What will be the biggest challenge clients face? What have advisors done in different jurisdictions to protect clients?

One of the biggest challenges is that while marijuana is illegal at the Federal level, many states (and more every year) are decriminalizing it and even making it legal to sell marijuana to consumers at retail. So, while there is currently no ability to obtain a Federal registration, there is nonetheless trademark use and it is frustrating not to have an
nationwide route for protection of those brands. As noted, one of the things you do is try to register collateral items to build the presence of the brand as best you can. But another route is to pursue registration at the state level. Different states take different approaches to whether or not you can register. In some states it’s only for medicinal use, while in more and more states it’s being used for recreational purposes.

But even there, state registration is only going to give you limited (local) protection. From that perspective it’s sort of a
wait-and-see approach. Do what you can to build the brand and as things develop try to capitalise on that when the opportunity presents itself. But with marketing and advertising, those are unknowns really.

Certainly, there are regulations in the United States with respect to advertising tobacco products. And I have to expect that they’re going to have similar things put in place for marijuana products when they become legalised nationwide. Neither the FDA nor the FTC (Federal Trade Commission) are going to start promulgating regulations/advertising guidance for products that are illegal. But at some point, that’s going to happen and client’s need to be aware and prepared.

I know from travelling state to state and going to states where marijuana is legal, that you see signs, you see advertising on a local level that I expect would not really square with what the federal level is going to eventually require. In other words, these mom-and-pop shops that are legal in Washington state, for example, are doing things to keep their local constituency apprised of the availability of the product in ways that may be too “colourful” for young kids in terms of attracting their attention.

Contributing Advisors