Abstract: Higher-spin gravity in three dimensions is efficiently formulated as a Chern-Simons gauge-theory, typically with gauge algebra sl(N)+sl(N). The classical and quantum properties of the higher-spin theory depend crucially on the embedding into the full gauge algebra of the sl(2)+sl(2) factor associated with gravity. It has been argued previously that non-principal embeddings do not allow for a semi-classical limit (large values of the central charge) consistent with unitarity. In this talk after reviewing higher-spin gravity in three dimensions and the corresponding argument we show that it is possible to circumvent these conclusions.