In the last couple of months, a number of marijuana brands have announced their intent to license their trademarks for food and drinks, vape pens and other smoking accessories, apparel, concentrates, creams, and other closely related categories. Examples include:
- JuJu Royal Premium, founded by Julian Marley. Dropleaf holds the rights for the trademark and Marley serves as brand ambassador.
- Wana, which has created recipes for gummy candies. It is setting up licensing and distribution agreements to allow it to expand into other states.
- Tikun Olam, a cannabis provider in Israel. The company plans to introduce its Tikun brand in the U.S., with CW Nevada serving as the licensee for cannabis, edibles, creams, tinctures, etc.
- Blue Diamond Ventures. It intends to seek edibles licensing deals for its Bot Bakery brand, based on its formulations for marijuana-containing baked goods.
- MariMed, owner of the Kalm Fusion edibles brand. The firm is in the process of securing licensing partners so it can do business in states across the country.
This sort of marijuana-related brand extension differs somewhat from other forms of trademark licensing. The traditional benefits—revenue, awareness, category expansion, and the like—still apply, but they typically take a back seat to other objectives, primarily the need to overcome regulatory and legal barriers.
Because marijuana is legal only in certain states, transporting it across state lines is prohibited. Therefore, a partnership of some sort becomes a necessity.
The structure of the agreement typically differs from a traditional licensing deal, in order to create a separation between the two partners’ companies. There may be a single flat payment rather than a royalty per unit sold, for example, or the partnership may involve sales of ingredients or packaging and not a license per se. The IP owner often creates all the packaging, formulations, and recipes, and consults on the making of the product, to a much greater extent than is usual in a more standard licensor-licensee relationship in many other categories.
Although trademark licensing is involved—and traditional brand-extension licensing agreements exist in the category—the typical deal is more akin to a distribution license than the sort of licensing agreement that we typically cover here.
That said, standard trademark licensing deals are the norm when properties from outside the marijuana industry enter it, as when musicians or chefs license their names for cannabis-infused products and accessories.
We will be off on Monday due to the U.S. Memorial Day holiday; expect our next post on Thursday, June 1. Also, watch for our coverage of trends and insights from Licensing Expo, starting next week.
Comments are closed.