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The Growing Concerns of Marijuana Producers

The future of pot’s intellectual property rights in California

Recreational marijuana is a huge industry, and—as more states legalize—it’s only getting larger.  According to Richard H. Close, a cannabis attorney in Santa Monica, it is projected that this is a $50 billion per-year industry in 2018, and even leveraging a small amount of that industry could pay off handsomely for any investors. On Jan. 1, 2018, most of California was opened to recreational sales of marijuana, subject to local regulation and approval.

The growers of marijuana have become fairly sophisticated over the past few decades, growing specific strains and potencies that allow for various consumer experiences. The work of these growers has been illegal; but, now that recreational marijuana is legal, these pot pioneers must be protected from hostile business practices. 

What does the law say?

There are various ways to protect intellectual creations. The most applicable to the current state of the marijuana industry are patents, trade secrets and public domain protections.

  • A patent is largely a defense mechanism for any new invention, or piece of intellectual property, that has been created. It creates a property right, much like the title one has on a car. If someone attempts to steal or use the idea without your consent, you have the ability to enforce your property rights. 
  • Trade secrets are formulas, patterns, compilations, programs, devices, methods, techniques or processes that derive economic value from not being readily ascertainable. For example, the Coca-Cola formula is a trade secret.
  • A public domain protection is the reverse of a trade secret; all of the possible intellectual property becomes public information to prevent others from exercising an exclusive property claim to the information.

What is happening now?

The growth of recreational sales has been a bit slower than expected in California, as cities didn’t get up to speed on regulations quickly enough to make the deadline. “Recreational marijuana is a highly politicized issue with dense legal implications and cities can exercise power of the situation,” says Close. “Lawyers will necessarily be involved in the future of this industry. For anyone entering this market they will have issues with land use permits, labor laws, financing, banking and intellectual property to name a few.”

There is a concern that big pharmaceutical companies, or big tobacco corporations, will step into the markets and push little growers out. The moves that pharmaceutical companies are making seem contradictory, however.

In August 2015, a strain of marijuana was patented by a group of craft growers. On March 7, 2017, the first patent for an “apparatus and methods for biosynthetic production of cannabinoids” was granted by the United States. There have been a number of patents filed over strains of marijuana, and currently there are about 500 active cannabis-related patents.

If one has a new strain of cannabis, consult with an experienced intellectual property attorney who can refer you to an experienced cannabis attorney. With all of the possible legal implications of entering a market that the federal government still holds as illegal, it is essential that one protects their creations and freedoms in every possible way they can.

For more information on this area of law, see our overview of cannabis law.

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