The cannabis industry is at an all-time high, with many states legalizing medical and recreational marijuana and brands saturating the marketplace with cannabis products in every corner. However, at the federal level, marijuana remains illegal under The Controlled Substances Act (“CSA”). This disconnect between commercial reality and the current regulatory environment leaves brand owners in a conundrum: how can they protect and enforce their cannabis trademarks?
Most cannabis trademarks remain ineligible for federal trademark registration. Trademarks for goods or services derived from marijuana (which contains more than 0.3% THC on a dry-weight basis) still violate federal law and are not registrable for any category of goods or services. Under the “unlawful use” doctrine, the U.S. Trademark Office maintains that because marijuana is illegal under the CSA, it is impossible for a trademark applicant to have the requisite bona fide intent to use its mark for marijuana goods or services, or to have made any “lawful” use of its mark in commerce that would support registration.
There is a narrow subset of cannabis goods and services that can be federally registered: hemp products that are not be subject to regulation by the Food and Drug Administration (“FDA”). The 2018 Farm Bill removed “hemp” from the CSA’s definition of marijuana, thereby legalizing cannabis and cannabis derivatives (such as CBD) that contain no more than 0.3% THC. However, because the FDA is still investigating CBD in products like food, beverages, dietary supplements, and pet treats, it is not possible to register trademarks for CBD goods even if they contain less than 0.3% THC.
What is and is not registrable is only part of the problem. A federal registration is not required to enforce a trademark against infringers, yet cannabis brands also do not have certainty in the enforceability of their unregistered rights. Federal courts have inconsistently applied the “unlawful use in commerce” doctrine, allowing some brands to enforce their unregistered cannabis trademarks against infringers, while characterizing others as unlawful users without a legitimate trademark to enforce.
Given the interplay of state and federal regulations and the circuit split on the enforceability of cannabis marks, brand owners must rely on creative workarounds to protect their trademarks to the fullest extent possible. One common strategy is to seek registration of the trademark for ancillary products such as hats, apparel, chewing gum, or website information services. By doing so, the brand owner will have created a “fence” around its rights on the federal Trademark Register, paving the way for a cannabis application if and when it is possible to do so. For example, Trans-High Corporation, the publisher of HIGH TIMES magazine, owns over 20 federal applications and registrations for everything from bakery goods to t-shirts to posters. Another strategy is for companies to manufacture two versions of their products: such as a cannabis-infused beverage and a non-infused version of the beverage. By registering the trademark for the non-infused beverage, the company will likely have created an umbrella of protection that would benefit the infused beverage as well.
Maneuvering the maze of cannabis laws and, more importantly, their exceptions, will allow brand owners to stay ahead of the competition and poised to profit if and when federal regulations subside.
by Danielle Maggiacomo, Counsel
Srinidhi Krishnan, Intern