Is Your Cannabis Counterfeit? Police & Trademark Lawyers Monitoring Closely

Throughout Southern California, marijuana dispensaries are reportedly selling cannabis products that are counterfeit – capitalizing on another firm’s branding, holding out one’s illicit products as legal or both. Law enforcement and marijuana business lawyers in Los Angeles are actively monitoring both fronts.counterfeit cannabis

The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) establishes a complex maze of rules and regulations to ensure pot products sold to the public are safe and legal. That means cultivators, manufacturers and dispensaries are vetted and licensed, cannabis goods are tracked seed-to-sale and quality assurance testing is conducted to limit consumers’ exposure to dangerous metals and pesticides.

Despite this, black and gray market marijuana operations in L.A. abound.

With this expansion of the cannabis market, properly-licensed cannabis corporations are increasingly the lookout for impostors profiting from the intellectual property (business and product production methods, branding and marketing) in which they’ve invested significant sums.

This is complicated, considering the fact both U.S Trademark Policy and federal court rulings (example In re PharmaCann LLC) , are pretty clear on the fact that cannabis companies can’t expect the same kind of intellectual property protections pursuant to trademark rights as other businesses, thanks to the illegality of marijuana sales at the federal level per the U.S. Controlled Substances Act.

Copyright law is a bit more lax. Additionally, purveyors of hemp-derived products – including CBD oil – are now considered legal with the passage of the 2018 Farm Bill late last year.

Los Angeles marijuana business lawyers can assist entrepreneurs on the path to legitimacy, defend against criminal law enforcement action, pursue intellectual property rights and defend against cannabis copyright litigation.

Proliferation of Illegal Marijuana Products in Los Angeles

The Los Angeles Police Department estimates there are roughly 500 illegal marijuana dispensaries operating in the city.

Some companies are facing civil litigation from the Los Angeles district attorney for allegedly selling dangerous, pesticide-laden pot products to the public. However, to our knowledge there haven’t been any serious injuries or illnesses.

Products purchased online may be especially problematic, both for sellers and consumers. NBC4 I-Team in Los Angeles shopped online retailers for cannabis online, discovering many illicit products – from CBD oil to candy edibles – using the same or very similar names as legitimately-licensed dispensaries.

Some used packaging that was so convincing, those who regularly purchased the same product from the licensed stores could not tell the difference. Even a spokesperson for one of the licensed Los Angeles marijuana dispensaries was unable to decipher until noting a small seal in hologram placed standard on the legal product box. Most consumers aren’t likely to notice it. As Los Angeles marijuana business attorneys can explain, evidence of this level of consumer confusion, combined with the similarity of the product, geographic market and sales methods, form the good foundation for an intellectual property lawsuit. 

(The dispensary selling that particular product has since closed shop.)

Many consumers said they do take care to invest in legal marijuana products, not only because of the potential criminal consequences for themselves, but because of the health risks. This is particularly true for those who take marijuana, CBD oil and related products for health reasons.

Pesticides and heavy metals can cause severe illness and potentially cause severe side effects like hearing loss and memory issues.

Cannabis Companies Can Protect Their Consumer Goods

For licensed firms looking to protect their product integrity, consider:

  • Auditing the chain of supply.
  • Obtaining trademark/copyright protections.
  • Use packaging that is custom, difficult to imitate.
  • Aggressively pursue legal action against counterfeit sellers.

Our Los Angeles marijuana business attorneys can help if you need additional information and guidance.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 714-937-2050.

Additional Resources:

Real or Counterfeit? How to Avoid Cannabis Product Impostors in LA, May 1, 2019, By Joel Grover, NBC-4 Los Angeles

More Blog Entries:

California Industrial Hemp Farming: What to Know to Do It Legal, May 9, 2019, Los Angeles Marijuana Business Lawyer Blog