The social stigma and legal consequences of using cannabis and cannabis-derived products are gradually fading away as more states legalize medicinal and recreational use. As of 2020, federal law still considers cannabis illegal. Yet, the tides are turning, and it’s not a stretch to say that cannabis use, possession, and sale could be legal in all 50 states within a decade. It’s a great time to plan ahead and start laying the foundation for a cannabusiness brand.
If you are already selling and marketing cannabis where it is legal or getting ready to jump on the cannabis bandwagon in the hopes that your State will soon legalize, you need to understand how to build and protect your brand.
Below are some strategies for developing a cannabusiness brand.
You Cannot Trademark Cannabis Products
The federal government considers cannabis a controlled substance in the same category as other hard drugs such as cocaine, heroin, etc. The Controlled Substances Act (“CSA”) makes it illegal to sell controlled substances across state lines. Specifically, the CSA prohibits, among other things, manufacturing, distributing, dispensing, or possessing …. marijuana and any material or preparation containing marijuana. 21 U.S.C. §§812, 841(a)(1), 844(a).
Since trademark law prohibits the registration of products that cannot be lawfully sold across state lines in the United States, you cannot apply to register a trademark for any cannabis products with the U.S. Patent and Trademark Office (USPTO).
Although you cannot apply for a trademark in connection with cannabis products on a federal level, you can take other steps to protect and build your brand.
Cannabusiness Brand and State Trademarks
For various reasons, obtaining a federal trademark registration with the USPTO is the most popular choice for brand owners. However, in addition to federal registration with the USPTO, each state also offers trademark protection.
State registration offers a way to protect your brand from local competition and prevent them from infringing your brand. Each state has their own application process and typically ask for the same information as a Federal trademark application. That information includes, but is not limited to: (a) the date of first use; (b) ownership information; (c) classes of goods/services covered; (d) a description of the mark; and (e) a specimen showing use.
While you won’t be able to use State trademark law to stop infringers in other States, a state registration can be used to stop infringers within your State. Thus, a state trademark registration is a viable option for businesses looking to build a brand and establish themselves in the local market.
While you cannot obtain a registration for cannabis-specific products, you can register non-cannabis goods with the USPTO. By doing so, you can take reasonable measures to ensure your brand, as a whole, is protected under federal law. For example, you can develop a line of ashtrays, non-cannabis herbs for smoking, or rolling papers under International Class 34, which is dedicated to tobacco and smoking items. Ultimately, you can choose items that compliment your cannabis brand. When you use your brand in connection with legal products, you can apply to register your trademark.
You could also provide services to build your cannabusiness brand. For example, you might create a website that offers educational information about cannabis and register that in International Class 041. Or, you could apply to register the retail services connected to the sale of (legal) goods in International Class 035.
Keep in mind that you should not create “fake” product lines or services. When applying to renew your trademark, you’re required to sign an affidavit stating that your sales have been continuous. Failure to maintain your sales could result in your trademark registration getting abandoned (or canceled if there is fraud involved).
Carry Hemp and Legal CBD Products
After the passage of the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), companies have started created various products from hemp. Some of these products include hemp seed oil, tinctures, lotions, and creams. To be legal, they need to have a THC concentration lower than 0.3% based on a dry-weight basis. These products are legal in most States but still subject to the authority of the Food and Drug Administration (“FDA”).
CBD is another chemical compound in the marijuana plant that has gotten much attention. However, most Applicants with CBD products run into issues because their products violate the Federal Food, Drug and Cosmetic Act. Due to the FDA’s current stance on such products, we typically advise clients making CBD products to refrain from: (a) making any claims about CBD’s medical or therapeutic benefits and (b) infusing CBD in food products.
Thus, you could hypothetically produce almost identical products that contain hemp (or CBD in some cases) rather than cannabis in the short term. Eventually, when cannabis is no longer illegal, you can start producing cannabis goods.
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