Businesses preparing to market a new product nationally must follow the rules of trademark law, as well as marketing and advertising claims under state and U.S. laws when creating a trademark, advertising copy and copyright-registered packaging for the product. In cases where the product is illegal under some federal laws, but legal under some state and federal laws, marketing is complicated — particularly for cannabis and CBD products. As an example, the U.S. Patent and Trademark Office allows patents for cannabis inventions but prohibits registering trademarks for cannabis and cannabis products.
Laws on Legalized Cannabis
In the United States, cannabis remains a Schedule I illegal substance under the Controlled Substances Act, and although 33 states and the District of Columbia have passed laws legalizing cannabis for either medical or recreational use, there is no uniform set of state laws for marketing legal cannabis at this time.
Cannabis businesses in states that have legalized medical or recreational cannabis or CBD face a chaotic regulatory landscape with respect to marketing or advertising health claims for their products. In Maryland, for example, the state’s Medical Cannabis Commission initially instituted stringent advertising restrictions on growers, processors, dispensaries, independent testing laboratories and their third-party vendors. The initial restrictions included prohibitions against medical cannabis businesses advertising their goods and services on radio, television, billboards and in print publications unless 85% of the audience were 18 or older. Further, advertising was prohibited on signs on public property and on private property unless the owner consented. Medical cannabis providers were also:
– required to adhere to Maryland Board of Physicians advertising regulations;
– prohibited from making false and misleading statements;
– required to make a statement that the product is for use by a qualifying patient only;
– required to provide warnings for the health risks associated with consumption of the product; and
– required to provide other warnings that may be needed by the commission.
Updates in Maryland
Cannabis businesses in Maryland found the initial regulations constituted a total ban on advertising, so on December 31, 2018, the commission sent a legislative report to Maryland’s General Assembly that laid the groundwork for several bills submitted during the 2019 legislative session. The resulting law requires that all advertisements for medical cannabis products or medical cannabis-related services that make therapeutic or medical claims must be supported by substantial clinical evidence or data and include information on the most significant side effects or risks associated with use.
It further prohibits any advertisement for a grower, processor, dispensary, independent testing laboratory, certifying provider or third-party vendor from making any statement that is false or misleading in any material way or is otherwise a violation of the Maryland Consumer Protection Act; or containing a design, illustration, picture or representation that encourages or represents the recreational use of cannabis, targets or is attractive to minors, displays the use of cannabis, encourages or promotes cannabis for use as an intoxicant or is obscene.
All advertising for medical cannabis must include a statement that the product is for use by a qualifying patient only. Any website owned, managed or operated by a certifying provider, dispensary, grower or processor must employ a neutral age-screening mechanism to verify that users are at least 18. An advertisement placed on social media or a mobile application must include a notification that a person must be at least 18 to view the content and that medical cannabis is for use by certified patients only.
Any advertisement for medical cannabis or medical cannabis-related services may not be placed within 500 feet of a substance abuse or treatment facility; a primary or secondary school in the state; a licensed child care center; a registered family child care home; a playground; recreation center; library; or public park.
Recently Maryland issued regulations stating the penalties for violations of the advertising rules: $500 for the first violation; $1,000 for the second violation, if within 24 months of the first violation; and $5,000 for each subsequent violation, if within 24 months of a prior violation.
The Food and Drug Administration is aware that several states have either passed laws that remove state restrictions on the medical use of cannabis and its derivatives or are considering doing so. It welcomes the opportunity to talk with states that are considering support for medical research of cannabis and its derivatives so that it can provide information on federal and scientific standards.
When considering marketing or advertising a cannabis or CBD product nationally, companies must understand the federal statutes that pertain to health claims, packaging and branding. It is important that they conduct medical research into the safety and effectiveness of cannabis products through adequate and well-controlled clinical trials. Companies must follow the USPTO’s rules, understand common-law trademark principles and study state laws on cannabis marketing in order to have a solid framework to avoid the attention from federal and state regulators, as well as the potential for class action lawsuits.
Cynthia Blake Sanders is of counsel in Baker Donelson’s Baltimore office. An experienced intellectual property and entertainment attorney, she focuses her practice on copyright, trademark, advertising, arts and media law matters. She can be reached at firstname.lastname@example.org.