Tag Archives: protection

Senate Committee Votes to Keep Medical Cannabis Protections

By Aaron G. Biros
No Comments

The Senate Appropriations Committee approved the amendment to continue protecting state-legal medical cannabis markets from the Department of Justice. The amendment, previously known as the Rohrabacher-Farr Amendment, prevents the DOJ from using funds to target medical cannabis operations, patients and businesses in states where it is legal.

Every time Congress reviews the budget, this amendment needs to be included to keep protecting the medical cannabis community. While the rider still needs to make it through the final version of the appropriations bill, it is a big win for the status quo.

According to Aaron Smith, executive director and co-founder of the National Cannabis Industry Association (NCIA), this indicates that Congress is resisting Attorney General Jeff Sessions’ calls to end the protections. In a letter sent back in May, Sessions urged the Senate on both sides of the aisle to stop protecting medical cannabis.

Many see this morning’s vote as Congress standing up to Jeff Sessions, and standing up for medical cannabis patients. In a letter to NCIA members, Smith says that a lot of work still needs to be done, but this is an important first step. “This is not the end of the story. There are still many steps to go before a new budget is finalized,” says Smith. “But this is an important indicator that our allies in Congress are standing up for us, even in the face of DOJ opposition.” In an official NCIA statement, Smith acknowledges the hurdles that still face the amendment. “Now it’s time for the House to do the same,” says Smith. “Patients deserve access to care, states deserve respect, and members of the House deserve the opportunity to vote on amendments like this that have the strong support of their constituents.” Bipartisan support like this in Congress is needed to prevent the current administration and the DEA from meddling in states with legal medical cannabis.

 

National Association of Cannabis Businesses Announces Launch

By Aaron G. Biros
No Comments

According to a press release, the National Association of Cannabis Businesses (NACB) launches today, becoming the first self-regulatory organization (SRO) for the cannabis industry. With their mission to help compliance, transparency and growth of cannabis companies, they will lead member businesses in establishing voluntary national standards, addressing issues like advertising and financial integrity.

A team of experienced legal regulatory professionals will lead member businesses through a process of developing those standards. Andrew Kline, president of the NACB, was a senior advisor to Vice President and then-Senator Joseph Biden, served as an Assistant United States Attorney in the District of Columbia and in the Enforcement Bureau of the FCC. Their chief executive officer, Joshua Laterman, began working on NACB three years ago, but before that he had two decades of experience as general counsel at global financial and investment institutions. Doug Fischer, their chief legal officer and director of standards, spent the past nine years in cannabis law and financial regulation and enforcement at the law firm Cadwalader Wickersham and Taft.

Andrew Kline, president of NACB

According to the press release, SROs have proven to be effective in other industries at limiting government interference and overregulation, while preserving public safety. FINRA (Financial Industry Regulatory Authority) is an example of an SRO that serves the financial industry. It is a non-governmental organization that helps regulate member brokerage firms and exchange markets, working to help their members stay compliant with regulations set by the Securities and Exchange Commission. Much like the rapid growth of the financial markets over the past 30 years, the cannabis industry is experiencing exponential growth while regulators try to keep up.

“The cannabis industry is on a historical growth trajectory that is expected to continue for years to come, but even the most established, well-run businesses recognize that the future favors the prepared,” says Josh Laterman, CEO of NACB. “As other industries have experienced with their SROs, establishing and committing to voluntary national standards will enable cannabis business owners to demonstrate impeccable business and compliance practices to consumers, regulators, banks and investors.”

According to Doug Fischer, chief legal officer and director of standards, they will focus on a variety of topics that align with the federal enforcement priorities. So these standards might not cover some of the product safety and quality aspects that ASTM International and FOCUS touch on, rather addressing issues like advertising, financial integrity, preventing diversion across state lines, prevention of youth use and corporate responsibility. Another important distinction to make is that an organization like ASTM International sets standards, but the NACB as an SRO is tasked with enforcing them as well.

Doug Fischer, director of standards and chief legal counsel

“From our perspective, businesses have been having a hard time navigating the complex state regulations, particularly those operating in multiple states,” says Fischer. “That is further complicated by the current administration not solidifying their stance on recreational cannabis.” The Cole Memo put out under the Obama Administration set clear federal enforcement priorities, allowing cannabis businesses and states to identify ways to avoid federal government interference or prosecution.

The current administration has done nothing but fuel regulatory uncertainty. This is particularly important given this week’s news regarding the leaders at the Justice Department making inflammatory and threatening statements regarding legal medical cannabis. “It causes these businesses, who should be focused on their own day-to-day operations, instead focusing on complying with what they think the federal government wants and regulatory compliance with state regulations,” says Fischer. “We can help solve that problem by making it easier for companies to become compliant, not only with state regulations but federal guidance as well. This has been proven by other SROs, that if we set our own standards and abide by them, federal regulators might be guided by the industry’s self-policing in determining how to regulate the cannabis industry.” According to Andrew Kline, it could also provide a window of opportunity for better banking access.

The founder and CEO, Joshua Laterman, used to work in the banking industry and recognized the need for a cannabis industry SRO. “He saw an incredible opportunity in a projected $50 billion market by 2026, and as a former banker he saw the opportunity for banks to do business in the industry, but they don’t know who to trust,” says Kline. “Starting a self regulatory organization can help fill that void, allowing companies to identify and put a stamp of approval on a segment of the population that is uber-compliant, therefore giving banks a view into who they should and shouldn’t do business with.” While it won’t immediately resolve the many issues associated with cannabis businesses’ accounting, the NACB could be a major help to smaller businesses looking to prove their worth. “The important point here is that based on the experience of our team, we know what is important to the federal government, and we understand that members will be shaping standards with us, so we will also guide them to federal priorities,” says Kline.

Fischer says a self-regulatory organization is always driven by the industry and needs of the members, but they have the added unique challenge of working in a web of competing governmental interests. “Self-regulatory organizations can shape the future of regulation; we don’t know if or when federal prohibition will end, but if it does, the government is going to look at a variety of areas for regulations,” says Fischer. “We might be able to help shed light on our self-regulating nature and if we can demonstrate the best practices for specific areas, states and even the federal government could look to that, giving our members an advantage.” According to their press release, licensed cannabis growers, dispensaries or any other ancillary business may apply to become members. Some of the founding members include Buds & Roses, Etain, Green Dot Labs, Local Product of Colorado, Matrix NV, Mesa Organics, among others.

Protecting Your Innovative Cannabis Strains With a Strong Intellectual Property Strategy: Part 3 – Trademark Protection for New Cannabis Strains

By Dr. Travis Bliss
No Comments

In the first two installments of this three-part series, we explored the reasons why cannabis breeders and growers should adopt a strong IP strategy and discussed the types of patent protection that they should consider. In this final installment, we examine trademark protection for new cannabis varieties and the unique trademark issues currently facing the cannabis industry.

What is a trademark and what does it really get me?

A trademark is a visual feature of some sort, such as a word, phrase, or symbol, which is used to identify a company’s goods and to distinguish those goods from the goods of a competitor. Like a patent, a trademark is effectively an exclusionary right, meaning that it gives the owner the right to exclude others from using the same mark, or a mark that is confusingly similar, in connection with the same type of goods. The test for determining whether a competitor’s mark infringes upon your trademark is whether there is a likelihood of confusion in the mind of consumers over the source of the goods. Put another way, the test is whether a consumer is likely to be confused into believing that your competitor’s goods are actually associated with your company.

How long does this exclusionary right last? So long as certain requirements are met, a trademark can last forever. While a patent that protects a new cannabis variety will expire in 20 years, a trademark that also covers that strain can be maintained forever, which allows patents and trademarks to be used together to offer both stronger and longer lasting protection over a new cannabis variety.

How do I get a trademark?

Trademarks exist under both state and federal law. In many states, to obtain common law trademark protection, one does not need to file anything with a government entity – you simply need to use the mark (e.g., the word or logo) in connection with your company’s goods and use a “TM” in conjunction with the mark. However, the protections afforded by such a common law mark are relatively limited, so it is generally advisable to register the mark with the state and/or federal government in order to strengthen the exclusionary rights. Along the same lines, federal registration offers certain advantages over state registration, such as the right to use the mark nationwide and the right to challenge infringers of the mark in federal court.

To register a trademark, breeders and growers need to file a trademark application with the relevant government entity – the U.S. Patent and Trademark Office (USPTO) for a federal mark or various state government offices for state marks. For both state and federal trademark registrations, an applicant typically must demonstrate that 1) he/she is the first to use and register the mark for the type of goods at issue, 2) that he/she is actually using the mark in commerce or has intent to do so, and 3) that the mark is distinctive. Of these three requirements, proving distinctiveness is often the one that gives applicants the most difficulty.

A mark is “distinctive” if it is capable of identifying the source of a particular good. Because of this requirement, a brand name that is generic or merely describes the goods, such as “Large Bud Cannabis Plants,” is often less desirable because it is less distinctive and thus may be difficult to register. Conversely, a brand name that is “arbitrary” or “fanciful,” such as “Moose Foot Cannabis,” is often more distinctive and therefore may be easier to register, generally making it a more desirable choice as a brand name. This issue of distinctiveness is something that cannabis growers and breeders should keep in mind as they develop a branding strategy for their new varieties.

Unique trademark issues for the cannabis industry

Like almost every aspect in the cannabis industry, there are some unique trademark issues that breeders and growers must contend with. With regard to federal registration, the USPTO will currently not allow registration of any trademark for cannabis products that are illegal under federal law. However, that does not mean that every cannabis-related product cannot obtain any federal trademark protection. The reason for this is that a federal trademark registration is tied to specific types of goods that are being sold under the mark, so the ability to register a desired brand name will depend on what type of goods are covered by the trademark.

To that end, a mark that covers actual cannabis products (like plants or edibles) cannot currently be federally registered even if the mark does not actually include the word cannabis. For example, a breeder likely could not federally register the brand name “River’s Edge Farms” for the sale of cannabis plants and plant parts. However, a mark that covers products that are related to the cannabis industry may be allowable – even if it references cannabis –if the goods being sold under the mark are not themselves illegal under federal law. For example, “Pot Maximizer,” a trademark name for a grow light that is being sold to cannabis growers, could be federally registered since it is not illegal to sell a grow light.

Under current federal law, which prohibits the cultivation and sale of cannabis plants and their parts, a federal trademark registration is certainly not currently available for new cannabis varieties. However, this does not mean that trademark registration for new cannabis varieties is impossible. Most states with legalized cannabis will allow registration of state trademarks for cannabis products (e.g., Washington, Oregon, Colorado).

Further, since branding is a long-term strategy it is important for growers and breeders to keep the requirements for federal registration in mind when adopting a branding strategy to ensure they can obtain federal protection for their current brand names if and when cannabis becomes federally legal.

The bottom line…

Despite the fact that there are currently some unique trademark issues for cannabis growers and breeders, trademark protection can be a very valuable asset that both increases the level of protection and extends it beyond what can be obtained through a patent alone. As such, breeders and growers should adopt a branding strategy for their new varieties that attempt to maximize trademark protections for those varieties, both now and in the future.

Breeders and growers should select brand names that are sufficiently distinctive to meet the requirements of both federal and state trademarks. Right now, they will likely need to focus on state trademark rights by applying for state trademark registrations where available and by making sure that they are treating the mark as a brand name of their company (e.g., using a “TM” after their marks). However, they should also keep a close eye on the status of federal registration laws so that they can apply for federal registration of their marks when it becomes available.

Additionally, as discussed in prior articles, growers and breeders should also be seeking to maximize patent protection for their new cannabis strains so that they can use that protection in addition to trademarks to create a stronger IP position. Cannabis growers and breeders who adopt such a comprehensive strategy now could reap huge rewards down the road, especially if (or when) cannabis becomes federally legal, either at the medical or recreational level.

Legal disclaimer: The material provided in this article is for informational purposes only and not for the purpose of providing legal advice. The opinions expressed herein are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. The provision of this information and your receipt and/or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter.

Protecting Your Innovative Cannabis Strains With a Strong Intellectual Property Strategy: Part 2 – Patents for New Cannabis Strains

By Dr. Travis Bliss
No Comments

In the first installment of this three-part series we explored the reasons why cannabis breeders should adopt a strong IP strategy sooner rather than later and looked briefly at the types of IP that those breeders and growers should be considering. In this second installment, we will examine in more detail patent protection for innovative new varieties of cannabis and how one can use that patent protection to further their business objectives.

What is a patent and what do I do with one?

A patent is a right granted by the government to protect a new and useful invention. Importantly, a patent gives its owner an exclusionary right as opposed to a right to do something – the patent owner has the right to exclude others from making, using, selling, offering to sell, or importing the invention (or, for a plant, any of its plant parts) for the term of the patent, which is 20 years for the types of patents that can be used to protect new cannabis varieties.

Because it is an exclusionary right, there are essentially two things that a patent owner can use a patent to do: 1) disallow anyone else from producing and selling that variety (or any of its parts) so that the patent owner is able to capture all of the sales for that variety, or 2) use license contracts to allow other growers to grow the variety while paying royalties back to the patent holder. The latter option can often be beneficial because it can greatly expand production of the variety by licensing to multiple growers. However, this does require some oversight on the part of the patent holder to make sure that the product those growers are producing is high quality –growers who produce poor quality product can hurt the existing brand. Cannabis breeders should consider these options up front when formulating their IP strategy.

Which type of patent should I use to protect my new variety?

As a further consideration, there are two different types of patents that can be used to protect new plant varieties and there are multiple factors to consider when determining which one to pursue.

U.S. Plant Patents are a special type of intellectual property that is used solely for the protection of asexually/vegetatively reproduced plant varieties. Traditionally, plant patents have been used to protect new varieties of ornamental and fruit trees and shrubs, such as a new variety of rose bush or a new variety of apple tree, such as the ‘Honeycrisp’ apple tree, patented in 1990. This type of patent has recently been used to protect a new cannabis variety called ‘Ecuadorian sativa’, while several other cannabis varieties, ‘Midnight’, ‘Erez’, and ‘Avidekel’ varieties are awaiting plant patent approval.

On the other hand, a “utility patent” can be used for new “compositions” (e.g., a new type of grow light) or new types of “methods” (e.g., a new method of extracting compounds from cannabis or a new method of growing cannabis to produce higher THC content). This type of patent can also be used to protect a new plant variety so long as the applicant can demonstrate that the variety is novel and not obvious over what was already known in the art. To date, two utility patents have been issued to protect cannabis varieties that exhibit certain cannabinoid and terpene profiles (U.S. Patent Nos. 9,095,554 and 9,370,164), and other similar utility patent applications are also pending (e.g., U.S. Patent Pub. No. 2014/0298511).

One of the main determining factors in deciding which type of patent to pursue is the nature of the invention. Growers and breeders will likely want to seek a plant patent if they have developed a new variety of cannabis plant: 1) which was made using simple breeding techniques, 2) which can be stably reproduced in an asexual manner (such as by cuttings and cloning), and 3) which is different from its parents and certain other strains on the market, but not completely distinct from everything that already exists. On the other hand, growers and breeders may want to consider a utility patent if they have developed a new variety of cannabis plant: 1) which has unique features in comparison to everything else that exists today (such as a unique disease resistance or chemical makeup), 2) which has unique features that can be demonstrated by some sort of biological or chemical test, and 3) that can be reproduced either asexually or by seed. It is also important to keep in mind that these two routes are not mutually exclusive – one could apply for both types of patent if the variety satisfies the criteria for both.

Though there are numerous similarities between the processes for obtaining both types of patents, there are also clear differences that should be taken into consideration when making the decision about which type of patent to seek. For instance, the grant rate for plant patents is much higher, meaning there is a higher likelihood that the plant patent application will eventually be granted compared to a utility patent application. Further, plant patent applications typically move quicker through the Patent Office, frequently being granted in approximately 18 months, while utility patent applications typically take two to four years (or more) to issue.

Another factor that should be considered is cost. Because a plant patent application is much simpler to prepare and typically moves through the Patent Office more swiftly, the cost for obtaining a plant patent is generally significantly lower than for a utility patent.

Determining which type of patent to pursue requires consideration of numerous factors. However, it is important to keep in mind that, regardless of which type of patent a grower or breeder seeks, there are certain time limitations that can impact the right to obtain a patent. For example, patent protection can only be sought if the variety to be patented has not been sold, offered for sale, or otherwise made publicly available more than one year before the patent application is filed. After that time, the invention becomes part of the “public domain.” So if a breeder chooses to wait to seek patent protection for a new variety, they risk losing the ability to ever get that protection.

Clearly, growers and breeders have to weigh several options when formulating a patent strategy, including what type of patent to pursue and what to do with the patent once they obtain it. Thinking through these issues early on allows the cannabis breeder an opportunity to formulate a strategy that is most beneficial in furthering their business objectives. Additionally, regardless of the type of patent strategy used, it is often helpful to combine it with trademark and branding strategy, which allows the business to utilize a more comprehensive approach to IP for their innovative strains. The third installment of this series will focus on trademarks for cannabis products and some unique issues that facing the cannabis industry today.

Legal disclaimer: The material provided in this article is for informational purposes only and not for the purpose of providing legal advice. The opinions expressed herein are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. The provision of this information and your receipt and/or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter.

Protecting Innovative Strains with a Strong Intellectual Property Strategy: Part 1– Why IP & Why now?

By Dr. Travis Bliss
3 Comments

This three-part series will provide an in-depth look at intellectual property (IP) protection that is available for innovative and new varieties of cannabis. In this first installment, we will examine the reasons why cannabis breeders should adopt a strong IP strategy and look briefly at the types of IP that they should be considering. In the second and third pieces, we will look at the types of IP protection that can be used to protect innovative cannabis varieties and the unique IP issues the cannabis industry faces right now. Taken together, these articles will provide insight into IP strategies that cannabis breeders and growers can employ today to help prepare for the day that cannabis becomes legal nationally.

Why should I use IP to protect my cannabis varieties?

First and foremost, as the cannabis industry continues to move from a small, tight-knit community of breeders and growers into a ‘big-business’ industry, IP is the only way for breeders to protect the investment of time, energy and money that they put into developing new and innovative strains of cannabis. At a recent cannabis growing conference, one sentiment felt among numerous breeders was a feeling of frustration– stemming from the fact that they had spent many years developing new varieties of cannabis and, now that the industry is exploding, they are not getting recognition for all that effort. The way to avoid this issue is to protect novel varieties with IP to ensure that you are given proper credit for all of your hard work.

Moreover, an examination of industries that have strong similarities to the cannabis industry, such as other plant-based industries and ‘vice’ industries, provides compelling evidence that IP will become a main driving force in the cannabis industry as it continues to mature. For example, the fruit and hops industries have been relying upon strong plant patent and trademark protection for many years. The extremely popular Honeycrisp apple is a patented variety and the Amarillo hops variety (officially called ‘VGXP01’) is protected by both a U.S. Plant Patent and a federally registered trademark. Similarly, the alcohol and tobacco industries rely upon strong trademark and branding strategies, with many consumers being extremely brand-particular.

Additionally, there is strong evidence that the cannabis industry is primed for intellectual property protection. Since long before cannabis was legalized, consumers who were buying cannabis on the black market often sought out a particular variety from their dealer, something that becomes more prevalent as the industry continues to mature.

Why is now the time to think about IP?

First, the relevant governmental bodies have now provided some clarity as to the types of IP protection that can, and cannot be obtained for cannabis. For example, it is now clear that the U.S. Patent and Trademark Office (USPTO) will issue patents that cover new cannabis plant varieties and related innovations, such as novel growing methods. In fact, the first U.S. Plant Patent that covers a novel cannabis strain, called ‘Ecuadorian Sativa’, issued in late 2016.

Similarly, though federal trademark registration is not currently available if the product being protected is a cannabis product that is illegal under federal law. Federal trademark registration may be available to protect products related to the cannabis industry that are not themselves federally illegal (e.g., grow lights, fertilizer, etc.). Many states with legalized cannabis will grant state trademark registrations for cannabis products regardless of whether the products are viewed as illegal under current federal law. With this increased clarity, companies can now begin to formulate a comprehensive IP strategy that ties together the various types of IP protection.

Additionally, cannabis breeders and growers should look to adopt an IP strategy now because there are certain time bars that exist that may result in loss of rights if they wait. For example, as we will discuss in Part 2 of the series, patent protection can only be sought if the variety to be patented was not sold, offered for sale, or otherwise made publicly available more than one year before the patent application is filed. So if a breeder chooses to wait to seek patent protection for a new variety, the ability to ever get that protection may be lost.

The bottom line is that, to solidify their place in the market, cannabis breeders and growers should be formulating an IP strategy sooner rather than later. Those forward-thinking growers and breeders that adopt a comprehensive IP strategy up front will gain a distinct competitive advantage over competing growers and breeders down the road – an advantage that will become even more important if and when large corporations begin to move into the cannabis space. Those companies that have strong brands in place will be better equipped to survive and thrive in the face of pressure from legal teams at larger companies.

The next two installments of this series will examine the specifics of the types of IP protection that can be sought and the unique issues that the cannabis industry faces with each of them.

Legal disclaimer: The material provided in this article is for informational purposes only and not for the purpose of providing legal advice. The opinions expressed herein are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. The provision of this information and your receipt and/or use of it (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter.

Congress Passes Budget With Protections for Medical Cannabis

By Aaron G. Biros
No Comments

On May 1st, Congress reached a bipartisan deal to keep the government open and funded through September 30th, 2017. Congress approved the appropriations bill that sets the government’s spending with an important section in it relating to cannabis. Section 537 on page 230 states that the Department of Justice cannot use funds to interfere with states’ legal medical cannabis programs.

The bill uses similar language to The Rohrabacher–Farr amendment, a bill that was originally introduced in 2013 to prevent the Department of Justice from spending money on enforcing the Controlled Substances Act in states with legal medical cannabis programs. This new appropriations bill, with the language in section 537, effectively achieves the same thing. “None of the funds made available in this Act to the Department of Justice may be used, with respect to any of the States of… to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana,” reads the bill. The language includes a mention of the 40 or so states and territories with some form of medical cannabis program, legislation or bill.

The language of section 537 (second half)

This means that Attorney General Jeff Sessions is relatively powerless to go on a sort of ‘crackdown’ on medical cannabis programs. Given Sessions’ previous comments and general views on cannabis, this should put cannabis industry stakeholders at ease for the time being. Of course, this budget is only for the 2017 fiscal year, so come September, the same or similar language needs to be included in the next appropriations bill. With Jeff Sessions’ task force still investigating federal cannabis policy, it is still very possible we could get a clear policy decision in the near future.

“We are encouraged that the Federal Government and NIDA are recognizing the true and powerful medical benefits that cannabis provides, especially in the war against devastating opiate-based drug addiction, abuse and death,” says Sally Vander Veer, President of Medicine Man Denver. “We have seen anecdotal evidence of this as reported by our patients/customers (and the beneficial effects of cannabis in numerous other conditions) since we opened our doors in 2010. Our hope is that this acknowledgment will open the door to additional research, eventually leading to legal and safe access to cannabis medicine for all Americans.”

The following section also includes a protection of industrial hemp research, as defined in the Agricultural Act of 2014, which basically means universities and institutions can research it. SEC. 538. “None of the funds made available by this Act may be used in contravention of section 7606 (‘‘Legitimacy of Industrial Hemp Research’’) of the Agricultural Act of 2014 (Public Law 113–79) by the Department of Justice or the Drug Enforcement Administration.” With all of the uncertainty and inconsistent comments coming out of the Trump administration, at least we have a sense of security in the medical cannabis community through the summer.

U.S. Senators to Treasury: Protect Banking for Cannabis

By Aaron G. Biros
No Comments

On Wednesday, ten U.S. Senators from both sides of the aisle signed a letter pleading with the U.S. Treasury Department to help with banking for cannabis businesses, according to Lisa Lambert of Reuters. The letter seeks some form of protection for cannabis-friendly banks and credit unions, even those doing business with ancillary companies.

Notable signatories include Senators Elizabeth Warren (D-Massachusetts), Bernie Sanders (D-Vermont) and Jeff Merkley (D-Oregon). “Most banks and credit unions have either closed accounts or simply refused to offer services to indirect and ancillary businesses that service the marijuana industry,” states the letter. “A large number of professionals have been unable to access the financial system because they are doing business with marijuana [sic] growers and dispensaries.”

U.S. Capitol in early December Photo: US Capitol, Flickr
U.S. Capitol in early December
Photo: US Capitol, Flickr

According to a spokesman, the Treasury Department’s Financial Crimes Enforcement Network will be addressing it. It is unclear exactly how Sen. Jeff Sessions, Trump’s attorney general nomination, would deal with cannabis-friendly states, let alone banking for them.

Many think Sessions would restrict access, ramp up federal crackdowns and make it difficult for cannabis businesses to grow. Once again however Jeff Sessions has not shared any plans on enforcing the Controlled Substances Act or cracking down on legal cannabis.

Cannabusiness Sustainability

Packaging: Four Sustainability Principles

By Brett Giddings, Olivia L. Dubreuil, Esq.
No Comments

As with any product, packaging has a vast range of sustainability considerations that should be accounted for in its design, development and use. Often the most visible component of any product, and certainly so for most forms of cannabis products, packaging is a key sustainability issue for the entire cannabis supply chain.

What is sustainable cannabis packaging and what does it look like? This can be a loaded question, but one we can revisit after considering the basic functions of packaging.

Cannabis packaging, and packaging generally, is designed to perform three basic functions: protection, preservation and promotion. If it does not adequately address these three areas then the chance of product failure, loss of consumer trust and increased waste is likely.

Let’s take a high level look at each of these:

  • Protection: Whilst cannabis is not currently travelling huge distances, like some of the food we consume, protection is key at each point of the supply chain. Inputs into the growing process often come packaged, flowers and such are packaged for shipping and storage, bulk-packaged cannabis is sent to dispensaries, extractors, etc, and ultimately re-packed into what will become the consumer-facing packaging. Importantly for cannabis, it may require an additional level of protection to ensure children are not able to access the contents.
  • Preservation: Like any consumable item, cannabis has a shelf life, and packaging plays a key role in preserving the usability of the product. Whether it is a chocolate, a cannabis-infused drink, or flowers, it is critical that each product maintains a certain level of quality and consistency.
  • Promotion: Packaging allows one part of the supply chain to communicate specific elements of a product to those further along the supply chain. The most obvious, and for cannabis probably the most important, is the communication of contents within a packaged item (labeling), such as the percentage of CBD in a gummy or origin of a particular bud. Packaging is also the reflection of a brand, an image.

Taking these basic elements into account, we can apply a framework for designing and choosing more sustainable packaging. This framework for cannabis packaging accounts for and balances four principles: Fit for purpose, efficient, low impact and re-usable.

Fit-for-purpose. Essentially, this involves making sure that the packaging adequately performs the ‘3-Ps’ above. Packaging commonly accounts for less than 10% of the energy inputs that have gone into a complete product (for example, a candy packaged in a foil-lined plastic wrap). If the packaging fails to protect and preserve the candy, then the energy (or the water, the material, the investment) embedded in the product it contains is wasted.

The second principle relates to material efficiency. Once the packaging works, it is then important to minimize material and resource inputs. Effectively designed packaging uses lighter-weight materials and reduced numbers of materials and components. It also reduces air space and maximizes transport yields.

The third principle involves using low-impact materials. Material inputs should come from non-controversial sources, such as verified/certified supply chains and suppliers that have been assessed to ensure appropriate sustainability-related issues are addressed. Wherever possible, consider renewable and recycled-content inputs, and those made using renewable energy.

Finally, cannabis packaging should be re-usable, recoverable and/or recyclable at end of life. Consider materials and design formats that can be reused multiple times, and packaging that can be recycled and composted by consumers in the systems readily available. Linking back to the third ‘P’, Promotion can be used to make sure that your packaging clearly communicates what someone should do with your packaging. If it is recyclable, returnable, reusable or plantable, tell them it is and how to proceed.

Bear in mind that the most sustainable packaging options are often the result of thinking outside the box. The design process of your packaging should include brainstorming and researching outside of your own industry. What are new and innovative solutions, new materials, new ways to think about product conception that could negate the need for unnecessary packaging elements. New and innovative packaging solutions can raise your business’ profile, catch consumers’ attention and attract investors. It showcases your business as a forward-thinking one.

Packaging sustainability can look different for each and every cannabusiness. It is important to make sure that the four principles are part of your packaging selection/design process. As with any other sustainability issue, it is best to start thinking about packaging early on, and considering packaging as a part of the actual product system.

If you are not thinking about packaging sustainability, be assured that regulators, consumers and your industry peers are. Make sure you are driving the discussion about packaging, rather than being driven by those who may not fully understand your packaging needs.

Marijuana Matters

Patent Options Available for Breeding Cannabis

By David C. Kotler, Esq.
No Comments

Patent No.: 909554. Date of patent: August 4, 2015. Years from now, historians and academics may look back on this patent number and date as a watershed mark in the evolution of legal cannabis. Feel free to read the 147 pages of the patent documents but, in short, it “leads to many innovations, provides compositions and methods for breeding, production, processing and use of specialty cannabis.” It was the first time that the U.S. Patent Office (USPTO) had issued a patent for a plant containing significant amounts of THC. One USPTO spokesman recently discussed with a journalist that “there are no special statutory requirements or restrictions applied to marijuana plants.” The following is a broad, and I mean really broad, overview of the options available to protect intellectual property within the cannabis species and strain realm.

Generally speaking, to be patent eligible, an invention must be useful, it must be new, it cannot be obvious and it must be described in a manner so that people of skill in the relevant specialty can understand what the invention is, make it and use it without engaging in undue experimentation. In terms of cannabis, essentially the breeder must have created a new and non-obvious strain over what already exists that is useful such as being highly resistant to molds or having a specific concentration of CBD.

Breeders potentially have a number of options available to them, despite the common belief otherwise. In the U.S. there are five types of intellectual property protection that breeders can obtain for new plant varieties or their use of clones:

One may seek protection for seeds and tubers, known as Plant Variety Protection. A tuber is essentially a swelled root that forms a storage organ. The Plant Variety Protection Office provides this protection. To apply for Plant Variety Protection, the applicant submits information to show that the variety is new, distinct, uniform and stable.

For asexually propagated plants except for tubers, a Plant Patent may be sought. These are sought through the USPTO. This is relatively inexpensive compared with a Utility Patent covering the genetics.

Trade secrets are often used to protect inventions that will not be commercially available or cannot be reverse engineered. For example, if a new strain is invented but is only commercially available in its final form, trade secret protection may be the best form. The most important thing to remember is that a company must follow a strict set of requirements to keep the trade secret confidential.

The last patent type protection could be through a Utility Patent. A Utility Patent can be issued for any type of plant showing its utility. These are issued by the USPTO. Seeking and obtaining a Utility Patent is expensive and complex.

In addition to Patent Protection, breeders may seek Contractual Agreements restricting the use of the clones (i.e. a material use agreement). The parameters that a breeder wishes to craft can essentially be crafted into the language of any type of agreement that is drafted to memorialize the relationship and terms between the parties.

A few broad-stroke items to keep in mind with regard to patents particularly relative to the patenting of cannabis strains and the like: First, is the passage of the America Invents Act which among other changes allowed for the U.S. to transition from a First-to-Invent patent system to a system where priority is given to the first inventor to file a patent application. Second, there are the potential bars based on different types of prior use.

Any discussion about the foregoing topic should necessarily include the question: Is it really good for the cannabis industry and its evolution? The dialogue moves out of one steeped in tradition, lure of trips through mountain passages, and potentially patient benefit or in search of higher quality and into connotations of business law and big businesses sweeping in to take over. It is an expensive process. It may be inevitable. In the meantime, protect yourself as best you can and as you see fit.