Recreational cannabis became legal in Canada under the Canadian Cannabis Act on October 17, 2018 and sales have begun. Prior thereto, only medical marijuana was available in Canada.
The Canadian Trademarks Act has not been amended in any way in respect of the sale and promotion of recreational cannabis in Canada. The law regarding registration remains the same for marks for such cannabis products and services, as for other products and services. Many companies have filed trademark applications for trademarks for use in association with recreational cannabis products and services. They are moving through the usual application process.
When the changes to the Canadian Trademarks Act are implemented in 2019, the definition of a trademark will be changed to:
““trademark” means
(a) A sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others.
…
“sign” includes a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packing goods, a sound, a scent, a taste, a texture and the positioning of a sign.
The definition of “sign” is broad enough to protect some interesting marks for recreational cannabis products and services. However, the Canadian Cannabis Act has set out major prohibitions on branding on the cannabis package itself and for the promotion of those products and services. The reason for this is that the legislation wants to clamp down on glamorizing or normalizing cannabis use.
The Cannabis Act limits the brands and the size of the brands that can be displayed on the cannabis packaging.
In accordance with Section 17 (1) of the Act, it is prohibited to promote cannabis, including
(a) by communicating information about its price or distribution;
(b) by doing so in a manner that there are reasonable grounds to believe could be appealing to young persons;
(c) by means of a testimonial or endorsement, however displayed or communicated;
(d) by means of the depiction of a person, character or animal, whether real or fictional; or
(e) by presenting it or any of its brand elements in a manner that associates it or the brand element with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.
In addition to the above, it is also prohibited to promote cannabis by sponsorship of a person, entity, event, activity or facility (brand name or name of a cannabis producer, seller or distributor or service provider). As well, pursuant to 18 (1) of the Act, it is prohibited to promote cannabis in a manner that is false, misleading or deceptive or that is likely to create an erroneous impression about its characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks.
There are certain exceptions to these prohibitions but not many and those are not broad. Basically, a cannabis producer can sell its products but cannot market them to any large degree. Retailers can advertise availability and price of the cannabis products at the point of sale.
As one example, a person may promote cannabis by displaying a brand element of cannabis on a thing that is not cannabis, other than
(a) a thing that is associated with young persons;
(b) a thing that there are reasonable grounds to believe could be appealing to young persons; or
(c) a thing that is associated with a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.
Therefore, even putting a brand or a statement on a t-shirt could be prohibited. Such a brand or statement could fall within the definition of promotion in the Act and could be viewed as illegal promotion. This could make people selling or making such products subject to seizure, fines and prosecution. This is a risk, under the Cannabis Act, since there is much open to interpretation.
The mere possibility of illegality could affect behaviour in the cannabis business. There will be problems depending on how the Cannabis Act is interpreted. There may be litigation dealing with the interpretation of the Act.
For those contemplating the sale of cannabis in Canada, make sure that you are aware of the prohibitions on the branding of cannabis and on the promotion of cannabis. These can affect the business of cannabis in Canada. As well, the legal consequences can be severe.