CANNABIS IS BIG BUSINESS IN CALIFORNIA AND OTHER STATES BUT AT THIS POINT TRADEMARK REGISTRATION IS PROBLEMATIC

Barneys opens an upscale head-shop in Beverly Hills

“The new high-end head-shop concept that opened inside Barneys New York’s Beverly Hills flagship … [is] a high-profile harbinger of where cannabis related retail – and most likely the luxury department store space – is headed in the era of legal marijuana.” Los Angeles Times article, April 7, 2019 Cannabis on the high end, P4, by Adam Tschorn (“Cannabis on the high end, P4”).

high end photo

Photograph from https://lacannabisnews.com/why-barneys-high-end-head-shop-may-be-the-future-of-cannabis-related-retail/.

The shop “is elegantly appointed and stocked with a range of upscale smoking accessories such as hand-crafted stash jars from Siemon & Salazar; imported French rolling papers by Devambez (a gift set, complete with matchbooks, a rolling tray and a vermeil joint-packing tamper, will set you back a cool $8,850); functional jewelry (necklaces from Good Art Hlywd that double as vape-pen lanyards and a lip-shaped Carole Shashona ring that converts into a stylish joint holder); hemp-derived CBD beauty and wellness products; and an assortment of vintage Hermès and Gucci ashtrays.” Cannabis on the high end, P4.

Organically luxurious purple, green and blue fluorite gemstone pipes by Jan Leslie sold out  within days of their debut at The High End, in the Beverly Hills outpost of Barneys New York. "Fluorite has a long healing tradition," Leslie says. "Many healers use it to help access intuition and cultivate wisdom."

Jan Leslie Pipe (https://www.forbes.com/sites/kyleroderick/2019/03/31/gem-trend-gemstone-pipes-by-jan-leslie-debut-in-the-high-end-at-barneys-beverly-hills/#4058cb5b5456).

French rolling papers by Devambez (https://devambez.com/).

There is also “an on-site representative from Beboe, the Los Angeles-based luxury-level cannabis brand and partner on the project.” The representative “will explain the company’s products to the canna-curious and help him or her place an order for home delivery.” Cannabis on the high end, P4.

The article further notes that “[n]on-medical cannabis use has been legal … [in California] since the November 2016 passage of Proposition 64 (it remains illegal under federal law), and a January forecast by New Frontier Data projects that total statewide cannabis sales – estimated at $2.5 billion in 2018 – will nearly double (to $4.9 billion) by 2025.” This will have a “retail and cultural ripple effect” similar to “[w]hen MedMen made … [cannabis dispensaries] a brightly lit, inviting sea of blond wood more like Starbucks than the dicey dope dens of old …” This “signifies that cannabis doesn’t have to hide under the rug anymore …” Cannabis on the high end, P4.

Trademark Registration In the United States

Status

In the United States use and trademark registration of cannabis products and services is complicated. Cannabis remains illegal at the federal level, and, consequently, a federal trademark registration is not available. Separately, 33 states allow cannabis for medicinal purposes with 10 states (Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington, and Washington DC) also allowing cannabis for recreational use (see https://medicalmarijuana.procon.org/view.resource.php?resourceID=000881). California now allows for state trademark registrations with caveats (noted below).

US Federal Registration

The USPTO does not grant federal trademark registrations for marks that violate federal law but does allow registration for ancillary lawful goods/services such as vaping pipes, clothing, and providing online information about cannabis.

USPTO Background: The federal government and, consequently the USPTO states: “if the record indicates that the mark itself or the goods or services violate federal law, an inquiry or refusal must be made.” TMEP §907 states in pertinent part that “evidence indicating that the identified goods or services involve the sale or transportation of a controlled substance or drug paraphernalia in violation of the Controlled Substances Act (“CSA”), 21 U.S.C. §§801-971, would be a basis for issuing an inquiry or refusal. CSA makes it unlawful to manufacture, distribute, or dispense a controlled substance; possess a Schedule I controlled substance; or sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia. … [R]egardless of state law, marijuana, marijuana extracts, and the psychoactive component THC remain Schedule I controlled substances under federal law and are subject to the CSA’s prohibitions. … These prohibitions apply with equal force to the distribution and dispensing of medical marijuana.”

This hard stance could be changing. Last September 2018, the DEA removed some CBD/THC products from Schedule I (see https://mjbizdaily.com/dea-moves-cbd-medicines-off-schedule-1-a-limited-expansion-of-cannabis-access/) (“drugs including CBD with THC content below 0.1% are now considered Schedule 5 drugs … The action came three months after the FDA approved its first nonsynthetic, cannabis-derived medicine, a CBD preparation for rare types of epilepsy. …”)).

And in December 2018, the President signed the Agriculture Improvement Act of 2018 (“Farm Bill”) that, among other things, removes hemp (containing less than 0.3% THC) from the purview of the CSA. It is unclear at this point whether trademark applications will be accepted for CBD preparations as the FDA is still maintaining control over cannabis products (“we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products … This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act.” See See https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628988.htm).

Registrations for Ancillary Lawful Goods/Services: There are registrations on the Federal Register involving the sale of cannabis that bypass the requirements such as advertising for the product or providing ancillary products such as:

Reg. No. 5298522 CANNABIS FOR SALE for “advertising and directory services, namely, promoting the services of others by providing a web page featuring links to the websites of others; Providing a searchable online advertising website and informational guide featuring the goods and services of other vendors via the internet in the field of marijuana”;

Reg. No. 5489681Trademark image for “shirts; shirts and short-sleeved shirts; graphic T-shirts; hooded sweat shirts; long-sleeved shirts; short-sleeve shirts; sports shirts; T-shirts”;

Reg. No. 5212898 Trademark image for “software, namely, downloadable software in the nature of a mobile application for use in community engagement, social networking, education and sharing of information in the field of plant cultivation, specifically cannabis and cannabis cultivation; software, namely, downloadable software for personal computers for use in community engagement, social networking, education and sharing of information in the field of plant cultivation, specifically cannabis and cannabis cultivation”;

Reg. No. 5720567 Trademark image for “e-books featuring the topic of cannabis recorded on computer media” and “Printed books in the field of cannabis.”

Reg. No. 5459745 STATE FLOWER for “[b]usiness consulting services in the fields of holistic medicine and cannabis; providing a website featuring consumer information in the field of holistic medicine and medicinal cannabis.”

State Trademark Registrations

As of January 2018, the State of California is accepting trademark applications for cannabis goods and services with certain caveats (i) classification of goods and services are those adopted by the USPTO (as noted above, the USPTO does not accept applications for cannabis products but does accept applications for ancillary products); (ii) applicant is required to state whether it previously sought to register the mark with the USPTO and, if registration was refused, to disclose the reasons why it was refused at the federal level.”

Conclusion

The Cannabis industry is growing, particularly in those states where it is legal for medicinal and recreational purposes (e.g., $2.5 billion in 2018 in California alone) and as shown by an uptick in the luxury retail space (e.g., Barney’s recent opening of a high-end head-shop in Beverly Hills).

However, as long as Cannabis is not legal at the federal level, registration of trademarks on both the federal and state level will be problematic for the product itself but, as shown above, ancillary goods and services can be protected. For example, under the current circumstances, Barney’s could possibly obtain a registration for THE HIGH END covering retail store services including the offering of upscale smoking accessories, French rolling papers and jewelry. Registration would not be available for cannabis products. These circumstances could be changing with the recent decision by the DEA and the passing of the Farm Bill but it is unclear, at this point, how it will play out. To be continued!

Blog by: Mary B. Aversano
Logo legalAversano IP Law | aversanoiplaw.com
E: Trademarks@aversanoiplaw.com | T: (310) 904-9380

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