Can California ban gun stores from advertising handguns on their signs?

No, argues Tracy Rifle & Pistol LLC v. Harris (E.D. Cal. filed Nov. 10, 2014), a just-filed case in which I've been hired to consult. Cal. Civil Code § 26820 (which was first enacted 1923, but is still being enforced today) provides,

No handgun or imitation handgun, or placard advertising the sale or other transfer thereof, shall be displayed in any part of the premises where it can readily be seen from the outside.

That, we argue, violates the First Amendment. The government generally may not ban advertising of lawful products—indeed, of constitutionally protected products—on the grounds that such advertising is offensive, or stimulates consumer interest in such products. We'll be filing a more detailed legal argument in due course (what I link to is just the Complaint); when that happens, I'll post it as well.

Many thanks to California Association of Federal Firearms Licensees, The Calguns Foundation, and Second Amendment Foundation for their support of the case. The plaintiffs also include, besides Tracy Rifle & Pistol, Sacramento Black Rifle, Ten Percent Firearms, PRK Arms, Michael Baryla, Robert Adams, Wesley Morris, and Jeffrey Mullen.