Cannabis companies are often unclear about what edible products are legal to manufacture and distribute. While some cannabis edibles may be legal on a state level, federal regulations prohibit placing some cannabinoids in food altogether. This legal landscape is often confusing for cannabis edibles manufactures, who see their products as a natural expansion of cannabis legalization. However, violations of federal law are currently the least of their concerns. While federal agencies seldom take strong action against cannabis companies these days, confectionary manufacturers are not afraid to sue in federal court when their brands are threatened. In fact, the intersection of cannabis legalization and the confectionery industry has sparked a wave of legal disputes in recent years. Let’s take a look at a few of them below.
Ferrara Candy Company
Ferrara Candy Company is known for its iconic candy brands, including NERDS candy. Ferrara is committed to its brand integrity. Faced with a booming market for cannabis infused edibles that have the look and feel of its successful children’s treats, Ferrara is stepping up its legal efforts to stop these cannabis brands from imitating its products. Ferrara has been sending cease and desist letters to cannabis companies, and taking legal action against those that ignore their demands.
In 2022, Ferrara successfully obtained a permanent injunction against Higharchy, LLC for trademark infringement. Higharcy, a cannabis retailer and manufacturer, was selling cannabis infused edibles that mimicked the logo and trade dress of Ferrara’s popular NERDS candy. Similarly, back in 2021, Ferrara successfully enjoined another cannabis manufacturer in California, Tops Cannabis, who had developed a “Medicated Nerds Rope.” In still another case, Ferrara brought an action against HC, LLC, that was selling cannabis infused gummies in packaging that mimicked Runts, Trolli, and Nerds. Ferrara succeeded in that case as well. Finally, Ferrara brought an action against Akimov, LLC, another maker of cannabis infused candies. In that case Ferrara’s claims included, among other things, trade dress infringement.
It’s important to note that Ferrara has a right under the Lanham Act to protect its trade dress. Trade dress is the overall look and feel of a product that creates for consumers an association with a particular brand source. In the realm of cannabis edibles, this means that cannabis candies with a similar shape and appearance to other popular treats could be infringing that other product’s trade dress. Claims for trade dress infringement are pivotal to the enforcement actions that Ferrara and others have recently taken.
Also central to Ferrara’s concerns are cannabis products that appeal to children. Many states’ regulatory and statutory frameworks place prohibitions on advertisements and labeling that appeal to children. However, it is not always clear what is considered appealing to children versus those inherently fun products that appeal to everyone. Cannabis companies currently lack clear guidance on how to develop attractive products while avoiding the ire of children’s safety advocates and renowned national brands.
Hershey and Mars
Ferrara is not the only company taking action against cannabis companies, with Hershey Co. and Mars Inc’s Wrigley also filing successful lawsuits. In one of them, three online cannabis retailers were ordered to “deliver up and destroy all infringing products and packaging,” and also pay various sums for infringing upon Mars’s trademark. The judge observed:
I also find that advertising and offering for sale of a potentially dangerous product using appropriated trademarks that are evidently and obviously attractive to children represents a marked departure from ordinary standards of decent behaviour that deserves to be denounced and deterred…. I have placed significant weight on the issue of harm not only to the Plaintiff but also to members of the public who might accidentally consume the Defendants’ Infringing Product believing it to be a genuine SKITTLES product. The fact that SKITTLES are a confectionary product that are attractive to children reinforces the need to denounce the Defendants’ conduct.”
As with Ferrara, these lawsuits underscore the complexities and legal challenges surrounding the intersection of cannabis legalization and the enforcement of intellectual property rights.
Lessons from the confectionary industry litigation
The presence of these lawsuits should be as much a guide for cannabis manufacturers as the regulatory framework that has been adopted by the states that have legalized its sale. Cannabis companies must weigh the risks of developing fun products that appeal to our younger selves with the daunting prospect of litigation and regulatory action. Often, the costs of litigation far outweigh the financial benefits of creating and distributing such brands in the first place. And making an infringing product does not make business sense.
It is now safe to say that paying homage to other popular children’s candy with reminiscent styles carries significant risk. Anyone seeking to develop new edible products should first consult with a trademark attorney to make certain those products will not bring legal exposure down the road. And any company that receives a cease-and-desist letter from these confectionary companies should take them seriously. Successful negotiations inviting prompt settlements are often the best way to avoid being brought into court. Ignoring them is never recommended.
Finally, while these hurdles are real, they don’t have to take the fun out of cannabis. There is plenty of room in the market for creative and exciting new products. And no matter what shape edibles take, consumers are loving them.
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