, the state attempted to limit advertising which resulted in Plausible Products, LLC d/b/a Hashtag Cannabis v Washington State Liquor and Cannabis Board. The ruling observes that

The State argues that, “[f]or purposes of the first Central Hudson test, marijuana activity cannot be considered to be ‘lawful activity” where its use, possession, manufacture, and distribution remains illegal under federal criminal law.”

§2(B) analyses this rationale, quoting from New England Accessories Trade Ass’n v. City of Nashua, 679 F.2d 1, where the New England Accessories court also considers that “If New York, or some other state, decided to legalize the sale and use of marijuana, New Hampshire would have greater difficulty . . . prohibiting an advertisement suggesting that the Big Apple was the place to get high on marijuana.” The Plausible Products court then concluded

It follows that, where one state could not avoid Central Hudson scrutiny for banning advertisement of Washington recreational marijuana, neither can the State here avoid Central Hudson scrutiny on the basis that recreational marijuana is still illegal under federal law

There are other relevant tests applicable to restrictions on commercial speech –
is the government's interest substantial, does the regulation directly advance that interest, and is it narrowly tailored. Presumably, the state interest would be in preventing underage consumption (accepted by the court). Another possible interest, rejected by the court, was "not tipping off the feds", with reference to the "federal government’s expectation of a strong and effective marijuana regulatory system". But as the court noted, the Cole Memorandum was rescinded, and states cannot rely on it, thus the "asserted interest in avoiding federal intervention is too elusive to amount to a substantial interest under Central Hudson".

The Twitter restrictions on cannabis ads are very similar to the Washington state regulations on such advertising. Allowed ads seem to be reined in to meet the general state interest (in restricting underage consumption), so I conclude that there are no legal consequences of their business decision.

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