Massachusetts Cannabis Branding
Massachusetts voters chose to legalize recreational cannabis in the state during the November 2016 elections. Recreational sales were later authorized to begin in July 2018. Businesses entering the cannabis markets in Massachusetts face unique legal branding and advertising-related challenges.
The federal government provides many of the strengthened intellectual property protections businesses seek. The United States Patent and Trademark Office (USPTO) federally registers trademarks while The United States Copyright Office similarly registers copyrights. The first obstacle to note in regards to the cannabis business is that cannabis is illegal at the federal level. This impediment is especially relevant to trademarks and alters the manner in which a business may protect its brand.
Trademarks pose the most distinctive issue a cannabis-based business will face in regards to branding. Typically, a Massachusetts-based business seeking trademark protection could hire an attorney. That attorney would conduct a search, clearance, and registration of marks the business sought to protect. A standard search and clearance would include federal, state, and common-law searches.
The USPTO will not register a trademark related to the core of cannabis businesses. A comprehensive search and clearance should be conducted despite lack of federal registration. A state or common-law mark must not infringe other trademarks, even if it lacks federal registration. A cannabis retail business branding itself “McCannabis” would quickly receive a cease and desist letter from an attorney for McDonald’s.
State Trademark Registration
While the search and clearance process is necessary for cannabis businesses, the registration process involves creativity. A business in Massachusetts or elsewhere may have built-in common-law trademark protections. It is important to strengthen those protections, and without the availability of federal registration, state registration is the preferred substitute.
I was advised of protocols that must be followed to receive state trademark registration as a cannabis company by the Massachusetts Secretary of State’s Office. The company, whether involved in retail, production or both, must have the relevant permits and licenses on file in Massachusetts. Secondly, the company’s corporate documents should be revised to reflect that the company is engaged in the production or sale of cannabis products. At that point, the business should submit its trademark application to the Secretary of State’s office.
There are multiple benefits of registering a trademark in Massachusetts. Potential competitors will be on notice of the state registration, and will have weakened defenses in an infringement lawsuit. The owner of an infringed trademark may sue for profits and damages plus treble damages, and attorneys’ fees if the infringement is knowing or in bad faith. The business should seek similar state registrations if expanding to other states that have legalized cannabis sales.
USPTO Creativity & Logos
Another trademark avenue to consider is the USPTO. Yes, I stated that cannabis businesses will be denied registration as to the core (cannabis) of that business. Non-cannabis related registrations can be sought. The name of a business or product registered in relation to cannabis itself would be rejected by the USPTO. The name and logo of a business registered for the sale of apparel and novelty items could be approved.
Before doing so, it is important to carefully read MA 935 CMR 500, which details cannabis laws in Massachusetts. A significant portion of the document details cannabis advertising within the State. 500.105(4)(a)(1) provides that a marijuana establishment may develop a logo, but may not include medical symbols, images of marijuana, or colloquial references to marijuana and marijuana paraphernalia. 500.105(4)(b)(17) provides that “advertising, marketing or branding of marijuana products on clothing, cups…novelty items” is prohibited.
Definition of “Cannabis Products”
The Cannabis Control Commission pointed me to its definition of “cannabis products” under 500.002. “Cannabis or Marijuana Products means cannabis or marijuana and its products unless otherwise indicated.” A t-shirt sold by a cannabis company bearing marijuana is prohibited in the state as a marijuana product. A hat depicting a device to inhale marijuana would be treated in the same manner. A business name is not a marijuana product when applying the definition of 500.002.
Thus, cannabis businesses may sell shirts, hats, novelty items, etc. if they focus on the business logo, and not the cannabis product itself. Since the business logo may not legally include marijuana references, there is no confusion as to what items are able to be produced and sold. 935 CMR 500 allows for cannabis companies in Massachusetts to apply for federal trademarks for apparel and novelty items if they do not run afoul of the state laws.
Copyright registration is an affordable and effective way to protect a business or brand logo. Copyrights afford protection for a graphic work upon the “fixation” or creation of the work in a tangible form. While copyright protection attaches at that moment, registration of the logo with the United States Copyright Office affords increased protections.
As with trademark registrations, a copyright registration creates a public record and places potential infringers on notice of the work and registration. Registration also enables the copyright holder to file against infringers in federal court. Attorneys’ fees and statutory damages are available if that registration is made within three months of the publication of the work, or at any point prior to the alleged infringement of the work. Registration made before the end of five years following the date of publication is prima facie evidence that the copyright is valid.
Most importantly, unlike the USPTO, the Copyright Office is unmoved if the logo is being used in relation to a cannabis company. The Copyright Office is in the business of registering creative works, not regulating what those works are used for. Copyright registration will not stop a competing company from using a brand name, but it will prevent them from using the same logo or brand presentation.
Advertising Cannabis in Massachusetts
A significant portion of 935 CMR 500 regulates the type of advertising, marketing, and branding cannabis companies may engage in within Massachusetts. I detailed a portion above that relates to how a business could pursue federal trademark registrations with the USPTO in regards to a brand name or logo. These advertising restrictions are the letter of the law in Massachusetts and should be followed as such. Logos were covered above. The other regulations may be categorized as either age and health-based or label, signage, and display-based.
As with all advertising, the first rule is to avoid deceptive, false, or misleading advertising even if that determination is made through ambiguity. This rule also applies to negative advertising towards competing companies in the cannabis industry. It is critical to note that promotional giveaways will be scrutinized by the Commission. Giveaways involving free or donated marijuana should be wholly avoided.
Age & Health-Based Restrictions
Many of the permitted and prohibited regulations focus on the age of the intended audience. 85% of the audience should be reasonably expected to be 21 years or older. Advertising must not promote the products to those 21 or younger. The advertisements also may not portray anyone younger than 21 nor be intended to appeal to those under that age. Restricted advertisements include the use of certain celebrities, cartoons, mascots, etc. deemed to appeal to that age group. Websites must verify that the user is 21 years or older, and there cannot be unsolicited pop-up ads on the internet.
Advertising must not jeopardize the welfare or safety of the public and must feature certain specific warnings to the public on the face of the ads. The ads must also specify that the Food and Drug Administration (FDA) has not analyzed or approved the product and that the product may be illegal outside of Massachusetts.
Products should not be advertised as being therapeutic or having health benefits unless supported by clinical data or scientific evidence as determined by the Cannabis Control Commission.
Labels, Signage & Display
Marijuana establishments may display products in secure cases, post prices in the store or website, and respond to price inquiries via telephone. Products are prohibited from display to the public by exterior windows. Illuminated signage, such as neon, is only allowed at night until the store closes. The use of radio or loudspeakers, even if used via a vehicle, is also prohibited. Advertising and signage are also prohibited on vehicles and from public transportation venues.
Two of five listed warnings or disclosures must be included on marijuana packaging. The labeling must adhere to strict standards that include registration numbers, dates of packaging, serial numbers, cannabinoid profile of the product, and symbols indicating that the packaging includes a marijuana product. Edibles, concentrates, and extracts have further labeling protocols that must be followed as well. The particular points of labeling for these products are impossible to summarize. Cannabis companies should follow each labeling requirement to the exact letter of the law as written. There is no gray area for the protocol of labeling cannabis products.
Cannabis businesses in Massachusetts face complex branding and advertising issues. Those businesses should retain an attorney well-versed in intellectual property and advertising law to maximize opportunities and avoid pitfalls.