Protect your cannabis brand in the Tri-State

BY JESSICA F. GONZALEZ, ESQ.

With New Jersey, New York, and Connecticut all legalizing adult use cannabis within months of each other, it’s only a matter of time before each state begins the process of accepting applications for adult use cannabis licenses. Though each state will differ in terms of procedures and timelines, 2022 is sure to bring a new batch of cannabis operators. As eager applicants begin to prepare for the issuance of cannabis applications in the tri-state area, it is imperative that they retain a long-term view.Though I expect the first round of licenses issued in each state to be conservative in number along with competitive licensing schemes (mixed with lotteries and conditional licensing routes), that will not always be the case. As new companies are born from sheer demand, a plethora of cannabis brands will begin to saturate the market in the tri-state.

Part of my practice as an intellectual property attorney is strategically advising my clients of how to protect, enforce, maintain, and capitalize on their brands and their brands’ goodwill. Unfortunately, while companies place a huge emphasis on tangible assets, intangible assets such as intellectual property get ignored until an issue arises (and that’s when I get called in). Intellectual property (“IP”) refers to creations of the mind that derive from human creativity. IP law was born out of the need to promote the furtherance of new technology, artistic creations and inventions by providing owners with the rights to their IP. For the purpose of this article, I will focus on the facet of IP that most companies are familiar with—their trademark. If you own a company and/ or sell goods and/or offer a service, then you unknowingly already own a common law trademark! A trademark is a word, name, symbol, device or combination thereof used by a person or entity to identify and distinguish their goods or services from those sold by others. A trademark is also used to indicate the source of goods, even if that source is unknown. Besidesinstant source recognition, a trademark also benefits consumers in that it provides incentive for companies to (1) inform the public regarding the nature, origin and quality of the goods and to (2) maintain quality consistent with reputation.

Federally protected trademarks, which should always be the goal, are issued by the United States Patent and Trademark Office (USPTO). The USPTO is a federal agency that strictly adheres to federal guidelines and, because cannabis is still a Scheduled 1 “drug”, the USPTO has taken the stance that cannabis plant-touching goods and services, such as dispensaries and edibles, cannot be afforded federal trademark protection for their brand names. As such, no company in the U.S. has federal trademark protection for their cannabis plant-touching goods and services. Until federal prohibition is lifted, federal trademark protection is not possible for U.S. cannabis companies. Ancillary cannabis companies however, such as lawyers, accountants, consultants, educators etc. assisting cannabis companies (aka non-plant-touching cannabis companies) can acquire federal trademark protection.

Without proper protection, businesses leave room for third parties to stake their claim in their trademark.

- Jessica F. Gonzalez, Esq.

Although federal trademark protection should always be the ultimate goal, cannabis companies must get creative and exhaust all other routes of possible protection to comfortably build their goodwill and simultaneously prevent others from using their trademark.This includes...

1) trademarking other aspects of your business that are not plant touching, such as your website, educational services, apparel etc.

2) obtaining copyright protection for artistic works of arts such as logos; and

3) utilizing state trademark protection.

The U.S. is a “first-to-use” trademark regime which means whoever is the first to use a trademark in interstate commerce is presumed to be the owner. For this reason, it’s imperative that companies protect their trademark as soon as possible to avoid the hassle of having to initiate a legal battle over who owns the trademark. As the tri-state cannabis industry continues to evolve, companies must be thinking seriously about how they plan to expand . Without proper protection, businesses leave room for third parties to stake their claim in their trademark.

Keeping a long-term view in mind, it would behoove any new cannabis company to understand that eventually, it will be the integrity of their brand that will differentiate them from the many brands that will form and the ones that currently exist. For this reason, identification, inventory, and protection is critical.