Dorsey Chairs Panel on Cannabis Marketing and Branding Issues

While a number of Dorsey lawyers have just returned from MJBizCon, Dorsey also recently led a panel on U.S. and Canadian cannabis branding and marketing issues at the Annual Marketing Law conference of the Association of National Advertisers/Brand Activation Association (ANA/BAA) in Chicago.

The panel shared the collective wisdom of a U.S. Intellectual Property attorney, a Canadian IP attorney, a California-based advertising agency, a national cannabis processor, and a dispensary that is developing marketing and product development strategies while working within complex regulatory framework governing the marketing and sale of adult use, and medicinal cannabis on both sides of the border.  Currently, cannabis use and possession remains prohibited at the federal level under the U.S. federal Controlled Substances Act, while, at the time of the panel, medicinal cannabis is legal in 33 U.S. states plus the District of Columbia, adult recreational use is legal in 10 U.S. states, and adult recreational use became legal throughout Canada on October 17.

On the Canadian legal side, Chandimal Nicholas of Cassels Brock outlined the two types of cannabis advertising — informational and brand preference — that are currently lawful in Canada. These types of advertising allow for the promotion of cannabis by means of factual information or by its brand characteristics, so long as this promotion is displayed in a manner that would not be not accessible by or available to young people, such as age-gated websites or places that are age restricted.  Nicholas also walked through the many Canadian cannabis advertising “don’ts”, which result in the use of minimal or plain packaging.  For example, cannabis advertising cannot appeal to young people, evoke emotion, or include any testimonial or endorsements. Event sponsorship is also not permitted.  No mascots, characters or celebrity spokespersons can be used either.

Example of Canadian cannabis packaging.

Example of U.S. cannabis packaging.

On the U.S. side, since the U.S. Patent and Trademark Office currently prohibits trademark filings for cannabis, which remains a prohibited substance at the federal level, the panel discussed strategies for cannabis brand protection in those states where cannabis is lawful, including the relative benefits of U.S. state filings, securing U.S. federal protection for adjunct products and services with non-cannabis applications, and trademark filing protection outside of the U.S.  The panel also discussed how the unrestricted right to make federal trademark filings in Canada contrasts with Canada’s much more restrictive advertising environment as compared to the U.S.

Felix Green, Director of Product Development at Green Thumb Industries (GTI), which sells a suite of cannabis products and also operates the RISE chain of retail cannabis stores, discussed the importance of developing brand stories that will appeal to both experienced and new cannabis users, and the importance of social media in reaching this broader audience.

Daniel Stein of the Oakland-based advertising agency Evolution Bureau (EVB), discussed the different ways in which U.S. cannabis brands are being built, along with the new consumer groups that are being targeted, such as older women seeking health benefits.  Given the current state-by-state regulatory framework, EVB also shared that cannabis brands are largely being developed at the local level, which can sometimes lead to products and brands created in one state not having the same marketing or consumer impact in other states, particularly where they have local meaning or recognition.  Conflicts between brand names can also occur as brands get built up and gradually expand, without the safeguards of federal trademark protection.   Finally, EVB discussed how the carefully developed aesthetics of product packaging in the U.S., can often be marred by ever-changing state labeling requirements, which often require products to be stickered with ingredient and other manufacturing information.

The panel also canvassed some best practices for mainstream media outlets, such as newspapers and radio stations, which are increasingly being approached by cannabis producers to provide ad space for cannabis products.  To capture this advertising revenue, these media outlets must navigate U.S. federal prohibitions on advertising that are at odds with the laws of several states.  Finally, the panel discussed recent proposed changes to California state regulations that appear to be designed to limit the white labeling of cannabis products by non-licensed businesses but may unwittingly restrict all licensing of intellectual property, by non-licensed businesses in the cannabis space including legitimate branding and celebrity licensing transactions.