Canada: Waiting To Inhale - Will Cannabis Branding Go Up In Smoke? Canada Consults On Packaging Limitations For Cannabis Products

Last Updated: December 6 2017
Article by Cynthia Rowden

The Canadian Government has committed to legalize and regulate the sale of cannabis products by July 1, 2018. In anticipation, there has been an explosion of trademark filings covering cannabis and marijuana-related goods and services. Unlike the United States Patent and Trademark Office, which will not accept trademark applications for cannabis and marijuana, per se, since the sale of such goods is unlawful under Federal laws (despite legalized sales in some states), the Canadian Trademarks Office now accepts applications for a variety of drug-related goods and services.

Currently, more than 1260 trademark applications have been filed for marijuana, cannabis and their derivatives, accessories for use, and related skin care products, foods and promotional merchandise. Most applications are based on "proposed use" grounds, in anticipation of sales in 2018. The number of annual filings has grown from just over 100 in 2015 to nearly 700, so far, in 2017.  Several companies have already filed more than a hundred applications. To date, only about 150 such marks are registered, most for medical marijuana, which is already legalized in Canada. 

As the date for further legalization of cannabis and marijuana gets closer, it is expected that even more trademark applications will be filed. However, for those in the industry, care should be taken to select and file marks that may be lawfully used, since the Government has clearly signaled that it intends to control all aspects of promotion and sale of legalized cannabis products, including the use of brand elements such as trademarks and trade dress.

Legislation permitting sale of cannabis and related goods and accessories is found in Bill C-45, the Cannabis Act, which is still in draft stage. (See our firm's article on the proposed legislation here.)   On November 21st, the Government issued a document entitled "Proposed Approach to the Regulation of Cannabis" ("Consultation Document"), designed to encourage a broad consultation on implementing regulations covering licensing for growing and selling, security clearances, and tracking of cannabis, as well as the production and sale of cannabis and related health and cosmetics products. Both the draft Act and Consultation Document contain indications of the Government's willingness to specifically regulate brand usage on cannabis and related products.

As currently drafted, the Cannabis Act generally prohibits packaging and labelling not in compliance with the Regulations.  It also specifically limits packaging (as well as displaying and selling) that:  

- appeals to young persons;

- displays or communicates a testimonial or endorsement;

- depicts a person, character or animal, whether real or fictitious;

- evokes a positive or negative emotion about or image of a way of life (e.g., glamour, recreation, excitement, vitality, risk or daring); or

- contains false, misleading or deceptive information about characteristics, including potency, health effects, strength or composition.

The Consultation Document is designed to elicit comments before issuance of the Regulations. Included are suggestions for packaging to apply to all cannabis products (whether for medical or recreational purposes), including basic identification information, storage conditions and health warnings, as well as the use of a standard cannabis symbol.  However, the Consultation Document also raises the potential for limitations on brand elements, including not only what might appear, but also colour, font, size and placement on packaging. No details are provided – simply the suggestion that "potential measures may include" such limitations. In addition, it is noted that "text and graphics used in brand elements could not be appealing to youth" and that "Health Canada is also considering establishing standards (such as limiting use of colour and size) of these brand elements". 

"Brand elements" is a defined term (Cannabis Act, s. 2 (1)), and includes brand names, trademarks, tradenames, distinguishing guises, logos, graphic arrangements, designs or slogans associated with cannabis and cannabis accessories or services. Essentially, a brand element would include any and all aspects of branding used by companies to distinguish their respective goods/services and by customers to identify and select the products they wish to purchase.

Trademarks already filed in Canada for cannabis products include those suggestive of origin, results, and impact, and often use slang or popular terms for drugs or results. Many include images, not only related to plants and leaves, but also mountains and sunbursts. A few show representations of persons, presumably fictional, or show design elements in words, such as punctuation and fanciful typestyle.  Geographic connotations to British Columbia are popular, presumably reflecting western Canada's laid back image. All such marks could fall under scrutiny, depending on the final terms of the Regulations. 

At first glance, the branding restrictions mentioned in the Consultation Document seem to be borrowed from plain packaging limitations that may apply to tobacco products, where the clear goal is to deter use of the product itself.  A stated focus of the Cannabis Act packaging controls is to "curtail the appeal of products to youth".  A wholesale elimination of ordinary branding indicia does not seem necessary to do that, particularly given the other regulatory controls on access to cannabis.

Press coverage since the release of the Consultation Document has focused on whether the intent is to implement "plain packaging" regulations for cannabis. So far, Government spokespersons have deflected that suggestion by focusing on limitations to font and colour, and have not addressed the potential for broader restrictions on branding elements. However, it is certainly conceivable that regulations could be implemented that curtail the use of certain brand elements, and restrict the appearance of others in terms of font, size and colour, which would be equivalent to plain packaging guidelines that have already been adopted for tobacco products in other jurisdictions. 

Interested parties are invited to comment on the proposals in the Consultation Document, and specifically to respond to open-ended questions such as "what do you think about the proposed rules for the packaging and labelling of cannabis products".  Right now, no specific rules have been proposed – just the potential for limitations.  The specifics of such limitations will be key.  Presumably most consumers will agree that there should be some limits on what may appear on packaging, and normal rules regarding false, misleading or deceptive content should apply. The amount of space on cannabis product labels for display of brand elements will also likely be curtailed by health and safety messages. Will the end result resemble tobacco plain packaging?

Comments on the proposals and suggestions set out in the Cannabis Act Consultation Document can be made until January 20, 2018. Specific questions are posed and responses can be sent to cannabis@canada.ca or to the Cannabis Legalization and Regulation Secretariat.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Cynthia Rowden
 
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