NZ – Cannabis Legalisation and Overlap with Trade Marks – Lexology

Recreational Cannabis Legalisation

On 1 May 2020, The New Zealand Government released the exposure draft of the proposed Cannabis Legalisation and Control Bill (the Bill).

The Bill [full copy can be found here] sets out a way for the Government to control and regulate cannabis. This regulatory model covers how people can produce, supply, or consume cannabis. The Bill’s main purpose is to reduce cannabis-related harm to individuals, families/whānau and communities.

The next step is a referendum at the General Election in September.  The question is whether the recreational use of cannabis should become legal. If more than 50% of people vote ‘Yes’ in the referendum, recreational cannabis wouldn’t become legal straight away. After the election, the incoming Government can introduce a Bill to Parliament that would legalise and control cannabis. This process would include the opportunity for the public to share their thoughts and ideas on how the law might work.

If more than 50% of people vote ‘No’ in the referendum, recreational cannabis would remain illegal, as is the current law.

Medicinal cannabis and hemp will not be affected by the outcome of the referendum. Medicinal use of cannabis will still be allowed if prescribed by a doctor, and hemp will still be legal.

The Bill would allow people to possess and consume cannabis in limited circumstances.

  • A person aged 20 or over would be able to:
  • buy up to 14 grams of dried cannabis (or its equivalent) per day only from licensed outlets
  • enter licensed premises where cannabis is sold or consumed
  • consume cannabis on private property or at a licensed premise
  • grow up to 2 plants, with a maximum of 4 plants per household
  • share up to 14 grams of dried cannabis (or its equivalent) with another person aged 20 or over

The proposed Bill provides a structure around:

  • how the cannabis market would work and the phased introduction of cannabis starting with fresh and dried cannabis, cannabis plants and seeds
  • how the regulation of consumption premises would work
  • the approvals process for cannabinoid (CBD) products and which products would be prohibited
  • the licensing requirements
  • how the bill proposed to reduce young people’s exposure to cannabis; and
  • infringement penalties.

Overlap with Trade Marks

The recreational use of cannabis has been legalised in many overseas countries, including Canada, and 11 states of the United States.  This has seen the creation of a new market segment resulting in several different industries creating intellectual property around the sale of cannabis and CBD related products.

From a review of the Intellectual Property Office of New Zealand (IPONZ) Trade Marks Register there are already approximately 180 pending or registered trade marks which include “cannabis” as part of the goods claimed.

The Bill touches on a few points of Intellectual Property, but it is likely these will be updated during the select committee stages (should the Bill get to that stage).

Licensing

What is interesting from an IP perspective is that under the Bill all aspects of the supply chain for cannabis will be regulated.  The main points being:

  • Everyone involved in applying for a licence would be assessed for suitability; and
  • There would be a cap on production to limit how much cannabis would be for sale; and
  • Potency limits and quality standards would apply.

Trade Marks

Trade marks are defined in the Bill as:

Trade mark includes any trade mark whether or not it is registered or registrable as such under the Trade Marks Act 2002; and also includes-

(a) Any brand name;

(b) Any company name, where that name is used for advertising or promotional purposes.

(c) Any name, word, or mark that so resembles any trade mark that it is likely to be taken as, or confused with, that trade mark

Owners of Cannabis product trade marks will have very limited rights around their use, in the same way that trade marks for tobacco products are restricted in New Zealand.

Advertising:

Advertising, promoting and sponsoring cannabis products and cannabis businesses would be banned in New Zealand (this does not include medicinal cannabis) however, businesses would be able to label products with their company name.

There is an exemption for media from outside of New Zealand, unless the media is mainly intended to promote use of cannabis products; primarily targeted at the New Zealand market; or for advertising included with radio  and television media, if the included advertising is primarily targeted at the New Zealand market

Advertisements are defined as including any words promoting use or sale of cannabis products, as well as product placement and covers advertisements in any media, including visual media and trade journals.

There are various exemptions to this prohibition such as price lists provided to retailers ( if they include the required health messages), internal publications for cannabis manufacturers, museum or art gallery exhibitions, film video or sounds recordings which were made before a “set date” where the reference to, or depiction of a cannabis product trade mark is only incidental.”

A cannabis product trade mark can also be advertised in a film, video or sound recording where it is only an incidental part of that film, video recording, or sound recording.

Packaging requirements

Following in the footsteps of the tobacco industry packaging requirements will be developed such as plain packaging with health warnings to discourage cannabis consumption.

Although trade marks have large restrictions around advertising, similar to overseas markets, this has not stopped the creation of a multiple range of associated market segments that are continuing to grow, despite the restrictions around advertising.

It will be interesting to see the outcome of the referendum and if the vote is in favour of the Cannabis Legalisation and Control Bill ( making use of cannabis legal), what the incoming Government introduce as a Bill to Parliament, as the process would include further opportunity for the public to share their thoughts and ideas on how the law might work.