Cannabis: In Focus

• Candy Companies Defend Their Trademarks, Consider THC Copycat Products a Health Hazard
• Iowa Supreme Court Upholds Possession Conviction, Even With Out-of-State Registry Card

Candy Companies Defend Their Trademarks, Consider THC Copycat Products a Health Hazard

On May 23, the Ferrara Candy Company filed suit in Florida against a cannabis company for improper use of trademarks held by Ferrara, including NERDS and TROLLI. This marks the latest action in the growing trend of companies fighting back against unlawful use of their registered trademarks on THC-infused edibles and follows a recent FDA warning regarding the accidental ingestion of THC products.

Trademark Protections 

In the last year, Ferrara has won two suits for trademark violations against cannabis companies. Two other candy companies also filed suits against cannabis companies for unauthorized use of registered trademarks on look-alike products.

In addition to this litigation, the Consumer Brands Association, several consumer packaged goods companies, and trade associations sent a letter in April urging Congress to address what they called the “unscrupulous use of famous brand logos, characters, trademarks and trade dress” on THC-infused edible products. The letter urged Congress to include “famous” marks within the ambit of the SHOP SAFE Act, a bill addressing counterfeit goods sold online.

Consumer Safety

Accidental ingestion of cannabis through look-alike products is a growing concern that is being monitored at the federal level. In its complaint, Ferrara noted that the challenged look-alike candies have “more than 60 adult servings” of THC, which it considers a health hazard.

Regulators and companies are increasingly concerned about the danger to children who see familiar packaging and are not aware that the product contains psychoactive compounds. For example, a third grader in California last month brought candies to school that, unknown to the student, contained THC. After the candies were shared with fellow students, three children required hospitalization.

The FDA has issued warnings related to accidental ingestion of THC and is working with federal and state partners to monitor this issue. The agency further advises consumers and health professionals to report complaints and cases of accidental ingestion to its MedWatch Safety Information and Adverse Event Reporting Program.

Iowa Supreme Court Upholds Possession Conviction, Even With Out-of-State Registry Card

On May 27, the Iowa Supreme Court upheld the conviction of a motorist for possession of cannabis by a narrow 4-3 decision. The motorist, pulled over for speeding, admitted to having cannabis in her car, but claimed it was legal because she had a medical cannabis registry card from another state. 

The court’s decision rested on whether the out-of-state registry card was a “valid prescription or order” from a healthcare provider. In Iowa, possession of a controlled substance is illegal unless an individual has such a “prescription or order.” Iowa mirrors federal law in considering cannabis a Schedule I controlled substance.

The state supreme court held that the out-of-state registry card did not constitute a “valid prescription or order” from a healthcare provider. To get the card, the motorist had to obtain a written certification from a physician stating that the individual “is likely to receive therapeutic or palliative benefit from the medical use” of cannabis. Reviewing federal and Iowa law, the majority ultimately held that the card or this written certification did not constitute a “prescription or order” in the state.

Noting that the statutes were ambiguous, the court also held that even if the card were a “prescription or order,” it was not valid. The majority wrote that cannabis, as a Schedule I substance, “cannot be validly prescribed or ordered” in Iowa. Such a holding is somewhat surprising given the state’s medical use cannabis program, which provides access to cannabis for patients with certain medical conditions.

The decision is an important reminder of the patchwork of inconsistent state laws that have developed in the absence of a federal regulatory system. It is also a reminder that traveling across federal and state lines with state-legal cannabis can pose significant risks.