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Trademark Protection Challenges and Strategies for U.S. Cannabis Businesses

Trademark Protection Challenges and Strategies for U.S. Cannabis Businesses
by Sean Sonnenberg

January 30, 2019

By: Alex Simser

In almost every industry, businesses expend significant capital and resources to develop their brand, which, although intangible, is often the most valuable piece of property a business owns. Brands that are federally registered as trademarks are afforded broad protection under U.S. trademark law. But in the cannabis world, it’s still the Wild West – cannabis-related trademarks are not protectable under federal law and are susceptible to seemingly unfettered infringement.

Despite the widespread legalization of cannabis at the state level, and the establishment of numerous well-known cannabis brands, the federal Controlled Substances Act (CSA) still prohibits the sale, distribution, dissemination and possession of marijuana, whether for medical or recreational purposes. Because federal law preempts state law, the U.S. government, including the U.S. Patent & Trademark Office, will not permit the marijuana industry to benefit from many of the privileges otherwise available under federal law, including federal trademark protection. Such protection is reserved for trademarks that are in “lawful” use in interstate commerce.

But cannabis businesses aren’t completely without recourse in protecting their brands. Registration may be available under state law, and federal registration may be available for certain goods or services the business sells that are ancillary to cannabis sales, such as t-shirts, lighters, or other accessories. Federal registration may also be available if the trademark owner can establish that the cannabis product does not meet the definition of marijuana under the CSA, which excludes the stalks of the plant and oils derived from the seeds.

Cannabis businesses should consider international registration as well, particularly in Canada, where trademark registration is soon-to-be much easier, due to a change in the law effective in 2019 which removes the requirement that a mark be “used” in commerce prior to registration. This means that U.S. businesses that haven’t used their mark in Canada may still be able to register it there.

While federal law imposes some barriers to trademark protection, cannabis trademark owners must still continue to police their marks in order to establish and maintain trademark rights, and prepare their brand for federal registration once the law eventually changes.

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