Trademarks are the cornerstone of your company’s brand as they are often the first element consumers see, recognize, and remember. In the cannabis industry, where competition is fierce and federal protections remain limited, your trademark becomes even more critical. Despite being an intangible asset, a strong trademark can account for nearly a third of your company’s value — if not more — depending on its strength, longevity, and the goodwill it builds over time.
This is why developing, protecting, enforcing, and maintaining your trademark is an upfront investment that will inevitably pay dividends as your business grows.
What does trademark protection do?
Federal trademark protection is both a shield and a sword. A federally registered trademark protects a business against unauthorized use of their trademark and it allows them to enforce their rights against the infringing trademark.
A federal registration not only secures nationwide priority and exclusive rights to use the mark in connection with your goods and services, but it also provides powerful enforcement tools, such as deterring copycats, strengthening your position in disputes, and opening the door to statutory damages and enhanced remedies. It allows a business to expand confidently across state lines, appear in the USPTO database to block confusingly similar filings, and use the ® symbol to signal legitimacy to consumers, investors, and potential partners. For any business serious about long-term brand value, federal protection remains the foundation of a durable and scalable IP strategy.
The role of federal law in trademark protections for cannabis
Even though cannabis is now legal in 38 states, the United States Patent and Trademark Office (USPTO), as a federal agency, still will not register trademarks for cannabis plant-touching goods or products. This is because federal registration requires “use in commerce,” which in practice means lawful interstate commerce. Since cannabis remains a federally illegal Schedule I substance, it cannot be transported or sold across state lines, and therefore can never satisfy the USPTO’s “use in commerce” requirement.
However, all hope is not lost. The USPTO will accept trademark applications for a wide range of non-plant-touching goods and services, including cannabis education, events, websites, consulting services, smoker articles, apparel, and virtually any ancillary product or service that does not involve the federally illegal sale of cannabis itself.
Alternative cannabis trademark protections to pursue
Choose your brand name wisely
First, choose your brand name wisely. To qualify for federal trademark protection, your mark must be distinctive. This means it can’t look or sound like any other filed or registered trademark used for similar goods or services. That’s why it’s best to avoid industry-generic terms tied to the cannabis plant or cannabis culture. While it may feel counterintuitive, a trademark isn’t meant to describe what your business does; it’s meant to identify who your business is.
The more distinctive (i.e., unique) your trademark, the greater your chances of clearing USPTO examination and the easier it becomes to police and enforce your rights. Conversely, the more common or descriptive your trademark, the lower the likelihood of registration and the higher the risk that someone else is already using it. A cannabis trademark attorney can advise you on whether your desired name is more descriptive or more distinctive.
Secure state registration
The cannabis industry is one of the few sectors where state-level trademark protection is absolutely essential. Why? Because if your business operates in a state that has legalized cannabis, you can secure a cannabis-specific state trademark, which offers protection that simply isn’t available at the federal level as noted above.
State registrations allow you to protect your mark for the actual cannabis goods and services you offer, giving you enforceable rights within your state even though those same goods and services remain ineligible for federal registration. It is recommended that a cannabis business obtain state-level trademark protection in every state where it operates.
While a state-registered trademark may not be enforceable nationally, the efforts you employ to protect your brand on a state level could resolve intra-state competition disputes, and eventually serve as precedent for national protection.
Enforce a well-written, cannabis-specific license agreement
Eventually, the time may come when a cannabis business wants to “license” its trademark to another company. To license a trademark simply means to rent it out in exchange for a fee, which can take the form of flat fees, royalty payments, or percentages of sales, profits, or revenue. The more protection a company has around its trademark, the higher the value of that trademark — and the higher the fees it can command for its use. This is because a trademark garners value through exclusive and consistent use. Without federal or state protection, a company risks licensing a trademark without any real guarantee of ownership.
Given the high cost of applying for a state cannabis license to grow, manufacture, dispense, etc., licensing agreements can also be a cost-effective way to introduce a company’s brand into another market and expand its national footprint. These agreements come in all shapes and sizes, but the one thing a company should never do is allow another party to use its trademark without written permission. Written permission allows the company to control how the mark is used, rescind permission if necessary, and maintain exclusive ownership.
In a rapidly evolving industry, trademark protection isn’t optional but a critical business strategy. The companies that prioritize their IP now will be the ones best positioned to scale, stand out, and stay protected.
Work with experienced cannabis trademark attorneys for the best chances of success
At Rudick Law Group, our attorneys are at the forefront of cannabis trademark and IP protection. As experienced lawyers in the industry, we have successfully registered trademarks for our clients on the federal and state levels. Our Associate Attorney, Jessica F. Gonzalez, is a nationally-recognized cannabis trademark expert who empowers clients to protect their innovations and thrive in this dynamic market. Request a consultation with Jessica to start the process to protect your cannabis company’s hard work.
A version of this article originally appeared in Marijuana Venture magazine.
.webp)
