The federal government’s dark cloud over the cannabis industry extends far beyond stringent regulation and compliance laws. Their long arm reaches into every facet from marketing, advertising, branding and trademarking, to packaging and labeling. When you are in business, any business, your main goal is to create a recognizable brand, to find some way to appeal to your target market while also trying to distinguish yourself from the others. In any other business you may hire a graphic designer to help you create a recognizable logo, trademark your brand, and then run out and find an advertising firm to help you get your name out there.
If you’re in the cannabis industry trying to build your brand the Feds are going to make it very difficult for you.
Packaging and label restrictions can make it very difficult to get on the shelves and into the market. The laws also vary greatly from state to state and transporting cannabis products across state lines is illegal so it is nearly impossible to create a national brand. Because of this, the focus is on creating a brand in your local market, but it’s the ever changing laws as the industry grows that make it difficult to stay there. Take, for example, Colorado’s well known brand Dixie Elixirs & Edibles who had to pull one of their best sellers off the shelf and lost 90 days of selling because a change in packaging laws meant that their screw top bottles were no longer compliant. The new regulations require products to come in a child resistant, resealable package equipped with a way to dole out a precise measurement. It’s not necessarily the new law that’s the problem but the rapidness with which they are changed and implemented, often not leaving time for a business to sell out of the current product while starting production on the new package.
Imagine trying to create an advertisement for your business when the ad is not allowed to be “visible to members of the public from any street, sidewalk, park or other public place”. These are the hurdles for Colorado licensees. Last year the first commercial ever for a cannabis product was pulled right before it was scheduled to air on television by the Denver based ABC affiliate. Earlier this month prominent Portland ad agency, Sockeye, went out on a limb and created the first commercial to market a cannabis edible for Mirth Provisions. The advertisement is for their cannabis infused beverage, “Legal”, and while it has been viewed thousands of times on YouTube but has yet to be aired on regular television. Broadcaster’s, while not being bound by any provision from the FCC that prohibits them from showing a commercial that involves a cannabis product, may still decide to block it from being televised in fear of not having their license renewed if it were deemed that they did not somehow serve the “public interest” by showing the advertisement.
Here, the Oregon Liquor Control Commission oversees the advertising guidelines that basically copy those of Colorado. The restrictions may be somewhat similar to that of alcohol and tobacco except for section, OAR 845-025-8060 also states that a “licensee may not utilize television, radio (even radio that is streamed through the internet), billboards, print media or internet advertising unless the licensee has reliable evidence that no more than 30 percent of the audience … is reasonably expected to be under the age of 21.” How you are supposed to “reasonably” gauge this 30% has been left unexplained so obviously this is a very broad description. I’m sure at some point someone will come up against this rule and cause a little stir.
Many advertising companies are either afraid of, or very cautious about working with businesses in the marijuana industry. They may be worried they will lose other business by associating themselves with an industry that is still controversial to many, or, like the broadcasters mentioned above, fear of being bullied and losing their own business license due to their involvement.
As a business owner you may spend thousands of dollars creating just the right look and message and then you spend hours searching the U.S. Patent and Trademark Office database making sure that your logo doesn’t even remotely resemble someone else’s, or it might be deemed to be “confusingly similar” and you’ll find yourself slapped with “trademark infringement” accusations. Once you finally decide on and create your logo or brand though, you won’t be afforded the same protections everyone else enjoys. You are in a Federally illegal industry after all.
Recently the United States Patent and Trademark Office (USPTO) review attorney denied a cannabis business the right to register their name as a federal trademark. “Herbal Access” was denied this application because the attorney found that the pictures in the trademark, a green cross and a marijuana leaf, were indeed common identifications for the industry and they “may be” selling marijuana which is explicitly illegal under federal law.
Trademarks are registered under and protected by the Lanham (Trademark) Act (Trademark Act of 1946) which Wikepedia states “is the federal statute that governs trademarks, service marks, and unfair competition.” It was enacted July 5, 1946, and went into effect 1 year later on July 6, 1947, it is the primary federal trademark statute of law in the United States. The Act prohibits a number of activities, including trademark infringement, trademark dilution, and false advertising. And bars any trademark registration of immoral, deceptive or scandalous matter.
But what exactly is considered “immoral or scandalous”? Isn’t that pretty subjective? Obviously it depends on who you ask and proponents of the cannabis industry would definitely say that there is nothing immoral about it. You will often hear that this is the reason for not being able to get a trademark for the cannabis industry registered, but it actually isn’t this section that gets them denied. In reality they are being denied due to the illegality of cannabis in general. They are able to deny it based on the fact that there is an unlawfulness of the commerce cited in the application.
In order to try to stand out, in the cannabis industry, you will have to find some alternative and creative ways of doing so. But again, this is nothing new to the entrepreneurs who choose to claim this industry as theirs.
Maybe you would like to set yourself apart and create a brand based on the quality of your product- maybe even tout it as being organic. Well, good luck, because it is illegal. It is illegal to label your organically grown marijuana plant as organic. An organic certification must be issued by the U.S. Department of Agriculture in order to label a product as organic. The USDA has not approved any certification for marijuana so even though there are alternative certifications that do exist they are not officially organic. However, using regional cannabis appellations as a way to differentiate your product may provide a sort of work around for many cultivators that have attempted to obtain trademark protection. That is exactly what the members of the Mendocino Appellations Project is aiming to do. Marijuana crops have brought quite a bit of recognition to the farmers of the Emerald Triangle region for decades, now they are expressing interest in establishing regional appellations, much in the way the AVA’s do for the wine country. They believe that this will help to protect the unique terroir and culture of their cannabis. In this way they would be able to claim that their crop has a unique aroma and flavor based on the characteristics of the region and land where it was grown. Their hope is to create an AVA so to speak, or certification where they could label their products as “Mendocino Made”.
There are more than a few states with medical marijuana measures on the ballot and several more states looking to legalize cannabis this November. Cannabis use will become more mainstream and the stigma that has been attached to it will continue to diminish. There may be a time in the not so far off future where marijuana use in some form is looked at the same way as drinking at a friend’s BBQ or a girls night out and maybe the advertising companies won’t be so leery of being involved, hopefully laws will amend and the cannabis industry will finally be seen as a thriving and legitimate industry. Until that day, keep the imagination flowing!
While you do that Guardian Data Systems will continue to pave the path of legitimacy through transparency and technology that will allow for the repeal of cannabis prohibition.