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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. TRANS-HIGH CORPORATION, d.b.a. HIGH TIMES MAGAZINE, and DENVER WESTWORD, LLC, Plaintiffs, v. THE STATE OF COLORADO, BARBARA J. BROHL, in her official capacity as Executive Director of the Colorado Department of Revenue, and JOHN W. HICKENLOOPER, JR., in his official capacity as Governor of Colorado, Defendants. ______________________________________________________________________________ COMPLAINT ______________________________________________________________________________ Plaintiffs, by and through their attorneys David A. Lane, Darold W. Killmer, and Michael P. Fairhurst of KILLMER, LANE & NEWMAN, LLP, hereby submit this COMPLAINT for declaratory and injunctive relief. The Plaintiffs respectfully allege for their Complaint as follows: I. 1. INTRODUCTION

This is a civil rights action for declaratory and injunctive relief pursuant to 42

U.S.C. 1983 and 28 U.S.C. 2201, et seq., and for attorneys fees pursuant to 42 U.S.C. 1988, based on Defendants current and imminent violations of Plaintiffs rights guaranteed under the First Amendment to the United States Constitution. 2. Plaintiffs are all publications which engage in advertising marijuana-related

products and services, and request immediate relief from the unjustifiably burdensome advertising restrictions Defendants have placed upon them in the rules promulgated by the

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Colorado Department of Revenue, Marijuana Enforcement Division (MED), codified at 1 CCR 212-2, R1104 (Advertising: Television), R1105 (Advertising: Radio), R1106 (Advertising: Print Media), R1107 (Advertising: Internet), R1108 (Advertising: Targeting Out-of-State Persons Prohibited), and R1111B (Outdoor Advertising Generally Prohibited). 3. The MED regulations at issue unlawfully limit Plaintiffs First Amendment rights

to distribute protected commercial speech via television, radio, print media, and the Internet, and unlawfully ban all outdoor advertising and all advertising [t]argeting [o]ut-of-[s]tate [p]ersons. The regulations violate Plaintiffs First Amendment rights because each is more extensive than necessary to serve any cognizable government interest(s), and each fails to directly advance any cognizable government interest(s). II. 4. JURISDICTION AND VENUE

This Court has jurisdiction over this action pursuant to 28 U.S.C. 1331 and

1343. This Court is authorized to grant the declaratory relief requested herein pursuant to 28 U.S.C. 2201(a). 5. Venue is proper in the United States District Court for the District of Colorado

pursuant to 28 U.S.C. 1391. III. 6. PARTIES

Plaintiffs are companies engaged in the business of publishing and distributing

magazines and/or newspapers that carry and seek to carry advertisements concerning Retail Marijuana Establishments through print media and the Internet, and that also may seek to carry advertisements concerning Retail Marijuana Establishments through radio, television, and outdoor mediums, and thus are subjected to and restricted by the regulations at issue. Plaintiff Trans-High Corporation, d.b.a. High Times Magazine (High Times) is incorporated in New

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York, and Plaintiff Denver Westword, LLC (Westword) is incorporated in Delaware. Plaintiff High Times has been an internationally-recognized publication and brand name dedicated exclusively to cannabis-related content for approximately forty years, as well as a leader in educational seminars and industry tradeshows in venues across the United States and abroad. High Times Magazines journalistic content relates to cannabis activism, legislation, and cultivation, and is available in both print versions and on the Internet. Both the print form and electronic versions of High Times Magazine features advertising from around the globe, including the State of Colorado. The Colorado MED has approved a joint venture seed cultivation company that will bear the renowned trademarks owned by Trans-High Corporation. Advertising relating to that company will be carried in the print and electronic versions of High Times Magazine, which will be accessible outside the confines of the State of Colorado. Plaintiff Westword has been a newspaper circulated in the vicinity of Denver, Colorado since 1977, is an active publisher of advertising for the medical marijuana industry, and was one of the first newspapers in the United States to employ a marijuana critic. 7. Defendant The State of Colorado (Colorado), by and through Defendant John

W. Hickenlooper, Jr. (Hickenlooper) in his official capacity as Governor of Colorado and Defendant Barbara J. Brohl (Brohl) in her official capacity as Executive Director of the Colorado Department of Revenue, are state actors whose actions represent the State of Colorado. Defendants Colorado, Brohl, and Hickenlooper acted under color of state law at all times relevant to this Complaint. IV. 8. FACTUAL BACKGROUND

Plaintiffs bring this action for the constitutional injuries they are sustaining, and

imminently will sustain, because the Defendants, acting under color of state law, have placed

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irrational, inadequately supported, and overly broad restrictions on their First Amendment rights to engage in advertising concerning Retail Marijuana Establishments. 9. The MED defines Retail Marijuana Establishment as a Retail Marijuana Store,

a Retail Marijuana Cultivation Facility, a Retail Marijuana Products Manufacturing Facility, or a Retail Marijuana Testing Facility. 1 CCR 212-2, R103. 10. All advertising Plaintiffs carry, seek to carry, and may carry concerning Retail

Marijuana Establishments constitutes protected commercial speech because it addresses lawful activity, see Colo. Const. art. XVIII, 16 (authorizing the operation of Retail Marijuana Establishments), and is not deceptive, false, or misleading. 11. Defendants are enforcing or stand ready to enforce the rules at issue. Accordingly,

Plaintiffs seek a declaration of the unconstitutionality of the rules codified at 1 CCR 212-2, Series R1104 (Advertising: Television), R1105 (Advertising: Radio), R1106 (Advertising: Print Media), R1107 (Advertising: Internet), R1108 (Advertising: Targeting Out-of-State Persons Prohibited), and R1111B (Outdoor Advertising Generally Prohibited), and request immediate injunctive relief to prevent Defendants from enforcing these unlawful restraints on free speech. 12. The rules at issue state, in pertinent part: R 1104 Advertising: Television A. Television Defined. As used in this rule, the term television means a system for transmitting visual images and sound that are reproduced on screens, and includes broadcast, cable, on-demand, satellite, or internet programming. Television includes any video programming downloaded or streamed via the internet. B. Television Advertising. A Retail Marijuana Establishment shall not utilize television Advertising unless the Retail Marijuana Establishment has reliable evidence that no more than 30 percent of the audience for the program on which the Advertising is to air is reasonably expected to be under the age of 21.

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R 1105 Advertising: Radio A. Radio Defined. As used in this rule, the term radio means a system for transmitting sound without visual images, and includes broadcast, cable, on-demand, satellite, or internet programming. Radio includes any audio programming downloaded or streamed via the internet. B. Radio Advertising. A Retail Marijuana Establishment shall not engage in radio Advertising unless the Retail Marijuana Establishment has reliable evidence that no more than 30 percent of the audience for the program on which the Advertising is to air is reasonably expected to be under the age of 21. R 1106 Advertising: Print Media A Retail Marijuana Establishment shall not engage in Advertising in a print publication unless the Retail Marijuana Establishment has reliable evidence that no more than 30 percent of the publications readership is reasonably expected to be under the age of 21. R 1107 Advertising: Internet A Retail Marijuana Establishment shall not engage in Advertising via the internet unless the Retail Marijuana Establishment has reliable evidence that no more than 30 percent of the audience for the internet web site is reasonably expected to be under the age of 21. See also Rule R 1114 Pop-Up Advertising. R 1108 Advertising: Targeting Out-of-State Persons Prohibited. A Retail Marijuana Establishment shall not engage in Advertising that specifically targets Persons located outside the state of Colorado. R 1111 Signage and Advertising: Outdoor Advertising B. Outdoor Advertising Generally Prohibited. Except as otherwise provided in this rule, it shall be unlawful for any Retail Marijuana Establishment to engage in Advertising that is visible to members of the public from any street, sidewalk, park or other public place, including Advertising utilizing any of the following media: any billboard or other outdoor general Advertising device; any sign mounted on a vehicle, any hand-held or other portable sign; or any

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handbill, leaflet or flier directly handed to any person in a public place, left upon a motor vehicle, or posted upon any public or private property without the consent of the property owner. 13. Under state law in Colorado, it is legal to cultivate and distribute marijuana for

medical purposes. Colo. Const. art. XVIII, 14; Colo. Rev. Stat. (C.R.S.) 12-43.3-101 to1001. 14. Voters recently took marijuana legalization a step further and passed, by

referendum, Amendment 64 to the Colorado Constitution, which legalizes the recreational production and sale of marijuana and possession of up to one ounce of marijuana. Colo. Const. art. XVIII, 16. 15. The constitutionally-mandated regulatory scheme governing Retail Marijuana

Establishments instructs the Colorado Department of Revenue or its successor agency to establish requirements to prevent the sale or diversion of marijuana and marijuana products to persons under the age of 21, and to adopt restrictions on the advertising and display of marijuana and marijuana products. Colo. Const. art. XVIII, 16(5)(a)(V) and (VIII). 16. The Colorado Constitution calls for the regulation of marijuana in a manner

similar to alcohol. Colo. Const. art. XVIII, 16(1)(b). 17. The Colorado Legislature recently enacted the Colorado Retail Marijuana Code,

House Bill 13-1317 (the Retail Marijuana Code), addressing the regulation of marijuana, which Defendant Hickenlooper signed into law. 18. Section 12-43.4-202(3)(c), C.R.S., of the Retail Marijuana Code requires the State

Licensing Authority to promulgate rules on the subject of signage, marketing, and advertising restrictions that include, but are not limited to, a prohibition on mass-market campaigns that have a high likelihood of reaching minors. See 12-43.4-202(3)(c)(I), C.R.S.

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19.

The MED promulgated Permanent Rules Relating to the Colorado Retail

Marijuana Code on September 9, 2013, pursuant to the state Administrative Procedure Act, Title 24, Article 4, C.R.S. (2013), including Rule R 1100 Series, which regulate and restrict signage and advertising. 20. The Permanent Rules Relating to the Colorado Retail Marijuana Code, R 103,

define advertising as: [T]he act of providing consideration for the publication, dissemination, solicitation, or circulation, visual, oral, or written, to induce directly or indirectly any Person to patronize a particular a Retail Marijuana Establishment, or to purchase particular Retail Marijuana or a Retail Marijuana Product. Advertising includes marketing, but does not include packaging and labeling. Advertising proposes a commercial transaction or otherwise constitutes commercial speech. 21. Government restrictions on commercial speech that concerns lawful activity and

is not misleading violate the First Amendment unless (1) the asserted governmental interest is substantial; (2) the regulation directly advances the governmental interest asserted; and (3) the regulation is not more extensive than necessary to serve the asserted governmental interest. Utah Licensed Bev. Ass'n v. Leavitt, 256 F.3d 1061, 1066 (10th Cir. 2001) (citing Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557, 566 (1980)) (Central Hudson test). 22. The following Permanent Rules Relating to the Colorado Retail Marijuana Code

violate the First Amendment because they regulate lawful and non-misleading commercial speech concerning Retail Marijuana Establishments, and fail at least the second and third prongs of the Central Hudson test set forth above: Series R1104 (Advertising: Television), R1105 (Advertising: Radio), R1106 (Advertising: Print Media), R1107 (Advertising: Internet), R1108

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(Advertising: Targeting Out-of-State Persons Prohibited), and R1111B (Outdoor Advertising Generally Prohibited). 23. Defendants have not and cannot produce sufficient evidence to demonstrate that

any of its heavy-handed restrictions at issue directly advance any arguably substantial government interest(s). 24. Additionally, the regulations at issue all irrationally single out Retail Marijuana

Establishments for more stringent advertising restrictions than those regulating the alcohol industry although the Colorado Constitution calls for the regulation of marijuana in a manner similar to alcohol. Colo. Const. art. XVIII, 16(I)(b). 25. For example, the regulations mandate restrictions on television, print, Internet and

radio advertising (prohibiting all such advertising unless the Retail Marijuana Establishment has reliable evidence that no more than 30 percent of its audience is reasonably expected to be under the age of 21) that mirror standards the alcohol industry voluntarily follows, and essentially ban all outdoor advertising. 26. A ban placing only partial limits on speech is . . . subject to the same standard of

First Amendment review that would be applied to a complete ban. Leavitt, 256 F.3d at 1077. 27. The aforementioned regulations also are more extensive than necessary to

advance any arguably substantial state interest(s) because they each have a uniformly broad sweep that demonstrates a fatal lack of tailoring. 28. [T]he governmental interest in protecting children from harmful materials . . .

does not justify an unnecessarily broad suppression of speech addressed to adults. Reno v. ACLU, 521 U.S. 844, 875 (1997).

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29.

Additionally, the availability of . . . options . . . which could advance the

Government's asserted interest in a manner less intrusive to . . . First Amendment rights, indicates that [the regulations at issue are] more extensive than necessary. Rubin v. Coors Brewing Co., 514 U.S. 476, 491 (1995). 30. Plaintiffs wish to solicit customers engaged in the lawful business of selling

marijuana-related products and services to advertise in Plaintiffs media. 31. The penalties for Retail Marijuana Establishments for violating each of the

regulations at issue include, but are not necessarily limited to, a written warning, license suspension, a fine per individual violation, a fine in lieu of suspension of up to $50,000, and/or license revocation depending on the mitigating and aggravating circumstances. Sanctions may also include restrictions on the license. 1 CCR 212-2, R 1307(A)(2). 32. Each of the regulations at issue would reasonably chill a corporation of ordinary

firmness from engaging in the prohibited activity. 33. As a result of each of the regulations contested herein, Plaintiffs are chilled from

soliciting advertisements from prospective clients and prevented from making revenue from clients who wish to engage in advertising concerning marijuana-related products and services. 34. Prospective clients for Plaintiffs are likewise chilled from carrying and seeking to

advertisements concerning marijuana-related products and services through Plaintiffs media, to Plaintiffs and the publics great detriment. V. STATEMENT OF CLAIMS

1983 and 1988 First Amendment and Fourteenth Amendment Violations Unconstitutional Restraint on Free Speech 35. All statements of fact contained within this Complaint are hereby incorporated into

this claim as though fully set forth herein.

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36.

The enforcement and operation of Defendants restraints on Plaintiffs speech

violate Plaintiffs First Amendment rights to speak and to listen to ideas surrounding protected commercial speech about Retail Marijuana Establishments. 37. Defendants restrictions fail to directly advance any substantial government

interest(s), and are more extensive than necessary to serve any substantial government interest(s). 38. Plaintiffs and the public at large who desire to engage in a protected exchange of

ideas will suffer irreparable harm if Defendants are not immediately enjoined from unduly restricting Plaintiffs speech. VI. PRAYER FOR RELIEF

WHEREFORE Plaintiffs respectfully request that this Court: a. Issue a declaratory judgment that the enforcement of the MEDs Permanent Rules

Related to the Colorado Retail Marijuana Code, sections R1104 (Advertising: Television), R1105 (Advertising: Radio), R1106 (Advertising: Print Media), R1107 (Advertising: Internet), R1108 (Advertising: Targeting Out-of-State Persons Prohibited), and R1111B (Outdoor Advertising Generally Prohibited) would deprive Plaintiffs of their rights to free speech, in violation of the First Amendment to the United States Constitution; b. Issue an injunction against Defendants barring them from in any way enforcing

the restraints on Plaintiffs speech; c. Award Plaintiffs their costs, expenses, and reasonable attorneys fees pursuant to

42 U.S.C. 1988; and d. Grant such other and further relief as this Court deems just and proper.

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DATED this 10th day of February, 2014. KILLMER, LANE & NEWMAN, LLP s/ David A. Lane__________________ David A. Lane Darold W. Killmer Michael P. Fairhurst 1543 Champa Street, Suite 400 Denver, CO 80202 (303) 571-1000 dlane@kln-law.com dkillmer@kln-law.com mfairhurst@kln-law.com Attorneys for Plaintiffs

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