Both in the US and Canada, the current view of business owners and entrepreneurs in the marijuana industry is that they cannot protect the brands they use or brand their existing products related directly or indirectly to cannabis or its by‑products. The belief may present itself as well‑founded, but it is inaccurate! These ‘marijuana marks’ can be protected and it is advised to do so.
The protection of marijuana products and the marijuana mark demands an in‑depth knowledge of the rules and regulations formulated by the United States. A clear insight into the current position of the marijuana industry and where it will be in the future is crucial for the survival of any entrepreneurial venture or product in marijuana. It is critical to come up with a strategy for the protection of both marijuana and its related by‑products.
The legalization of Marijuana in California (or the golden state) momentarily uplifted the mood for both the users and the manufacturers in the weed industry. But the dawn of the new, more conservative presidential reign made its presence known by merely showering some empty threats. It should be kept in mind that selling marijuana and its related products legitimately in an illegitimate situation cannot be considered a healthy business ambiance.
There are several questions that were left unanswered with the shift in American administration that took place in the year 2016. One of these is the need of trademarking marijuana and its by‑products.
Issues with Trademark registration in the weed industry
The USPTO (or The United States Patent and Trademark Office) is the governing body in the United States that oversees all the applications for trademarks and patents. USPTO examining authority will refuse to register marks and provide rights to any individual or entity if the concerned party violates the ‘Lawful Use Rule.’ Violation of the Lawful Use Rule occurs when the application of the applicant is against the regulations of the federal law, i.e., the CSA (or Controlled Substances Act).
As per the rules set by the CSA, the distribution, manufacturing, processing or dispensing of certain controlled substances including marijuana and its by‑products is illegal. The production, distribution, dispersion or possession of certain controlled substances, including cannabis and preparations made with marijuana is prohibited under the Controlled Substances Act. Further, as per the regulations put in place by CSA, it is unlawful to sell infrastructure/property to carry out transport and commerce of drugs, drug processing equipment, bongs, vaporizers, marijuana grinders, etc.
USPTO Ban on registration of Trademarking marijuana
In simple words, the USPTO will not issue a registration to trademarks of marijuana and its by‑products. In the beginning, the governing body didn’t have such strict rules in place for the marijuana industry. After the herb was legalized in the state of California, officials at the USPTO kept their doors open for the entrepreneurs in the weed industry. The gavel hit the deck from the USPTO’s side when there was a sudden surge in incoming applications for registering trademarks for marijuana and marijuana‑based products. The inflow of applications was so high that at one point in time the officials found themselves buried beneath the paperwork that needed sorting and scrutiny.
The incident led the officials to close their doors for new applications pertaining to cannabis trademark registration for new companies in the weed industry. They subsequently returned the application fees to the respective applicants.
The USPTO is especially strict with trademark applications where the name of the trademarks suggests it has something to do with “marijuana”. So all “MARIJUANA”, “CANNABIS”, “BONG”, “WEED”, “CUSH”, “GRASS”, “DOPE” trademark applications are immediately under scrutiny and if there are any of the products in the application that have something to do with marijuana such as weighing scales, vaporizers and grinders. Most likely such a company may still receive an objection from the Trademarks Office if an examining attorney has suspicions that applicant doesn’t have genuine intention to use the applied‑for mark legally in commerce.
Across the United States of America, legalization is still a debated issue. While some states have already approved its consumption and usage, some states are thinking towards the legalization. Marijuana is fully legalized for both medical and recreational needs in the District of Columbia. Another 13 states have legalized the psychoactive medical marijuana. 12 more states have accorded decriminalized possession laws for medical marijuana and discrimination law while only 3 states and 2 inhabited territories.
Update (July 29, 2018): The Federal Government of Canada legalized the distribution, production, and sale of cannabis and its by‑products on July 1, 2018. Legislation for the same has been tabled and when the Government shared the news for the same to the public and media, the shares of Canadian marijuana companies skyrocketed.
As of October 17, 2018 it will be possible and legal to buy marijuana in Canada.
As per the analytical reports of the Canaccord Genuity in the later part of 2016, if the legalization process of cannabis is carried over within the proposed timeline, the country will be home to over 4 million legal users of marijuana. If the calculations were correct, the total market value of legal marijuana would be close to $6‑billion annually.
Canadian outlook on marijuana
When countries around the world are curbing the development of the marijuana industry, Canada is setting an example in this sector. They are building the necessary infrastructure to create business opportunities for marijuana entrepreneurs to conduct their business operations within the country legally. The United States poses several legal and financial barriers to the entrepreneurs in the marijuana industry. It is a direct result of the discrepancies amongst the different states of the United States that includes a lack of access to financial backing from the traditional banking systems. On top of that, the tax deductions and several other complicated laws within the United States Code sum up to make the US an unwelcoming destination for the marijuana industry.
The new and improved, more ‘hospitable’ business ambiance of Canada’s will undoubtedly lure in new investors and innovators to make the marijuana industry success.
The Federal Government of Canada allows the cultivation of marijuana through the hands of a controlled number of large‑scale growers. It is a practice that removes the middlemen or so‑called ‘dealers’ who previously serviced both the streets and the legal market.
Canada is the new and attractive destination for investors looking to invest their resources in the development of marijuana‑based products and by‑products for both medicinal and recreational use. By the summer of 2018, Canada is expected to fully legalize recreational marijuana, which will make it the first industrialized country to legalize and regulate marijuana from production to consumption.
In Canada, it is possible to obtain trademark protection for a trademark that is proposed to be used with marijuana and marijuana‑related goods and services. Recently there has been a huge increase in trademark applications for marijuana and marijuana-related products.
The situation in Canada is indeed a surprising story for both the users and the providers in the United States who have been struggling to get their trademarks registered with the USPTO. Even if weed is legalized in many states of the US, it is still recognized as a controlled substance under the United States Federal Law and as such, it is not possible to trademark.
The goal of this article was merely to emphasize the fact that trademarking marijuana is a substantial business opportunity for the future. It is still a sector for both the investors and the entrepreneurs where the shadow of competition and saturation still awaits. The trademarking marijuana and its by‑products are available in the United States. But the catch is, interested parties need to go through several channels of the Federal Government viz. common law, federal registration, and state registration.
The Marijuana industry is projected to become a $50 billion business sector by the end of 2026! It can only happen if the taboo of the herb is broken, subsequently taking the industry out of the shadows and into the mainstream.
Updated July 29, 2018