Florida inching closer to medical marijuana regulations

Medical marijuana has been a reality in Florida for several years via the “Charlotte’s Web” low-THC path, or, via the path for patients who are terminally ill.  However, as of January 3, 2017, a new path has been created for a much more inclusive class of medical marijuana patients.  The new protocol will not be limited to low-THC or to terminally-ill patients. Rather, it will be available to those with specifically-listed conditions such as cancer, glaucoma, PTSD, HIV, and, a “chronic nonmalignant pain” catch-all condition.  On June 23, 2017, Governor Scott approved Senate Bill 8-A, currently found at Chapter 2017-232 of the Laws of Florida.

While the laws provide a specific framework for the new medical marijuana system, many details are yet to be drafted, which is the current task of the Department of Health’s Office of Medical Marijuana Use.  “But wait, this is an intellectual property blog, why are we writing about this?”  And, “I’ve heard that Florida uses the ‘vertical integration’ model, which limits participants in the industry.”  True.  But, as more patients are added to the medical marijuana registry, more licenses will be added for cultivators and treatment centers (yes, they must be the same entity).  And, we expect that each year there will be adjustments to the regulations and laws as the market takes shape.

So, why is this important from an intellectual property perspective?  For a number of reasons.  For example, as long as marijuana is a Class 1-scheduled substance under the Controlled Substances Act, any cultivation, possession, sale, transport, etc. of cannabis is illegal at the federal level.  It does not matter that Florida is legalizing certain aspects.  Thus, your brand for a medical marijuana product is likely unregistrable via the United States Patent and Trademark Office.  (There are registrations for marijuana-related goods and services, but if the federal application reveals goods or services that in any way might violate the CSA, then the application will likely be rejected.  See my prior blog post HERE.)

Despite the federal obstacles, your brand may be registered under Florida’s state trademark registration system.  For example, there are already state registrations for businesses such as a nursery/dispensing organization and an independent cannabis testing lab.  It therefore appears as if Florida will issue registrations for trademarks which would otherwise not be allowed registration at the federal level.

But, before you start filing your state trademark applications, there are numerous issues you need to discuss with your attorney, such as the requirement that you are actually using the mark in commerce at the time of filing the application.  Florida does not offer an “intent-to-use” application as is available at the federal level. Thus, you cannot “reserve” a brand by filing an intent-to-use application.  More importantly, if you are a licensed dispensing organization or seek to become one, you will be bound by the new law, and the new law contains restrictions on your advertising practices, including requiring Department of Health approval of your trade name!  Here’s an example from Chapter 2017-232:

A medical marijuana treatment center may not engage in advertising that is visible to members of the public from any street, sidewalk, park, or other public place, except:

1. The dispensing location of a medical marijuana treatment center may have a sign that is affixed to the outside or hanging in the window of the premises which identifies the dispensary by the licensee’s business name, a department-approved trade name, or a department-approved logo. A medical marijuana treatment center’s trade name and logo may not contain wording or images commonly associated with marketing targeted toward children or which promote recreational use of marijuana.

2. A medical marijuana treatment center may engage in Internet advertising and marketing under the following conditions:

a. All advertisements must be approved by the department.

b. An advertisement may not have any content that specifically targets individuals under the age of 18, including cartoon characters or similar images.

c. An advertisement may not be an unsolicited pop-up advertisement.

d. Opt-in marketing must include an easy and permanent opt out feature.

Another example comes from the section of the law which states what must be included on the packaging for the medical marijuana product:

The product name, if applicable, and dosage form, including concentration of tetrahydrocannabinol and cannabidiol.  The product name may not contain wording commonly associated with products marketed by or to children.

As you can see, the Department of Health must approve your trade name and logo.  Further, your Internet-based advertising must be approved by the Department of Health.  Oddly, there is a specific ban on “unsolicited pop-up advertisements,” and there is an “opt-out” requirement for marketing (which is likely already a requirement via the federal CAN-SPAM law).  As for the packaging requirement, while the law does not say that the Department must approve brand names, the current guidance is simply that the brand name of the product “may not contain wording commonly associated with products marketed by or to children.”  One wonders what the drafters had in mind when banning names associated with products marketed “by” children.  I understand not using terms associated with products marketed “to” children, but “by” children?  As in, lemonade and Girl Scout Cookies?  Aha!  Girl Scout Cookies happens to be the name of a very popular strain of cannabis, so perhaps that was the reason for including “by” children.  This provision would certainly prohibit selling a “Girl Scout Cookie” strain of cannabis concentrate oil.

Since the Department of Health is only just now writing the relevant regulations, we don’t know what other implications there may be for marijuana-related-business branding, but we do know that branding will be tightly controlled.

Of course, this is just one small issue related to intellectual property and the cannabis industry.  Other issues such as trademark licensing, the federal/state disconnect on trademark registrations, patenting cannabis-related inventions, trade secrets, copyrightable content (and ownership thereof), and many more remain just as important.  Given the high level of risk and high-cost of entry into this market, it is critical to carefully and cautiously plan your participation.  And, while the majority of the States now have some form of legal marijuana use, it is worth repeating (again, and again, and again) that federal law treats the cultivation, possession, and use of marijuana for any purpose – even a medical one – as a crime, regardless of state law.  Accordingly, the importance of due diligence cannot be overstated.

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