Café con Cannabis – California’s Cannabis Café Law and Trademark Considerations

Recent legislative changes in California have opened up exciting opportunities for cannabis lounges and retailers.  With a new law allowing on-premise consumption areas, the sale of food and drinks, and the hosting of live music events, businesses are gearing up to create unique and engaging experiences.  However, as these businesses expand and innovate, it’s crucial for all brand owners to consider the implications for trademarks in the cannabis industry.

This “cannabis café law” will allow existing cannabis retailers and consumption lounges to sell non-cannabis food and beverages and host live entertainment.  The bill goes into effect January 1, 2025.

The relatedness of cannabis and non-cannabis food and beverage goods is not newsworthy.  Indeed, consumption of the former may lead to indulgence in the latter.  But the cannabis café law could potentially lead to consumers associating a brand in the cannabis industry with one that is not.

For instance, cannabis infused baked goods could be provided at the same location as your favorite cookie brand.  Chasing your favorite soda with a cannabis infused beverage may shortly be a possibility.  After a Mission burrito for dinner, you could catch a show across the street at a cannabis café.

With the line between cannabis and non-cannabis offerings blurring more than ever, it may be difficult for business owners to distinguish themselves.  Also, it’s more important for those in the food and beverage space to consider existing cannabis brands before adoption of a trademark.

So, what are some things to mull over before the first cannabis café opens?

• Cannabis café operators should consider existing brands for restaurants, entertainment spaces, and food and beverage goods before adopting a trademark for their café.
• Non-cannabis brands should determine whether a cannabis café’s trademark encroaches on rights to their goods or services.
• Cannabis operators should evaluate their existing trademark portfolio, in particular California state registrations, and determine whether additional filings for restaurant or entertainment services are warranted.
• Irrespective of industry, those in states neighboring California should keep an eye on cannabis café brands that may conflict with their trademark rights.
• Consideration should be given to whether federal trademark rights may be provided for non-cannabis related goods and services offered by a cannabis brand.

The cannabis industry continues to evolve and converge with those operating in separate but perhaps related industries.  Ensuring that your marks are distinguishable from others in a crowded field of operators is crucial for ensuring a valuable brand.  We’ll see what happens after the smoke clears and cannabis cafés are in full swing.