Marijuana is Coming (even to Iowa)

Posted on Friday, July 13, 2018

As marijuana  continues to trend toward the mainstream, states are adopting and reaping the benefits of legalizing the leaf. The marijuana market was valued at nearly $9 billion last year (2017) and is expected to quintuple, rolling up to $50 billion by 2026. 31 states plus the District of Columbia (D.C.) have legalized marijuana in some form, whether medical or recreational. In 2012, Colorado and Washington became the first states to legalize cannabis for recreational use.  To date, nine states and D.C. have now legalized marijuana entirely. This trend will continue.

If you would like to know whether your state has legalized marijuana, here is a link to an interactive map showing which states have legalized marijuana:

http://www.governing.com/gov-data/state-marijuana-laws-map-medical-recreational.html

As smoke signals billow from state to state, the marijuana momentum builds. As the industry emerges, marijuana brands will continue to gain traction. These brands will garner extraordinary value for their owners. Furthermore, registering these brands as trademarks before the flood of registrations start pouring in will give brand owners huge benefits. Before we get into those benefits, we need to address the tokin’ elephant in the room. Marijuana use is, for the time being, a violation of federal law.

Marijuana is a schedule I illegal drug. The Controlled Substances Act (CSA) makes it unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia.

“any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling or otherwise introducing into the human body a controlled substance, possession of which is unlawful under the CSA.” 21 USC §863(d).

For this reason, the United States Patent & Trademark Office will refuse to register a marijuana based product. Soon, very soon, the CSA will be amended to follow along with state adoption of the legalization of cannabis use. This will permit any and all marijuana associated marks. For the time being, protection can still be attained before this change. So how can a brand owner get ahead of the flood when the Trademark Office won’t allow registrations related to an illegal substance? Protection is available - in roundabout ways.

Federal Registration ®

Marijuana business owners can still get trademark protection for their products, so long as they are not related to the production and dissemination of marijuana. A business owner can do this by registering a marijuana mark which covers ancillary services related to marijuana or marijuana products (such as those found in International Classes 35 and 41). Here are a couple successful examples which have already registered:

  • TOKR: an application that allows users to locate pricing for medical marijuana and recreational marijuana from nearby dispensaries owned by others and related marketing and software services (ancillary use: offering a marketing platform for medical and recreational dispensaries and companies).
  • Farm to Feeling: information services for medical use of cannabis (ancillary use: offering information to consumers concerning the medical use of cannabis).

The key takeaway is that an application for a marijuana related mark can be registered. The mark must have a carefully crafted identification of goods or services that excludes “marijuana” itself. Once registration is cleverly crafted, the registered mark can be used to defend against later parties entering the registry. Additionally, the registration can be used to enforce the mark against others, including competitors.

Benefits of a Registered Mark

While registering a trademark related to cannabis may take some finagling, it is still entirely possible. Especially when the benefits massively outweigh the complications. A registered trademark provides constructive notice nationwide. Upon registration, an owner has the only claim to the mark so long as it is in use.

By registering, an owner immediately gets the equivalent right as if that owner had told everyone across the country they are using the mark. In other words, registration is evidence the registrant has ownership of the mark. Once notice is provided, federal courts will provide treble damages and possibly attorney fees in the event of infringement.

Similarly, registration entitles an owner to certain statutory damages in the case of counterfeiting. Additionally, a registered mark can be the basis to stop others from importing the goods. Finally, it allows for use of the registration symbol ®.       

State Trademark Registration

State trademark registrations are a last line of defense. State registrations do not offer much protection, and certainly not the same level of national protection that federal registration does. Namely, state trademark registrations do not offer a presumption of ownership and validity of the underlying mark on the national side. This is a big disadvantage to state trademark registration. However, state registrations have many advantages, especially if you find yourself starting a marijuana business in a state which has legalized recreational uses of the plant.

States that currently have laws broadly legalizing marijuana in some form have issued marks for cannabis flowers and related products, pre-rolled marijuana cigarettes, pharmaceuticals in nature of marijuana and many other marijuana products including edibles and plants. Although there are many disadvantages to state registration of your brand, state registrations are still relatively cheap and easy to attain. If you cannot get federal registration then at least a registrant can obtain certain benefits under state law, because the registration has been made a matter of public record.

State registration is still not easy within the states that have legalized marijuana. In fact, almost every state which has allowed registrations related to marijuana still has a set of specific guidelines for marketing and branding of marijuana products and services.      

Marijuana in Iowa

The advent of cannabis in Iowa will come in the form of medical marijuana. More specifically, cannabis will start appearing on shelves as a weapon against opioid abuse. See the links below for more of the latest updates.

Five Iowa Medical Marijuana Stores Gain State Approval:

https://www.desmoinesregister.com/story/news/health/2018/03/27/five-medical-marijuana-dispensaries-offered-iowa-permits/461729002/

Medical Marijuana Expansion:

https://www.desmoinesregister.com/story/news/politics/2018/04/30/medical-marijuana-expansion-likely-dead-2018-iowa-legislature/546406002/

In summary, trademark registration, especially in association with an illegal substance, can be very complex. You should consult your BrownWinick intellectual property attorney to maximize your protection and add value to your assets.

Special thanks and photo credit to Andy Sack.
Special thanks to Lucy Korsakov, BrownWinick Law Clerk for her research assistance on this project.