Avoiding a Bad Trip: How Cannabis Companies Can Mitigate the Risk of an Infringement Lawsuit

Over a decade has passed since recreational cannabis began to see legalization at the state level. Yet cannabis businesses continue to grapple with protecting their brands, as trademark protection at the federal level remains unavailable. The current hodgepodge of state trademark regimes will undoubtedly result in litigation and a race to register federal marks once Congress legalizes cannabis. While there is no indication that Congress intends to account for cannabis trademark issues when passing legislation to legalize recreational cannabis at the federal level, these issues will undoubtedly affect businesses’ bottom lines and result in litigation.

For instance, in the aftermath of CBD trademarks becoming legal at the federal level, CBD companies from different states that had used similar marks quickly resorted to federal trademark litigation as in CBD Industries, LLC v. Majik Medicine, LLC, 2021 WL 6198664, February 12, 2021, WDNC, (litigation over the use of “CBD MD” trademark).

As cannabis businesses continue to evolve, two issues should be at the forefront of any branding strategy:

  • Avoiding potential trademark infringement claims
  • Protecting the business’ brand through trademarks

In this post, we will discuss how to avoid infringement claims. In subsequent posts, we will discuss how a cannabis business can use trademarks for brand protection as well as how a business can implement employment agreements to further protect their intellectual property.

To register a federal trademark with the US Patent and Trademark Office (USPTO), a trademark must be “lawful” under federal law. Therefore, marks used to identify cannabis products violate federal law (as cannabis is still a controlled substance at the federal level) and cannot be federally registered. And, notably, although trademarks for hemp-derived CBD products containing no more than 0.3% tetrahydrocannabinol (“THC”) are lawful under the 2018 Farm Bill, the Food and Drug Administration (FDA) has held that it is illegal under federal law to add CBD to any food or dietary supplements.

While federal trademark protections may be unavailable to cannabis companies, these companies are still at risk for federal trademark lawsuits. Indeed, cannabis companies are increasingly under scrutiny for using famous marks, which is a common practice in the cannabis space. For example:

  • Subway IP LLC v. Budway, Cannabis & Wellness Store (cannabis mark parodying famous Subway mark)
  • Wrigley Jr. Company v. Roberto Conde, et al. (cannabis mark parodying famous marks, such as “Skittles”)
  • Robert Kirkman, LLC v. The Toking Dead (cannabis company parodying the famous “Walking Dead” television marks).

Significantly, as cannabis companies grow, they need to be mindful of the fact that a larger customer base brings more public spotlight, which makes any instances of trademark infringement easier to identify (increasing the risk of trademark litigation). It is common for a growing business to be targeted by brands looking to make a statement and enforce their marks.

Sometimes, trademark infringement lawsuits are motivated by the concept of “dilution by tarnishment.”  Dilution by tarnishment occurs when the reputation of a famous mark is harmed through association with another similar mark or trade name. However, two relatively recent Supreme Court decisions have made it possible to potentially challenge the constitutionality of the dilution provisions set forth under federal trademark law (i.e., the Lanham Act). Unsurprisingly, the owners of famous marks usually police them vigorously, and, in many instances, these owners will balk at any perceived association or endorsement between their renowned mark and a cannabis product.

Put simply, cannabis companies should consider conducting due diligence before investing in brands that play off a parody. The longer the parodied product is on the market, the higher the exposure. Thus, the duration of the lifecycle of parodied products may be one of the most critical factors for cannabis companies to consider. Proper due diligence can keep a company apprised of potential trademark infringement claims relating to their business and product lines – especially as these companies grow their business and their products become better known. Indeed, the tendency of cannabis products to reference popular culture or parody a famous mark can create serious risks of potential trademark claims. Cannabis companies should be proactive about trademark infringement risks, or they will likely end up entangled in a trademark lawsuit.

The trademark landscape in the context of recreational cannabis remains murky and riddled with pitfalls for unassuming business owners. That is why it is important to hire attorneys with trademark experience, who know the cannabis industry and how to navigate its thorny trademark issues. For any questions relating to the subject matter of this article, contact Mark Jotanovic or Kory Steen at Dickinson Wright PLLC.

Related Services

Trademarks | Cannabis 

About the Authors:

Mark Jotanovic is a member in Dickinson Wright’s Troy office. He can be reached at 248-631-2050 or MJotanovic@dickinsonwright.com. His bio can be viewed here.


Kory Steen is an attorney in Dickinson Wright’s  Detroit office. He can be reached at 313-223-3623 or KSteen@dickinsonwright.com. His bio can be viewed here.


Michigan Court of Appeals Strikes State PFAS Drinking Water Standards

On August 22, 2023, a split panel of the Michigan Court of Appeals held that the Department of Environment, Great Lakes, and Energy (EGLE) violated the Administrative Procedures Act (APA) by promulgating a new rule establishing drinking water standards for seven PFAS[1] compounds. The required regulatory impact statement (RIS) did not consider compliance costs associated with a change in cleanup standards that would automatically spring from adopting new drinking water standards.

The new rules became effective on August 3, 2020, but were promptly challenged by 3M Company. 3M claimed that EGLE had not fully accounted for the compliance costs associated with the rules, as required by the APA. While promulgated under Michigan’s safe drinking water law, Michigan’s general environmental cleanup law provides that a state drinking water criterion becomes the groundwater cleanup criterion if it is more stringent than a criterion established under the cleanup law.[2]  EGLE established groundwater cleanup criteria for two of the more well-studied PFAS compounds, PFOS and PFOA, under its cleanup law as a combined 70 parts per trillion (ppt) for drinking water. The new drinking water standards for these compounds would have lowered these criteria to 16 ppt and 8 ppt, respectively. Adopting the new drinking water standards would also establish cleanup standards for five other PFAS compounds.

In preparing the RIS, EGLE estimated the compliance costs associated with the operation of water supplies, including costs to sample for these seven PFAS compounds and to install and operate treatment systems to meet the standards in their drinking water supplies if necessary. Although recognizing that promulgation of these rules would also change the existing cleanup criteria for PFOS and PFOA, EGLE stated that it was not practical to determine the impact of that change. EGLE also did not estimate costs associated with cleanup criteria for the five other PFAS compounds, noting that these costs would already be reflected in the costs associated with the PFOS and PFOA criteria.

The Michigan Court of Appeals rejected EGLE’s arguments that (1) EGLE lacked the necessary information to estimate the cleanup costs, and (2) the Court should have deferred to EGLE’s determination that it could not estimate those costs. The Court held that the APA requires an agency to provide an estimate of the actual statewide compliance costs associated with adopting all new rules, and that difficulty in estimating those compliance costs was not a valid reason for failing to provide them. Therefore, EGLE’s failure to estimate the impact of the new drinking water rules on the costs of compliance with Michigan’s general cleanup statute was a failure to comply with its statutory obligations under the APA. The Court affirmed the underlying decision of the Court of Claims that had reached the same conclusion.

The trial court stayed the effectiveness of its decision pending the exhaustion of all appeals, so the drinking water rules remain in place while the State considers appealing to the Michigan Supreme Court. Even if this decision delays the adoption of the State’s new drinking water criteria and the establishment of cleanup standards for the five new PFAS compounds, any long-term effect on PFOS and PFOA-driven cleanups will likely be limited. EGLE has already established stringent groundwater/surface water interface (GSI) cleanup standards for these compounds of 11 ppt and 66 ppt, respectively,[3] which is the driver for many PFAS-impacted groundwater sites. EGLE is also aggressively using those standards, initially developed as discharge standards under Michigan’s water laws, to push for evaluation and remediation of stormwater discharges. Additionally, U.S. EPA has proposed federal safe drinking water standards for PFOS and PFOA at 4 ppt each, which, if adopted, would ultimately become the new drinking water and groundwater cleanup standards for PFOS and PFOA in Michigan. In the meantime, we can anticipate that EGLE will continue to identify and evaluate potential PFAS source areas throughout the State to prepare for the transition to more stringent cleanup levels in the near future.

For more information, please get in touch with one of our Energy & Sustainability or Environmental attorneys.

Related Services:

Environmental | Energy & Sustainability

About the Author:

Sharon Newlon is a Member and Environmental, Energy & Sustainability Practice Group Co-Chair in Dickinson Wright’s Detroit office. She can be reached at 313-223-3674 or snewlon@dickinsonwright.com and her firm bio can be accessed, here.


[1] PFAS refers to a group of per- and polyfluoroalkyl substances that have been widely used in firefighting foams, coatings, certain metalworking operations and numerous other commercial and consumer applications.

[2] See MCL 324.20120a(5)(a).

[3]  These are GSI standards for groundwater discharging to a drinking water source.  For discharges to a non-drinking water source, the criteria are slightly less strict at 12 ppt for PFOS and 170 ppt for PFOA.

Nevada’s Cannabis Industry Takes Another Step Forward

Four significant bills that will undoubtedly impact cannabis regulation in Nevada were recently signed into law by Nevada State Governor Joe Lombardo (R). The legislation makes a series of amendments to the state’s existing cannabis laws, including minimizing penalties and fees, reforming sales tax law, doubling the legal personal possession limit, consolidating licensing rules, and enabling participation in the market by people with prior felony convictions.

  1. SB 195 – Penalties and Fees

Effective upon adoption, SB 195 was advanced successfully by the Nevada Cannabis Association with solid backing from cannabis operators, citing the need to address certain burdensome and costly practices implemented by the Nevada Cannabis Compliance Board (the “Board”). These changes aim to alleviate economic burdens on operators and incentivize operator compliance and collaboration. Cannabis operators hope SB 195 and other changes during the session will provide more certainty and fairness in the disciplinary process. Highlights include:

  • The maximum civil penalty the Board may impose may not exceed $20,000 for a single violation. Previously, the most serious violations carried civil penalties of up to $90,000 for a single violation.
  • The Board must characterize certain conduct as a “single alleged violation” instead of multiple separate violations based on the facts and circumstances to prevent stacking violations.
  • The Board may bill only costs and charges expressly authorized by statute to an operator and eliminates the practice of “time and effort” invoicing for ongoing activities of the Board, such as routine inspections, audits, or non-application-based investigations.
  • Identifies “mitigating circumstances” the Board must consider concerning a disciplinary matter, including whether the operator self-reported the violation, the corrective action taken, history of prior good faith efforts to avoid the violation in question, and cooperation during the investigation.
  1. AB 430 – Cannabis Sales Tax

AB 430 reforms the calculation of wholesale excise tax imposed on the sale of cannabis, applying the tax to the first wholesale sale and calculating the amount of the tax as 15% of the actual sales price in an arm’s length transaction. Historically, the tax was 15% of the “fair market value” set by the Nevada Department of Taxation, with the procedure for setting the FMV criticized as flawed and resulting in an inflated value. While the “fair market value” calculated by the Nevada Department of Taxation will still be applied to affiliates’ transfers, proponents believe this change will allow for a lower and more fair wholesale tax structure.

  1. SB 277 – License Consolidation

SB 277 calls for medical and adult-use cannabis licenses to be merged into one license category (unless adult-use is not permitted by local jurisdiction) and aligns the fee structure for medical and adult-use licenses to the lower amount paid for a medical license. Additionally, the bill provides a mechanism for individuals with “excluded felony offenses” who have, up until this point, been excluded from owning, controlling, or working in a cannabis establishment to petition the Board to allow an exemption to participate in the industry. The Board may only grant such an exemption if doing so would not pose a threat to public health or safety or negatively impact the cannabis industry. Other highlights include:

  • SB 277 increases the possession limit and daily purchase limit of cannabis from 1 ounce to 2.5 ounces and doubles the limit for cannabis concentrates.
  • The fees for initial licensing and renewal of an adult-use cannabis license were reduced, except for the initial issuance of an adult-use retail license, which remains unchanged at $20,000.
  • The initial and renewal fees for other categories of adult-use licenses were reduced to mirror the medical fees. For example, the initial application fee for an adult-use cultivation establishment was reduced from $30,000 to $3,000, and the renewal fee was reduced from $10,000 to $1,000.
  1. SB 328 – Unlicensed Cannabis Activities

SB 328 requires the Board to adopt regulations providing for investigating unlicensed cannabis activities and imposing penalties against persons who engage in such activities.

Historically, Nevada’s regulated cannabis scheme has not provided the Board (or its predecessors) with any enforcement authority to address unlicensed cannabis operations, with the scope of authority extending only to licensed operators. Proponents believe this is a small but crucial first step in reducing the number of illicit operators in the Nevada marketplace and preserving market share for licensed operators.

  • SB 328 eliminates the Board’s exemption from NRS 233B, known as the Nevada Administrative Procedure Act (the “Act”).
  • The Board will now be required to submit regulations to the Legislative Counsel Bureau for formal review and revision before adopting any new regulations.
  • In contested matters, the Board will be subject to the adjudication procedures outlined in the Act, including judicial review afforded by the Act.
  • Staggers terms of Board members, limits the term of Board Chair to two years, and eliminates the Board’s authority to appoint and remove an Executive Director, with that authority now in the hands of the Governor.

Proponents of SB 328 believe these changes will improve the Board’s accountability and provide guardrails on its authority.

For more information, please get in touch with one of our Cannabis attorneys.

Related Practice Areas


About the Author

Melissa Waite is a member of the firm’s Las Vegas office. She advises clients on emerging legal issues related to marijuana establishments and ancillary marijuana businesses and regularly works with state and local agencies, monitoring new policies and changes in the law in order to help clients stay at the forefront as the cannabis industry continues to evolve. Melissa can be reached at 702-550-4435 or  MWaite@dickinsonwright.com. Visit her full bio here.

Ohio Supreme Court Unanimously Affirms Siting Board Certificate for New Wind Farm

Emerson Creek project in Huron and Erie Counties Now Expected to Move to Construction 

On July 27, 2023, the Supreme Court of Ohio, in a 7-0 decision, affirmed the Ohio Power Siting Board (“Board”)’s decision to issue a certificate for environmental compatibility and public need (“Certificate”) to construct the Emerson Creek Wind Farm, effectively authorizing Firelands Wind LLC (“Firelands”) to proceed to construct the 297-megawatt wind-generation project in Huron and Erie counties.[1] In a unanimous decision authored by Justice Pat DeWine, the Court found the Board did not act unlawfully or unreasonably when evaluating the wind farm’s application and issuing a certificate to Firelands Wind.[2]

The Court rejected all of the arguments raised by project opponents, a small group of nearby residents, and the Black Swamp Bird Observatory (“Black Swamp”). They had contended that the Board failed to determine: the project’s probable environmental impact under R.C. 4906.10(A)(2), whether the project represents the minimum adverse environmental impact R.C. 4906.10(A)(3), and whether the facility will serve the public interest, convenience, or necessity under violated R.C. 4906.10(A)(6).[3]  Project opponents alleged that the project could disrupt the area’s water supply, create excessive noise and “shadow flicker” for residents near the wind farm, and harm bald eagles and migrating birds.[4]  They also claimed that the Board improperly delegated its duties to staff and other government agencies, failed to follow administrative rules, and should have required additional testing before granting the certificate.[5] We briefly summarize key aspects of the decision below.

Standard of Review Clarified

Before evaluating arguments from the residents and Black Swamp, Justice DeWine clarified how the Court’s statutorily mandated standard of review only allows the Court to reverse, modify, or vacate the Board’s order if the Board’s conduct is either “unlawful or unreasonable.”[6]

The decision explains that the law limits the Court’s review of what qualifies as unlawful to the review of legal questions, such as whether the Board correctly interpreted a statute. It further states the Court performs this type of review de novo (i.e., without consideration for the decision of an agency or lower court) and how the court is “never required to defer to an agency’s interpretation of the law.”[7]

When reviewing what is unreasonable, the opinion explains: “The agency’s exercise of its implementation authority must fall within the zone of permissible statutory construction.”[8] As such, if the statute gives an agency a degree of discretion, which is the case for the Board when determining whether to issue certificates, the court should:

“Examine the reasonableness of an agency’s decision about such things as whether a facility represents the “minimum adverse environmental impact,” or whether it will serve the “public interest,” by looking to whether the agency’s decision falls within that zone.”[9] (Citations Omitted).

Applying this standard, the opinion rejects each of the propositions of law raised by the residents and Black Swamp.

  1. Avian Impacts

Migratory Birds:

The residents and Black Swamp argued that Firelands failed to properly determine the impact the project would have on migrating birds, particularly “passerines.”[10] The residents and Black Swamp claim that without such a study, the Board could not determine “[t]he nature of the probable environmental impact.”

The Court rejected this argument, concluding that the record contained sufficient probative evidence for the Board to determine the nature of the probable environmental impact to passerines[11]:

Firelands conducted numerous site-specific studies, including surveys relating to migrating passerines, in accordance with the ODNR protocol and the USFWS guidelines. The board also reviewed hundreds of bird studies from existing wind farms. Firelands’ witness, Good, explained why Firelands did not conduct nighttime radar studies for this project: ODNR has mapped areas of Ohio that are high-risk for nocturnal migrating passerines, and the wind farm here does not fall within such an area. As the residents and Black Swamp’s own witness, Shieldcastle, acknowledged, ODNR only recommends that wind developers conduct nighttime radar monitoring for high-risk project areas. [12]

Bald Eagles:

The residents and Black Swamp contended that because the project will impact bald eagles, the Board failed to determine that the facility represents the minimum adverse environmental impact.[13] Firelands committed to (1) developing and implementing, prior to turbine construction, an “eagle conservation plan” in accordance with USFWS guidance for wind farms; and (2) apply for an “eagle take permit” from USFWS before the facility becomes operational.[14] An eagle-take permit authorizes unintentional eagle death resulting from an otherwise lawful activity.

The Court explains that the question before the Board is whether the facility represents “the minimum adverse environmental impact, considering the state of available technology and the nature and economics of the various alternatives, and other pertinent considerations,” R.C. 4906.10(A)(3) and does not question the reasonableness of the Board’s determination. The Court concluded:

Firelands’ application represented that the project’s anticipated short- and long-term operational impacts on wildlife were expected to be minor. The application described ways in which Firelands had designed the facility to minimize or mitigate bird mortality, including siting turbines so as “to avoid bald eagle nests and areas of concentrated eagle use.” And the stipulation ensured that the wind farm would be built and operated in accordance with USFWS guidelines for protecting bald eagles. We cannot say that the board’s determination that the facility represents the minimum adverse environmental impact was unreasonable.[15]

  1. Economic Impact

The residents and Black Swamp claim that Firelands’ economic impact study was inadequate because it failed to account for potential negative economic impacts. The Court disagreed and explained the applicant met the applicable rule:

The administrative code provision did not require Firelands to specifically quantify potential losses to tourism, farmers, or other energy providers. And nothing prevented the residents and Black Swamp from submitting evidence of such potential losses. The rule required only that Firelands provide an estimate of the economic impact on local commercial and industrial activities, which it did. We find nothing unlawful about the board’s interpretation of the rule and nothing unreasonable about its determination that the project “will serve the public interest, convenience, and necessity,” R.C. 4906.10(A)(6). [16]

  1. Shadow Flicker

The residents argued that the Board failed to require Firelands to meet the shadow-flicker standard set forth in the Ohio Administrative Code.[17] The Board determined that the project would not cause adverse shadow-flicker impacts, based on (1) a requirement in the stipulation that Firelands submit a final study 30 days prior to construction showing that the shadow-flicker impacts will not exceed 30 hours per year at any nonparticipating receptor, and (2) Firelands’ ability to employ mitigating measures to maintain shadow flicker within the permissible limit.[18] The residents contended that because Firelands’ study did not show compliance with the administrative-rule shadow-flicker standard, the Board should not have approved the project.

The residents argued that allowing Firelands to submit a post-certification study violates their right to participate in the review process and divests the board of its nondelegable duty under R.C. 4906.10(A) to make required findings. [19] The Court disagreed, stating the applicable administrative rule requires only that an applicant design the facility “to avoid unreasonable adverse shadow flicker effect” and that “the facility * * * be operated so that shadow flicker levels do not exceed thirty hours per year at any” nonparticipating receptor. (Emphasis added).”[20] Thus, the Court concluded the Board acted lawfully when it conditioned its approval on Firelands’ submission of a study showing that the shadow-flicker requirements would be met.

  1. Sound

The residents argued the sound assessment was unlawful and failed to comply with Ohio Adm.Code 4906-4-09(F)(2), which establishes the maximum increase in nighttime average sound levels for areas surrounding the project. The residents contended the sound assessment did not comply with the rule since two sound monitors (out of nine) were installed just outside of the project area and were not representative of the sound level in the project area

The Court disagreed. After interpreting Ohio Adm.Code 4906-4-09(F)(2) and pointing out the rule does not specify how to calculate nighttime average sound levels, the Court found the Board did not act unlawfully since the rule did not require the Board to adopt a specific methodology for performing sound assessments.[21]

  1. Evaluation of Impact on Water Supplies

The residents argued that Board erred by failing to require Firelands to conduct a hydrogeological study at each turbine site rather than the geotechnical survey provided in support of the application. The Court, looking to the language of the administrative rule and the geotechnical report provided in the application determined that the residents failed to show that the Board violated its obligations to determine the nature of the probable environmental impact of the project and that the facility represents the minimum adverse environmental impact under R.C. 4906.10(A)(2) and (3).

Dickinson Wright attorneys Christine M.T. Pirik, Matt McDonnell, Terrence O’Donnell, and Jon Secrest represented Firelands Wind through the siting and litigation phases of the project. Jon delivered oral argument at the Ohio Supreme Court for the firm’s client.

For more information, please contact the following attorneys:


[1] In re Application of Firelands Wind, L.L.C, Slip Opinion No. 2023-Ohio-2555; Justice Patrick R. DeWine authored the opinion with Justices Sharon L. Kennedy, Patrick F. Fischer, Michael P. Donnelly, Melody Stewart, Jennifer Brunner, and Joseph T. Deters concurring. Firelands Wind was also supported by amicus briefs from the Ohio Environmental Council and the Ohio Chamber of Commerce.
[2] Id at ¶ 3.
[3] Id at ¶ 9
[4]  Id at ¶ 2.
[5] Id at ¶ 2.
[6] Id at ¶ 11.
[7] Id. at ¶ 13; Quoting TWISM Ents, L.L.C. v. State Bd. of Registration for Professional Engineers & Surveyors, 2022-Ohio-4677.
[8] Id. at ¶ 15.
[9] Id.
[10] Passerines are a wide variety of small birds, mostly songbirds. See Id at ¶ 47.
[11] Id. at ¶ 52.
[12] Id. at ¶ 52.
[13] Id. at ¶ 59.
[14] Id. at ¶ 60.
[15] Id. at 68.
[16] Id. at 58.
[17] “Shadow flicker” refers to the moving shadows that a wind turbine casts on a building when the turbine is between the sun and the structure.
[18] Id. at 42.
[19] Id. at 48.
[20] Id. at 33.
[21] Id. at ¶ 37.