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A troubling tendency has surfaced in states where marijuana markets are regulated: businesses frequently offer their goods using identical or very similar trademarks. This overlap occurs because the United States Patent and Trademark Office (USPTO) prohibits federal trademark safeguarding for cannabis products, as they are illegal at the federal level.
In the absence of federal trademark safeguards, marijuana businesses are left with little choice if they want to prevent others from using identical brand names or logos in different states.
This situation has created a unique issue in the sector where customers question if a product is from Company A or Company B when packaging or branding looks nearly identical. As more states implement regulated markets, new brands arise, raising the possibility of consumer confusion and underscoring the importance of unique trademarks.
Typically, marijuana businesses select a name or logo for their product, assuming it’s unique and unused by others, often without conducting a thorough search. Regrettably, this presumption may result in expensive legal disputes. Many marijuana business owners have encountered challenges over the years after discovering that their “unique” terminology, such as Dank, Emerald, Elevated, Canna, or 420, were already commonly used or connected to cannabis culture.
Businesses in the cannabis industry must therefore negotiate a challenging environment where trademark conflicts are inevitable until laws at the federal level change and the USPTO approves trademarks for marijuana products.
Once this happens, the shift will be both advantageous and difficult. The market will become more competitive as a result of the opening of the floodgates for new trademark applications, even though businesses will now have recourse to federal courts for trademark safeguarding.
In the interim, cannabis businesses should look at alternative brand protection strategies. Federally, trademarks are accessible for goods and services that do not directly involve the cannabis plant, such as select hemp-based goods, websites, smoking accessories, retail services, and non-infused products.
Cannabis companies can pursue trademark safeguarding in states where cannabis is regulated for their in-state offerings, like retail services, edibles, or flowers. However, these protections are limited to the state of registration, unlike federal trademarks, which cover the entire U.S., creating issues for companies that operate across state lines.
To further safeguard their brand, companies should consider other forms of intellectual property protection, such as patents, copyrights, or trade secrets.
One common misconception is that if a company hasn’t faced a trademark lawsuit yet, it won’t face one in the future. However, as the industry grows, litigation around trademark issues is expected to rise, with larger companies often leveraging their resources to protect their trademarks. When enforcement happens, smaller businesses may face the difficult choice between rebranding or engaging in a legal fight.
Many companies want the trademark to represent their product, but a more effective trademark reflects the company’s unique character, values, and purpose. A unique trademark enhances a brand’s long-term standing and helps it stand out in the marketplace.
It is also easier to defend, which makes it more difficult for rivals to violate the brand and guarantees greater recognition and protection.
With the proposed reclassification of cannabis to Schedule III and the evolving legal status of cannabinoids, more entrepreneurs are likely to enter the market, leading to a wave of new brands. In this dynamic landscape, a robust trademark is not just a logo—it protects a company’s identity. Starting early on trademark safeguarding can mean the difference between a smooth path to growth and facing costly legal obstacles.
For established companies like Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF), protecting their brand identity is paramount since these entities have worked hard to get to where they currently are.
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