In order to obtain federal registration of a trademark, one critical requirement is that the trademark applicant must make a lawful use of the mark in commerce. This requirement can make obtaining a federal registration tricky for cannabis-based companies because of the status of cannabis under federal law.
The Controlled Substances Act (CSA) prohibits the manufacturing, distributing, dispensing or possessing of certain controlled substances, including marijuana. The impact of the CSA is that cannabis-based companies that sell goods or offer services that are lawful under state law but violate federal law (under the CSA) cannot meet the lawful use in commerce requirement for those goods or services for the purposes of obtaining federal registration for their trademark.
Interestingly, the Agriculture Improvement Act of 2018 (aka the “Farm Bill”) amended the legal definition of “marijuana” to exclude hemp that contains a maximum of 0.3% THC on a “dry-weight basis.” This effectively allows hemp-based goods or services that fit this definition to be in compliance with federal law.
To obtain federal trademark registration for goods or services that fall outside of this definition (even though these goods or services are in compliance with the relevant state law), cannabis-based companies can utilize creative strategies. One strategy is called “registering around the edges” and is done by registering a mark for any peripheral goods or services that fall outside the purview of the CSA.
Another strategy is to obtain state trademark registration and common-law rights. While this strategy can help cannabis-based companies protect their trademark, it is far less of an adequate protection as compared to those provided by federal registration.