Can You Trademark a Cannabis Brand? ‘Stash’ Case Offers Two AnswersBen AdlinJanuary 25, 2017
That, sort of, is the conundrum facing a pair of Pacific Northwest cannabis companies. Both built their brands around the term “stash,” a familiar phrase in cannabis culture. Now, in response to legal pushback from Oregon-based Stash Tea Co., both are working to find a way forward. One retail store is adopting a new name. The other store would rather fight than switch.
Seattle’s Stash Pot Shop, for its part, will abandon the name entirely, reinventing itself this week as Lux Pot Shop. The owners of Lux made the move in response to multiple cease-and-desist letters from the Beaverton, Ore.-based tea giant.
“Is it worth it to fight? Or does it make more sense to rebrand while the company is still young?”Alison Malsbury, attorney, Harris Bricken
In Oregon, on the other hand, Stash Cannabis Co. is doubling down on its original name. Stash Cannabis is preparing to defend its brand in court after being slapped with a lawsuit by the tea company on—no joke—April 20, 2016. A trial is scheduled for late 2018.
“My feeling is, we’re different industries,” Stash Cannabis owner Chris Matthews told Willamette Week after the suit was filed. There are thousands of businesses nationwide that use the term “stash,” he told the paper. “Just because we sell pot, they think we’re hurting their brand.”
Industry observers expect such suits to become more common as the legal cannabis industry grows and becomes more mainstream. Strain names such as GSC (f.k.a Girl Scout Cookies), for example, which were once obscure enough to fly under the radar, are now catching the attention of lawmakers and inspiring cease-and-desist letters of their own.
“Business owners are going to need to get increasingly more creative in choosing their brand names,” said Alison Malsbury, a Seattle-based attorney at Harris Bricken, which counts both Lux and Stash Cannabis Co. as clients. “I expect to see a steady increase in the number of cannabis-related trademark infringement lawsuits as the industry matures.”
“How many cannabis brands have you seen that incorporate words like ‘green,’ ‘420,’ ‘cannabis,’ ‘high,’ or ‘bud?’” Malsbury said. “These words are common enough that they will cause consumer confusion, and will likely conflict with existing brands.”
Stash, the tea maker, was founded in Portland more than 40 years ago. The company trademarked its brand name in 1972. The company did not respond to messages from Leafly requesting comment on the name disputes.
For a small business owner, it’s no small thing to be asked to change something “as core as your name,” said Kc Franks, co-founder of the company now known as Lux. His shop received its first cease-and-desist letter last year, shortly after winning an industry award for best new retail store. It was a crushing blow to Franks at a time when he felt the store had only recently come into its own.
“Our initial reaction was, no, we’re not changing our name,” he told Leafly. Not only could it hurt brand-recognition, he said; it would also cost a bundle. The shop had invested a lot of money in shirts, beanies, beer coasters, ball caps, and other branded materials. “The name Stash is printed in concrete in the floor,” Franks said. “I had to pay to get that installed, now I have to pay to get that removed.”
All told, he said, “there’s tens of thousands of dollars in collateral and branded merchandise that needs to be either quickly sold or destroyed.”
How do you avoid a headache like this?
Malsbury encouraged businesses to hire an intellectual property attorney to perform due diligence before investing in building a brand. “It’s cheaper to engage an attorney before investing in brand development,” she said, “than it is to battle an infringement lawsuit down the line.”
Malsbury also advised cannabis companies to pick a brand that’s creative and unique. “Don’t incorporate words that are already prevalent in the cannabis industry,” she said. “Many of them are descriptive and not eligible for trademark protection at all.”
And there’s no one-size-fits-all solution when a cannabis business receives a cease-and-desist letter claiming infringement. “Ultimately, it comes down to a cost-benefit analysis for the company battling an infringement claim,” Malsbury said. “Is it worth it to fight? Or does it make more sense to rebrand while the company is still young?”
Most of the current threat to cannabis businesses comes from outside the industry because it’s still so difficult for cannabis businesses to secure trademarks, Malsbury said. “Federal trademarks are nearly impossible, and state trademarks provide limited protection.”
Franks, at Lux Pot Shop, also advised building a business identity that transcends a brand name. Whether called Stash or Lux, he explained, the shop has sought to be a part of the neighborhood by welcoming young artists, emerging musicians, and members of the community. And while the name might change, the rest doesn’t need to.
“Make sure that everything you’re doing isn’t based on name,” he advised. “Make sure that what’s your building is a business with core values and something you can stand by. A name is just a name.”