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Brands Demand Crackdown on Unlicensed Cannabis Operators

A coalition of corporations and trade groups sent a letter to Congress demanding a crackdown on unlicensed cannabis operators and also the various platforms that allow the sale of infused “parody brands.”

“The use of these famous marks is clearly without the approval of the brand owners. The mimickry of food products has created serious health and safety risks for consumers, particularly children. Often children cannot tell the difference between these brands’ true products and copycat THC products. [These brands] leverage the brand’s fame for profit,” their letter says.

The coalition wants Congress to target online commerce platforms with unlicensed cannabis parody brands to hold them liable.

“While law enforcement focuses on addressing illegal sales, this unscrupulous practice has also pointed out a gap in existing law. The widespread online sale of packaging that leverages these famous brands,” the letter said.

According to the Consumer Brand Association, “a recent NYU study looked at just how closely some THC products mimic an original brand product. The study found that out of the photos of edibles sent in by consumers, 22 of them “closely resembled” 13 very common snack food brands. As many as eight used the same brand name and seven even copied the brand mascot.”

The letter was from Pepsi, Kellogg, General Mills, other large corporations, and several industry trade organizations. They are advocating for the passage of the SHOP SAFE Act to address the issue.

Cannabis Edibles Packaging & “Parody” Brands

U.S. House Judiciary Committee Chair Jerry Nadler (D-NY-10) has introduced H.R. 5347, the SHOPE SAFE Act. This would also hold electronic platforms liable for unlicensed weed companies’ parody brands. The bill has bipartisan support in the House. Congressmen Darrell Issa (R-CA-50) and Ben Cline (R-VA-6), along with Hank Johnson (D-GA-4) all serving as co-sponsors. It passed the Judiciary Committee 30-8 last September. There has been no action since.

Senator Christopher Coons (D-DE) introduced S. 1843 as a companion bill in the U.S. Senate, where it was referred to the Judiciary Committee last May, where it remains. Senator Tom Tillis (R-NC) is co-sponsoring Coons’ bill.

Bills with minimal sponsorship are usually not passed by Congress and signed into law. This is especially true before a new session of Congress begins after the elections.

California Attorney General Ron Bonta (D) has sought to address the problem. He noted the products are often stronger than those sold in the state-licensed adult-use weed markets.

Companies are using the largely unregulated Delta-8 THC to infuse into parody products. It is uncertain how much actual THC Delta 9 might actually be in unregulated cannabis edibles.

The Unlicensed Cannabis Market

The unlicensed pot industry in California has long grown and processed its crops into knockoff marketing. They ship their products across the United States to other unlicensed cannabis operators to sell. Thus, unlicensed cannabis parody goods are easy to obtain in New Jersey’s unlicensed adult-use cannabis market.

Many New Jersey cannabis policymakers and experts note that the state’s unlicensed weed market is very large. They speculate the black market is far larger than New Jersey’s licensed cannabis market. This is true in many states. Unlicensed shops run rampant in California, where the unlicensed cannabis companies. Sometimes, the branding in these stores also includes label warnings. Often, consumers will find Certificates of Analysis (COAs) detailing the cannabis in the product, mimicking licensed companies.

The New Jersey cannabis referendum implementation legislation (CREAMMA) outlined a path for unlicensed pot industry operators to obtain a legal cannabis license. But it still remains to be seen whether any towns will allow them to operate within their borders.

The NJ Cannabis Regulatory Cannabis Commission (NJCRC), in its interim rules, sought to lower barriers to entry. However, towns might ignore that. Many prefer adult-use cannabis licenses go to respectable, well-capitalized corporations from out of state experienced in hiring lawyers to move through the red tape and ultimately make money.

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