The Challenges of Protecting Intellectual Property in the Cannabis Industry

Cannabis is becoming more mainstream as multiple states have legalized its use in some way. But the legal landscape has yet to catch up, and this is especially true for intellectual property. Kevin Murphy, chairman and CEO of cannabis operator Acreage Holdings, writes in Forbes about the challenges of protecting cannabis intellectual property. With more players entering the market, his advice to entrepreneurs is to be cautious and patient. It is also a good idea to contact a trustworthy intellectual property lawyer for assistance.

Patents, trademarks, and trade secrets are essential elements for any industry, and it’s no less true with cannabis. As more businesses start up, these will become necessary tools to strengthen brands and expand markets. But the key difference between traditional products and services and the cannabis industry is obviously legal status. While states have done their own thing, largely free from federal interference, cannabis products run afoul of federal law. Along with LSD and heroin, cannabis is still classified as a Schedule I drug under the Controlled Substances Act

The illegality of cannabis at the federal level will make trademarks difficult to attain. Trademarks can be granted to goods that are lawfully “sold or transported in commerce.” As Murphy explains, this excludes cannabis since federal law prohibits the manufacturing, sale, and distribution of cannabis products. States can issue trademarks, but these are not as efficient as a nationwide trademark.

Conversely, the thirty-three states that have legalized some form of cannabis or marijuana all have unique regulatory approaches. Companies marketing in these states will need to learn the ropes of each one. This presents the cannabis industry with a significant challenge to creating a robust intellectual property scheme. It needs to be strong enough for enforcement, yet flexible enough to be applied in different states.

Murphy recommends that cannabis entrepreneurs be patient and take their time working within the patchwork of state laws and regulations. That’s an approach we understand at Eddington & Worley. Part of effective client representation is thorough research and application of relevant laws. We also take the time to learn the product or method that needs to be protected, and to devise solutions.

Due diligence, Murphy says, is another critical approach that any intellectual property lawyer should take. And it is especially necessary for the cannabis industry. Companies need to make sure that any products they put on the market do not violate existing intellectual property protections. This can slow development, but is absolutely critical before time and money are invested in product lines. With so many different state laws and regulations, it will likely be even more time-consuming. Our firm recognizes the importance of due diligence and incorporates it into our approach to intellectual property.

Finally, entrepreneurs will need to get creative. Murphy uses the example of a Colorado-based cannabis company licensing its products to California manufacturers. Licensing fees can be used to protect intellectual property while facilitating expansion into new markets. The Colorado company can rely upon California manufacturers who already know and understand the state and local rules. This exchange of expertise and intellectual property is mutually beneficial. At Eddington & Worley, we develop client-specific solutions that use intellectual property in unique ways.

Intellectual Property Attorneys You Can Rely on

As the laws change across the country, new cannabis businesses will continue to pop up. The enduring federal resistance to cannabis products will make it more difficult to protect intellectual property. But this does not mean it is impossible. If you own a cannabis company, you need creative and knowledgeable solutions to intellectual property problems. You can rely on the experienced attorneys of Eddington & Worley to meet these challenges. Give us a call today.

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