Earlier today, President Trump signed an executive order to “reschedule” Cannabis pursuant to the Controlled Substances Act and move it from Schedule I to Schedule III. This doesn’t “legalize” cannabis products from a federal perspective, but it opens many opportunities for further research, development of products, and has implications for taxation and other business matters.
But what about trademarks? Cannabis has long been in a strange limbo, as it has been legalized in many states but remains illegal federally. This leads the United States Patent and Trademark Office (USPTO) to reject federal trademark applications for products containing cannabis on the basis that there is no way for the trademark applicant to use the mark in lawful interstate commerce. The USPTO has been a veritable brick wall for cannabis related trademark applications, and the cannabis industry has had to leverage a patchwork solution of state trademarks and federal applications for “closely related” products such as clothing, rolling papers, ashtrays, and the like.
While the “hemp loophole” allowed some trademarks to be registered if they contained a certain (low) threshold of cannabidiol derived solely from hemp, true cannabis remained prohibited. Congress has also worked to close that loophole ever since it was opened, and the future of legal hemp products is now threatened.
So, where does that leave us now, with cannabis on its way to fewer regulations? The short answer is we do not know for certain yet, as the DEA is responsible for actually rescheduling cannabis, and they have a history of working as slowly as humanly possible when the previous administration requested that it investigate rescheduling cannabis. Nonetheless, the president’s executive order is a clearer directive than any past discussion of rescheduling cannabis.
Once rescheduling has occurred, the USPTO will have to determine how it will address cannabis marks. One thing is for sure: while commercial use of schedule III substances is closely controlled, there is definitively legal use of those substances, and historically, marks have been granted for them without necessarily proving that the mark’s owner is properly registered with the DEA.
The Intellectual Property and Cannabis teams at Greenspoon Marder are closely monitoring legal, legislative, and regulatory developments that could have a profound impact on your intellectual property and business. Our teams have years of collective experience counseling clients and providing guidance regarding these important matters, and we are ready to provide that guidance to you.
