Is handing out cd's on the street of your own music illegal?

A buddy of mine is a rapper, caucasion, both me and him are, and I help him promote, and we just started promoting his first demo cd that is professionally recorded at a local studio with 9 tracks. We went to a nearby city near our home town after a big rap concert was over, Lil Wayne, Niki Minaj, Travis Barker, and Rick Ross, and walked up and down the street handing out free demo cd's to people walking to their cars after the concert was over. We just said, check this out, free demo, let me know what you think, I'd appreciate it. Some took the cd and some did not? We did not hand out to many, but the cd's we did hand out to half of them happened to actually be local rappers where they were from, and one random person worked at the club, where the after party was going to be at after the concert, and Lil Wayne was going to head over to that club after the concert. We didn't know he even worked at the big hip hop club, just randomly happened to walk by his car, so we got something accomplished last night. You never know what hands the demo cds got into, but some of them were rappers. Don't know too much about the business laws of the music business and promotional laws, but can a local artists just walk the streets of a city, or sit at gas stations, and hand out free demo's? I wouldn't think it is, but I know a local rap artist here, and she has her own music booth that she pays money for to use at a flea market to sell her cd's and to promote. A group of black people in a Capris happened to be rappers, and I went up to their car at a gas station, and they said we are rappers, and one dude said, I hope you aren't bull shittin us, because I don't look like a rapper or anything, my buddy is, and I said no, he is tryin, just appreciate it if you would check him out, so we did get some negative vibes when we trying to hand out demos. My buddy still has to grow, but he's got some songs that go really hard with real talk and good lyrics, just that a couple people were skeptical and didn't take a cd from us. Would there be like a fine or something, cuz there were cops up and down the street, by the collesium the concert was at when we were handing out the demos?