A guest blog post from Nicole Gaither
Protecting your brand should be a high priority for your business. But what if your business sells a product that is legal in your state but not on the federal level?
You’ve probably heard by now that CBD is legal. There are CBD-infused dog treats, face creams, smoothies, coffee, herbs, brownies, waffles, cocktails – you name it. (I have been focusing on food a lot these days. I will explain in due time.) Adding CBD to some of your existing products can give your business higher profit margins (or that’s what I’ve heard).
As more states legalize marijuana, there has been a push for legalization at the federal level. However, marijuana-based businesses that want to protect their brands will run into problems at the federal level.
Federal trademark registration is not allowed for marijuana-derived products. Federal trademark law prohibits registration of products that are illegal to sell across state lines, even if legal in your state. Since marijuana is still illegal in some states, the sale of it across state lines is a crime.
On December 20, 2018, the 2018 Farm Bill was signed. It removed hemp from the Controlled Substances Act’s (CSA) definition of marijuana. This means that cannabis plants and derivatives like CBD that contain less than 0.3% THC on a dry weight basis are no longer controlled substances under the CSA. But this applies to the CSA only – not the Food and Drug Administration (FDA) regulations. And keep in mind that the products must be derived from “hemp.”
So, can I protect the name of my CBD products?
Let’s break this down. If you are in the business of selling CBD products derived from hemp and that contain less than 0.3% THC, you can register your trademark on the federal level. But it depends on the product. Right after the Farm Bill became law, the FDA stated that any hemp-based CBD product that is marketed as having therapeutic benefits or used as a dietary supplement is illegal unless reviewed and approved. This restriction includes food and drink.
Some states and cities are starting to crack down on this. For example, New York City is going after restaurants that put CBD in food. Louisiana has declared that all CBD sales (food, drink, and oils) are still illegal.
But is it legal for you to sell CBD products if allowed in your city and/or state? It depends. (Of course, it does.) It depends mainly on how you plan to use it, how it is labeled, and how you market it. Remember, food and drinks with CBD are illegal under the FDA. This includes dog treats. And since these are illegal, it means that your federal trademark application for your foods, beverages, dietary supplements, or pet treats containing CBD will be refused.
Never fear… there are still some ways that you can protect your marijuana and cannabis business brand.
1. Register for state trademark protection. You can file to register your trademark in your state if it is legal. Every state has trademark laws that are similar to the federal laws. State registration can prevent a local competitor from using a mark/brand that is confusingly similar to yours if you were the first to use it. This will not give you rights to go after a company with a similar name in another state.
2. Register for federal protection for your non-cannabis based products and services. If you have other products and services that you sell as a part of your business, you can register your mark for federal protection based on those. If you have a website about marijuana, it can be registered as long as it does not include information about how to grow it. It must provide information such as data about cannabis or where to locate dispensaries.
You can register the merchandise your business sells under the brand name – t-shirts, hats, bags. Keep in mind that you cannot use the brand just as a graphic on the t-shirt if you are seeking protection. It must be used on a tag (like on the back of the shirt), a hanging price tag, or something that provides information to your customers that your business is the source and brand of that shirt.
3. You can register related products. If your company has not considered selling non-banned related products, it should. For instance, if your company sells edible products, consider a line of non-THC versions of those products to sell interstate. Keep in mind that you must continue to sell those products if you wish to maintain your federal trademark rights even if and when marijuana is legalized on the federal level.
Keep in mind that the same federal trademark rules apply in the marijuana/cannabis industry. Your brand name must not be confusingly similar to another company. You could open yourself up to liability for trademark infringement. Your name must be one that can be protected (that is, not generic, merely descriptive, or misdescriptive). Furthermore, it must be used as a source identifier for your goods or services.
You may be limited but by taking these steps now, you can make money moves in the industry and develop your long-lasting, protectable brands.
Disclaimer: This information is provided for educational use only. It is not intended to be legal advice or used as such. This information does not create an attorney-client relationship. If you need specific legal advice in this area, you should consult a trademark attorney.
Buy from a Black Woman Contributing Writer
Nicole Gaither, is a New Orleans girl, a hip-hop aficionado, who makes your business her business. I am a Louisiana-barred attorney and Georgia Certified Public Accountant she started Creativa IP Law with hopes to encourage her clients to think about where they want their business to go so that she can work with them to develop legal strategies that support their long-term goals.