Create a marketing plan that helps avoid a costly and damaging lawsuit
As cannabis breaks into the realm of legal businesses, branding experts and patent lawyers are keys to a bright future.
There are few cases in this country like that of cannabis legalization, with each state writing different laws and all of them still illegal under federal legislation. The paradox of state-legal, but federally illegal cannabis doesn’t stop with law enforcement. It also delves into the complicated world of intellectual property.
For example, glass pipe manufacturer Roor filed a lawsuit against a company selling counterfeit versions of its products in Florida, but the federal illegality of the product may trump the ability for bongs to be trademarked in the first place. This puts a magnifying glass on much larger issues like edibles designed as imitations of other, trademarked candies.
One must ask: How do we navigate this tricky world while branding a new company?
Federal Level Involvement in Cannabis
This past summer, everyone interested in cannabis had their eyes fixated on the DEA, hoping the agency would remove the plant from the Schedule I substances that have no medicinal value and a high potential for abuse. Rescheduling would allow more laboratories to research the benefits of cannabis, creating studies and generating results that could lead to further legalization. Instead, the DEA determined that cannabis would remain a Schedule I narcotic, classified as more dangerous than Schedule II drugs like cocaine, methamphetamine and oxycodone.
After this denial of rescheduling, the media pointed out the hypocrisy of Patent No. 6,630,507 for cannabis oil, held since 2003 by none other than the United States government. This very specific patent is for non-psychoactive oil derived from the cannabis plant for use in treating medical issues such as psoriasis and showed the Feds’ interest in the plant’s medicinal value.
In August 2015, an additional patent was quietly granted to a group of cannabis breeders in California. Unlike its predecessor, Patent 9095554 was granted for a plant with a high level of THC. Though it has not been highly publicized, patents are apparently allowed in the U.S. for cannabis.
According to the 2016 article, “What A Looming Patent War Could Mean For the Future of the Marijuana Industry,” published by Vice News, an anonymous spokesperson for the U.S. Patent and Trademark Office stated, “In general, the (patent) office issues both utility and plant patents to all types of plants, including cannabis and poppy, provided the applications meet and comply with the applicable patent statutes.”
The spokesperson added, “there are no special statutory requirements or restrictions applied to marijuana plants.”
The Cookies Saga
Earlier this year, the Girl Scouts of America stepped up its efforts to protect its trademark by setting its sights on the cannabis industry.
In early January, the California-based dispensary Magnolia Oakland received a cease-and-desist letter from the nonprofit claiming exclusive rights to the name “Girl Scout Cookies,” according to a story published by The Marijuana Times.
The dispensary immediately pulled all products labeled with the name. Many other dispensaries received similar letters and quietly followed suit, but the real problem lies with the people who bred and marketed what has become a must-have strain.
It could be said that growers who promoted these products wasted the successful and potentially expensive marketing programs that helped get them where they are today. Opening the door to patents also opens the door for trademark lawsuits on countless companies that haven’t adapted to a legal market, so marketing professionals must play it smart from day one of a brand’s launch. Companies that are already in violation of trademark or patent law are going to have to rebrand. Having a marketing professional and a well-versed patent lawyer on staff would be ideal, but following a few tips can help any cannabis entrepreneur build a brand that won’t be easily stomped out.
Do The Research
There are a lot of cannabis companies, so most puns and culture-centric names — like those involving “420” and “Ganja” — have already been used. Because of this, research every company, product and website for a name or brand before making your decision. Don’t just Google the brand name and call it a day. Look everywhere. Now that the cannabis industry has moved into mainstream business, everyone is taking note. The industry no longer exists in limbo. Check with the patent office and be sure to look on every cannabis menu website, such as WeedMaps and Leafly to make sure a version of your name doesn’t already exist. (It’s also worth checking Secretary of State websites for already registered businesses that might cause a conflict.)
The cannabis industry no longer has to take what it can get. The modern consumer is quite discerning when choosing brands. For this reason, it is imperative that what we introduce into the world adds to it rather than reproducing an existing product. Cutting-edge companies add something to the market, so make sure you have something new before spending the time and money marketing a new brand.
Companies with products that are puns of real candy bars or other products that might infringe on trademark rights should immediately rebrand. While many brands worry about losing their customer base if they change their name or the recipe for a top-selling product, applying some specific techniques while planning a rebrand will help the customer remain loyal, even if it is subconsciously.
There may be big changes ahead for a company looking to rebrand in hopes of avoiding a cease-and-desist order, but some aspects of the branding can and should stay in place. For example, an edible product may have to change its name and packaging, potentially causing lower profits as consumers dissociate from the brand. Instead of an all-out overhaul, consider keeping the font, packaging and colors the same while changing the brand name. Also, try to keep the number of letters — and perhaps the first letter — of the brand name the same, but change the rest so that it will comply with trademark and patent laws. These small details can make the rebranding transition seamless and help minimize profit losses.
The cannabis industry is currently made up of quite a few small businesses. Taking a hit like a lawsuit from a major candy company or huge nonprofit might close the doors. Avoiding a cease-and-desist letter by rebranding now is the best way to stay on top of an issue like intellectual property rights.
Celeste Miranda is CEO and founder of The Cannabis Marketing Lab. She has helped countless entrepreneurs with business development and branding. She is a regular speaker at major industry events and recently launched a nonprofit called MC4MS (Medical Cannabis 4 Multiple Sclerosis).