Trademark law protects businesses’ brand identities and helps prevent consumer confusion. The U.S. trademark system operates at both federal and state levels. Federal registration through the United States Patent and Trademark Office (USPTO) gives nationwide protection and the right to use the coveted ® symbol, along with crucial benefits such as constructive notice of ownership throughout the country and presumptive validity of the mark. Federal registration also enables trademark holders to enforce their rights in federal courts and can serve as a basis for securing trademark protection in foreign countries.
State trademark systems provide vital protection for businesses operating primarily within a single state or in industries where federal registration may be unavailable due to federal restrictions. For cannabis businesses in particular, state protection has become essential given the industry’s current legal status.
For federal trademark registration, your mark must be used in lawful interstate commerce and function as a source identifier rather than merely describing the product, as well as be distinctive. Distinctiveness can be inherent, like the invented word KODAK, or acquired through market use, like AMERICAN AIRLINES. These requirements ensure trademarks serve their core purpose: clearly indicating the source of goods and services while allowing businesses to build and maintain valuable brand identities.
Cannabis Trademark Challenges
Marijuana’s federal status as a Schedule I controlled substance under the Controlled Substances Act creates significant barriers for trademark protection. The USPTO consistently holds that use of a mark in commerce must be lawful under federal law to qualify for federal registration. This means marijuana businesses operating under a state-legal marijuana regime still cannot access federal trademark protection for their core products and services.
The 2018 Farm Bill created one notable exception by legalizing hemp (cannabis with 0.3% or less delta-9 THC). This opened a narrow pathway for federal trademark protection of hemp-derived goods and services. However, the USPTO maintains strict oversight: Marks for products exceeding the THC threshold — as well as consumable products containing hemp — remain ineligible for federal registration because they cannot be lawfully sold in interstate commerce.
State trademark systems have become a significant protection route for cannabis businesses. States with legal cannabis typically allow registration of cannabis-related marks. However, state registration comes with significant limitations. Most importantly, these rights only exist within state borders. For businesses operating across multiple states, this creates a complex patchwork of protection that can be challenging to manage and enforce. State rights may also offer less robust enforcement mechanisms compared to federal registration.
Protection Strategies
Cannabis businesses can implement several effective approaches to protect their intellectual property rights. Many cannabis operators successfully register federal trademarks for ancillary goods and services that don’t directly involve federally prohibited substances. For example, a dispensary might register its mark for branded merchandise like clothing and accessories, or for smoking devices that don’t contain cannabis. Educational services about cannabis cultivation or industry best practices can also qualify, provided they don’t promote federally illegal substances.
When developing trademark strategies, cannabis businesses should consider implementing a combination of these approaches to create the most comprehensive protection possible under current law. This might involve securing federal registration for ancillary goods and services, while simultaneously pursuing state registrations in key markets and maintaining documentation of common law rights.
Retail store services present another avenue for protection, though businesses must carefully describe these services to exclude federally prohibited goods. The USPTO examines specimens, applicants’ websites, and other evidence of use carefully to ensure applicants aren’t attempting to register marks for federally prohibited cannabis products under the guise of lawful goods or services.
Common law rights offer yet another important layer of protection. These rights arise automatically from use of a mark in commerce, even without registration. Under common law principles, the first entity to use a mark in a particular geographic area generally acquires priority rights within that region. While valuable, enforcing common law rights typically requires proving actual use in commerce and establishing consumer recognition of the mark — a more challenging process than enforcing registered marks.
State registration creates a public record of an owner’s rights and provides several meaningful benefits. It can deter potential infringers, simplify enforcement actions within the state, and serve as valuable documentation of trademark rights in anticipation of eventual federal legalization. State registrations often provide procedural advantages in state court proceedings, such as presumptive evidence of ownership and validity of the mark.
Current Developments
The Department of Justice has proposed rescheduling cannabis from Schedule I to Schedule III of the Controlled Substances Act. The DEA’s public hearing on this has been pushed to early 2025. While this delay has prompted some industry observers to question the inevitability of rescheduling, we maintain that rescheduling remains likely because it has broad bipartisan support and there is significant administrative momentum already in motion. The rescheduling process requires coordinated review by both the Department of Health and Human Services and the DEA, with each agency evaluating different aspects of the proposed change. Robert F. Kennedy Jr., the current nominee for HHS secretary, supports cannabis legalization and has proposed using cannabis tax revenue for drug treatment programs.
Rescheduling to Schedule III could fundamentally alter trademark registration rules. While cannabis would still be federally regulated, businesses might finally be able to register federal trademarks by meeting the “lawful use in commerce” requirement. However, the exact scope of available protection would likely depend on specific implementing regulations and USPTO guidance.
Looking Ahead
Federal legalization would transform cannabis trademark protection, though implementation would likely unfold gradually through a complex regulatory process. New regulatory compliance requirements would likely emerge as conditions for registration, potentially including specific product testing standards, labeling requirements, and marketing restrictions that could impact trademark strategies.
Cannabis businesses require sophisticated brand protection strategies that work now and preserve future opportunities. This starts with creating strong, distinctive brands that can withstand scrutiny under traditional trademark principles while navigating industry-specific regulatory constraints. Businesses should maintain robust state trademark registrations and document common law usage meticulously. Businesses also should develop contingency plans for various legalization scenarios, including strategies for converting state rights to federal registrations and consolidating trademark portfolios across jurisdictions.
As federal legalization approaches, businesses might consider filing intent-to-use applications at strategic moments to secure priority dates for future registration. International opportunities may also emerge as more countries liberalize their cannabis laws. Protection under international trademark treaties such as the Madrid Protocol could become possible for U.S. cannabis businesses following federal legalization, though this will require careful analysis of varying national laws regarding cannabis.
Success in this rapidly evolving landscape requires cannabis businesses to be both proactive in protecting their current rights and strategically positioned for the significant changes that federal legalization will bring.