Kristina Etter   |   January 23, 2019

Shifting Legal Landscape for Cannabis

Attorneys urge companies to protect their assets, as a complex legal landscape could jeopardize the future for unprepared cannabis businesses.
Before becoming a freelance cannabis journalist, Kristina Etter spent 20 years in corporate IT with a niche in mobile technology. Today, she combines her love of technology with a passion for the cannabis industry as the Editorial Content…

As legalization continues to spread, laws continue to change, and navigating the shifting legal landscape in the cannabis industry can be difficult. With cannabis and hemp becoming more mainstream, business owners may be facing complex legal challenges the industry previously avoided. Intellectual property, patent laws, and branding concerns are beginning to take center stage for hemp and cannabis entities across the United States.

This week for CannabisTech, I reached out to Tom Zuber, Managing Partner at Zuber Law, as well as, Sarah Gersten, attorney and CEO of Buddle, to discuss the wave of growing legal concerns for cannabis businesses all across the nation.

Increasing Legal Demands

As the managing partner located in the Los Angeles office, Tom Zuber is intimately familiar with the legal aspects of cannabis with more than 12 years of experience working in the space. Admitting to only trying marijuana once in college, Zuber stated, “We got into cannabis as a function of social interaction.”

When his friends started their own cannabis companies, he began to see the potential of cannabis to grow from its “cult-like subculture and illegal existence into a mainstream, legitimate industry.” From the intellectual property, trademark laws, and more, the firm continued gaining cannabis industry clients, and before long, Zuber Law had built a large roster of cannabis clients.

Today, Zuber dedicates fifty percent of his 14-hour days to defending and protecting cannabis-related businesses. His advice for cannabis businesses, “The day prohibition ends, you need to be corporate with an established brand and legitimate books showing appreciating assets, patents, joint ventures, and so on.”

“Licenses are depreciating assets; the IP is the appreciating asset for the dominate players post-prohibition,” Zuber explained. Litigation is already underway with brand, trademark, and patent wars beginning to gain momentum. Zuber believes this kind of legal action within the industry is only going to accelerate as time passes.

Brand Protection is Critical

Citing the American Invents Act, Zuber reminded, “The US is a first-to-file country, meaning the first person to file the patent, wins. And cannabis companies that aren’t deliberate about protecting their innovations will lose out.”

For example, if someone invents a widget in California, and six months later, someone else invents the same widget in Florida (without stealing the technology), and the Florida inventor files for the patent first; they’ll win the rights to produce and sell the widget. Meanwhile, the original inventor could lose the right to sell their widget or even face millions of dollars in patent litigation.

Therefore, Zuber urged, “it’s critical cannabis businesses focus on protecting their brand and their intellectual property now.”

Types of Patents

The cannabis industry lends itself to patent-heavy processes and products. There are three types of patents which can significantly impact the industry:

  • Utility Patents – for equipment and processes.
  • Design Patents – like a fancy copyright.
  • Plant Patents – to protect asexual, distinctive strains of plants.

Zuber explained, “Plant genetics and cultivars, extraction processes and equipment, different methods of keeping terpenes intact, are all potentially worthy of patents. Additionally, particular formulations of cannabinoids and how they interact with human physiology, or how it works on a particular disease, that is patentable, as is a broad range of technology.”

Easing the Burden with Buddle

Sarah Gersten, formerly an attorney at the US Copyright Office, also recognized the need for legal guidance within the industry. Attending law school in Massachusetts during the introduction of the recreational bill, she worked in cannabis advocacy and social justice policy. As she watched the industry grow, she decided to start her own cannabis law firm and partnered up with her friend and colleague, Julie Saltman.

“Being a two-person firm, we needed to simplify processes for ourselves,” Gersten recalled about what led the duo to create a high-tech legal software platform for cannabis businesses, called Buddle. As a hybrid SAAS solution, Buddle automates repeatable legal processes such as trademark applications, copyright applications, and even applying for cannabis licensing. “By utilizing technology, we can provide cost-effective legal solutions with upfront pricing,” Gersten explained.

While not all processes can be completely automated, Gersten states, “We have attorneys in every jurisdiction to serve the needs of cannabis businesses at every stage of their lifecycle, while operating on a more cost-effective, lean model than most traditional firms.” Even other law firms can utilize Buddle to reduce overhead and free up their time to focus on more significant cases.

Moving into this new era of legalization, cannabis and hemp companies need to be prepared to function on a corporate level. Acquiring and maintaining the necessary legal representation and protection is an essential step for ensuring the future of your brand and your business.

 

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