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Building Cannabis IP Includes Both Your Brand and Your Technology

Federal law is no help when it comes to protecting cannabis intellectual property but there are many effective workarounds.

Opinions expressed by Entrepreneur contributors are their own.

Despite federal limitations, businesses in the cannabis industry often have important intellectual property assets, beginning with branding the company has established through marketing, but also patents, trade secrets and proprietary processes and technologies used to produce products. As with start-ups in any industry, building your intellectual property through both marketing and technology assets each has its own distinct advantages, disadvantages and challenges. If your cannabis company can overcome these challenges, your business can be well positioned for the coming “green rush.”

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While many who are part of the burgeoning cannabis industry are focused on all the business activities required to get the company off the ground while dealing with other cannabis-specific challenges such as marketing, financing and differentiations, it's also important to understand the significance of intellectual properties and the benefits it can provide. Likewise, it is very risky to ignore IP rights for any length of time, especially during your company's startup and growth periods.

Advantages of building IP through branding.

Building your trademark and copyright intellectual rights through branding will allow you to retain exclusive use of your logo, trade names or marketing content, so that no one else can make use of them, giving you the opportunity to achieve the rewards of investment in your brands through marketing efforts.

While it is not yet legal to apply for a federal trademark for your cannabis brand, you can apply for a state-level trademark which will uniquely identify your business as one that is strongly associated with specific cannabis products or services. This can be extremely advantageous for marketing purposes, because it can instantly associate a symbol with your company, and it can call to mind all the good qualities associated with your brand.

Even though federally protected trademarks are not available to cannabis growers, that does not mean you can't build your intellectual property through your branding. You can still copyright your cannabis operation because there are no restrictions against copyrighting something, even if it's considered illegal. Accordingly, you can copyright your cannabis symbols and phrases, provided they are original and show some degree of creativity, and as long as they are in a tangible form which can be reproduced. Once you register your logo and/or phrases with the U.S. Copyright Office, you will have the benefit of being able to sue any party which infringes on your copyright.

Related: California Bill Provides Trademark Protection for Marijuana Industry

Advantages of building IP through technology’s.

The major advantage of building your intellectual property through patenting your company technologies is preventing others from duplicating your processes by using the same or similar technology. Use of trade secrets requires establishing procedures to identify and protect them, but trade secrets are becoming an increasingly useful tool to protect what is unique about your business.

An additional benefit of building your intellectual rights to proprietary technologies is the ability to license those rights out to others, and generate an additional source of income. If you have developed a more efficient method of controlling the amount of light that your plants receive, or for managing the level of humidity in your grow tent, that could have wide interest among the growing community.

Another very popular and profitable area in cannabis cultivation is that of developing new strains. While some growers are specifically cultivating new strains of cannabis which contain high levels of THC, others are focusing on the level of CBD which their plants contain, so they can have the maximum medicinal effect. All the processes used in developing these new strains can become part of your intellectual property portfolio, and can be built up with the technology used to accomplish the production of the new strains.

Related: Protecting Your IP Is (No Surprise) Even Harder in the Cannabis Business

Challenges of building IP through branding and technology.

As the cannabis industry grows and becomes more mainstream, some established companies are entering the market because of the perceived potential for earning huge profits. Even Coca-Cola has made headlines with their interest in potentially expanding into cannabis. This will also increase the difficulty of building your company's intellectual property, because you probably won't have the resources to compete with these larger companies.

There are also some challenges which have to be met due to the fact that cannabis (or at least THC) is still illegal under federal law. This means that only fringe processes can be patented or trademarked, rather than any of the processes directly related to cannabis production. While state-level recognition is still an option, this does allow for a competitor to 'borrow' your intellectual property rights and use them in another state, without any legal recourse being possible on your part.