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February 20, 2023

Can California Cannabis Patents Survive Illegality Doctrine?

The federal Controlled Substances Act has long been the primary thorn in the side of the U.S. cannabis industry at-large. Despite state-legal marijuana cultivation, production, sales, and possession, its status as a Schedule I narcotic by federal law has had all kinds of adverse impacts. Among these: Companies struggle to protect their California cannabis patents, thanks to something known as the illegality doctrine. Los Angeles cannabis patents

Basically, the illegality doctrine is a principle arising out of English common law (first articulated by American courts way back in 1775) that basically says courts don’t have jurisdiction over claims that arise from acts that are illegal. So for example, if someone is unlawfully selling heroin and robbed, the victim may have no recourse for restitution of the stolen heroin or trafficking funds – because they were illegal in the first place.

With regard to cannabis company patents, there have been a flood of new state-legal marijuana brands and products on the market in recent years. But protecting those unique patents and trademarks has proven extremely challenging because of the illegality doctrine. Patents and trademarks are protected under federal law – which also considers the underlying substance they’re trying to protect as illegal.

However, as our Los Angeles marijuana business lawyers can explain, that may not be the last word on it.

Take, for instance, the case last year of Gene Poole Technologies, Inc. v. Coastal Harvest, LLC. This was a decision handed down by the U.S. District Court for the Eastern Division in California. This was a noteworthy case because up until then, no federal court had addressed whether it would allow state-legal cannabis companies to pursue patent protections. Here, the court held that the illegality doctrine was not a bar to enforcing a California cannabis product patent.

The outcome of this case wasn’t a guarantee, particularly given that in a number of other non-patent cannabis cases in federal court, the effectiveness of the illegality doctrine as a defense has been a bit of a mixed bag. Continue reading

April 27, 2022

Expect Candy Corp. Cases Against Cannabis Companies to Compile

By Cannabis Law Group

A recent lawsuit the maker of Skittles candy against a California-based cannabis company is indicative of a trend our Los Angeles cannabis attorneys expect to continue if marijuana business brands continue to copycat big-name candies. Los Angeles cannabis lawyer

In Wm. Wrigley Jr. Company v. Terphogz, LLC, the Chicago-based candymaker of Skittles launched an advertising campaign that involved the slogan, “Taste the Rainbow.” The advertising and packaging for their fruit-flavored candy shows the slogan with a large S logo. The company alleges that a cannabis company in Medocino is selling merchandize under the name Zkittlez, with illustrations of its goods advertised as looking very similar to the Skittles candy. On its website, which sells cannabis-related items and goods nationally (as well as to residents of Illinois, where plaintiff is based), it sells goods under the brand name Zkittlez, with the similar logo.

The defendants say they do not engage in cannabis sales, but rather license the intellectual property rights to cannabis companies in California nd Oregon. Defendants say they don’t engage in business in Illinois, run targeted advertising there, or run any companies or have professional contacts there. Three of the board members have never been to Illinois. Plaintiffs say, however, that prior to the website being shut down in May 2021, the Zkittlez branded goods were available for shipment to the entire U.S., with recorded gross proceeds somewhere around $32,000. The Wm. Wrigley Jr. Company is seeking treble (triple) damages for the alleged copyright infringement.

The defendants have tried to get the case dismissed. However in November, a judge rejected their motion to dismiss, meaning the case is continuing through the courts. Continue reading

October 25, 2020

California THC Potency Lawsuit Against Edibles Maker Settled

By Cannabis Law Group

A settlement has been reached in a lawsuit against a Canadian edibles maker for allegedly breaching California consumer protections laws for improper labeling of its THC and CBD products. Specifics of that settlement haven’t been made public, but the allegation was that the manufacturer of medicinal chocolates sold products in Southern California over the course of two years that failed to contain the amount of CBD and THC that was advertised. Los Angeles cannabis lawyer

Labeling lawsuits against CBD and THC product makers are increasing. As our Los Angeles cannabis attorneys can explain, it is imperative that companies ensure the level of THC and CBD in their products aligns with what is advertised. In this case, the lawsuit alleged the potency of these compounds in the products were “drastically” different from what was publicly claimed. Continue reading

October 30, 2019

Report: California’s Marijuana Market Slated to Continue Growth

By Cannabis Law Group

Despite numerous substantial fits and starts, California’s legal cannabis market is still an a growth trajectory. In fact, it’s anticipated that within the next five years, California sales of the crop will account for almost one-quarter of the legal marijuana sold in the country. That’s according to a new analysis by ArcView Market Research and BDS Analytics. cannabis lawyer

Voters in the Golden State agreed to legalize recreational marijuana use three years ago, and sales officially became legal at the start of last year. Prior to that, only sales for prescribed medicinal use was allowed. Although there was a great deal of anticipation about how legalization would unfold, our Los Angeles marijuana business lawyers know the transition to a legal market was rocky at best.

Despite troubles with the black market and untested regulatory rules (including rigid new testing mandates, heavy taxation and licensing that moves at a snail’s pace in some jurisdictions), the current market size is $2.5 billion, according to the analysis. Continue reading

September 16, 2019

Would Better Banking Destroy Small Marijuana Businesses?

By Cannabis Law Group

With little or no access to mainstream banking services, all but a few marijuana businesses have remained small ventures. Growth opportunities – within cities, across counties and certainly across state and international borders – are significantly curtailed by the fact that the drug remains illegal under the U.S. Controlled Substances Act. Federal money laundering statutes prohibit financial institutions from offering their services to state-legal cannabis companies so long as the drug remains – no matter how matter how implausibly – a Schedule I narcotic. marijuana business lawyers

Medical marijuana is currently legal in 33 states and 11 states allow recreational marijuana sales and possession. It’s now considered one of the fastest-growing job sources, with some more than $3 billion in projected sales in California alone (the biggest legal market anywhere in the world).

Still, lack of access to banking services has been one of the biggest sources of angst among legal marijuana business entrepreneurs. In addition to difficulty with day-to-day transactions and savings – and all the security issues that arise from being a cash-only operation – marijuana businesses have difficulty starting retirement plans for workers, obtaining insurance or federal bankruptcy protection. Continue reading

August 6, 2017

San Luis Obispo County Considers Marijuana Growth Ban in the California Valley

By Cannabis Law Group

California cannabis lawyers The legalization of recreational marijuana in California on November 9, 2016, brought a host of unexpected questions for the commercial cannabis industry. Municipal and county ordinances have created a confusing web of compliance requirements for marijuana cultivators, distributors, and dispensaries. And in some limited areas, marijuana is simply banned altogether.

County supervisors in San Luis Obispo County are considering a package of commercial cannabis regulations. Among other things, the drafted regulations prohibit the growth of marijuana in areas zoned as residential-suburban. The Tribune reports that this would include the California Valley and the entire Carrizo Plain. Limited groundwater and a high concentration of endangered species (the largest concentration in the lower forty-eight states, according to the California Department of Fish and Wildlife) are reasons given by opponents in support of banning marijuana growth in the Carrizo Plain. This does not, however, give cause for banning marijuana grows in all other residential-suburban areas of San Luis Obispo County.

August 4, 2017

What the State’s New Accela Software Means for Cannabis Business Licenses

By Cannabis Law Group

The Adult Use of Marijuana Act ensured that the State of California would begin issuing cannabis business licenses no later than January 1, 2018. The state is working feverishly to meet this deadline. Nevertheless, it is a massive undertaking which will require the coordination of hundred of employees at dozens of state agencies. These include: the Bureau of Medical Cannabis Regulation within the Department of Consumer Affairs; CalCannabis within the Department of Food and Agriculture; the Office of Medical Cannabis Regulation within the Department of Public Health; and the California Department of Technology.

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While it remains to be seen exactly when cannabis business licenses are issued, the state has taken an important step toward implementing an efficient licensing system. Government Technology reports that the state has selected software from Accela, Inc. to manage licensing for the cannabis industry. State Chief Information Officer Amy Tong says the software was chosen due to a competitive price quote, ease and flexibility of use, and its successful history within the industry and other state licensing entities. While this successful history does bode well for cannabis business licensing, it is, of course, no guarantee of success in meeting the state’s January 1 deadline. Continue reading