Episode 55: Proactive Legal Planning for Cannabis Marketers

Lisa Buffo  00:12

Hi everybody. Welcome to today’s podcast episode of Party like a marketer, the podcast dedicated to cannabis marketing, public relations and authentic storytelling. I’m your host Lisa buffo, the founder and CEO of cannabis Marketing Association. CMA is the producer of this podcast and the guests here are our members. If you are a cannabis marketer or looking to join the cannabis industry and get into a marketing position, consider joining the CMA membership where we provide education, best practices and community and events for cannabis marketers. Our goal is to help marketers do their nine to five jobs better in this unique and challenging and growing space. And the podcast is one way in which we can reach all of you. But we also have more resources within the membership, including our Slack channel, our regular webinars and events that we host as well as Downloadables and more content and information in our online member portal. Today’s guest is Jay Kotzker. Jay is a managing partner at Holon law partners. Jay possesses 20 years of legal experience in all areas of intellectual property in general business law, including brand development and protection, entity formation, contract negotiation and drafting and guiding clients through cannabis business, licensing and operational matters. Jay routinely interfaces with governmental agencies and has extensive experience in regulatory compliance, risk management and training and dispute resolution. Jay, thank you so much for being here today.

Jay Kotzker  01:46

Thanks so much, Lisa. I’m excited to be here. Yes. So

Lisa Buffo  01:50

tell our audience a little bit about who you are, what you do your background and how you got into cannabis?

Jay Kotzker  01:56

Absolutely. So I’m based here in Denver, I’ve been here for 18 years, I’ve been a practicing attorney for a little over 20. And my primary focus during that time has been in intellectual property. So primarily trademarks, and copyrights and trade secrets. Ultimately, that was how I was brought into the cannabis space. Well, over a decade ago, prior to any adult use, I was working with a couple of medical operators who wanted a little more sophisticated brand. And you know, they wanted something other than a pot leaf, or a Green Cross in their window, they wanted something that could convey some sort of sophistication, or some sort of elevated class, other than, you know, what had been typically seen in the industry up to that point. So I just kind of stumbled into it from a brand perspective, which is really opportunity for, you know, this group here and, and the Marketing Association as a whole and a lot that allowed me to kind of start seeing what was going on on the grassroots level, especially for medical operators. And through that time, I learned that there weren’t a lot of attorneys working in this space. And the ones who were more criminal, defense, DUI possession type attorneys, they didn’t have a lot of transactional knowledge, they didn’t have a lot of regulatory compliance knowledge. And they certainly didn’t have a lot of intellectual property knowledge, all of which was very applicable to operators at the time. So that allowed me to kind of slide into a space that was underserved or not served at all, and really started working with medical operators as they transition into the recreational market. That allowed me to to get seven of the very first 11 recreational dispensary license in the world on behalf of clients here in Colorado, as well as the very first one ever. So you know, been in the space for a really long time. That allowed me to transition as the into a general counsel role, where as you can imagine, I was exposed to a lot more on the cannabis side of things that I ever dreamed through, you know, license expansion and real estate issues, and contractual matters, and mergers and acquisitions. Bringing a company public, which is a very exciting thing, as well as allowing them to kind of explore what it really was like to be one of the very first multi state operators and what the legal implications of something like that were especially very early on and in adult use, that has allowed me to, you know, really acquire a lot of knowledge about the industry as a whole, I still very much remain, you know, at the forefront of the branding part of things and the marketing part of things. I love working with larger brands and helping them create strategies to bring those products and bringing those brands to emerging markets to enter into partnership or licensing agreements with operators who are starting in different jurisdictions, as well as provide more just general business guidance and you know, valuations and strategies for expansion to operators all over the country. I’m currently the managing partner As you said, Hold on law partners. We’ve got 12 attorneys spread out around the United States, a number of different practice groups within the firm. One of them is IP and sports and entertainment, of which I’m the chair of that practice group. We also have a very, very robust cannabis practice group made up of seven different attorneys that have everything from real estate expertise to mergers and acquisitions to securities, to folks that have worked, you know, in house, you know, Cresco, labs and others. So they know, you know, large application writing processes, regulatory compliance, and, you know, basically jurisdictional specific counseling and guidance that we provide all over the country to operators.

Lisa Buffo  05:46

Awesome, thank you for that background. And we’re so excited to have a lawyer on the show, because that’s something marketers have lots of questions about all the things you talked about compliance licensing IP trademark. So I’m excited to talk about all that with you. But I do want to kick off and get started with the rescheduling discussion. I know you and I have talked about it. And something I’ve talked about on this show, I’ve done some presentations on that. That’s the thing that’s sort of happening in the background from a political perspective, that could have major implications for the industry. For marketers, of course, if cannabis goes from schedule one to schedule three into ad e goes away. I mean, that changes everything for everybody. But it means marketing becomes a legitimate business expense and can be written off, which in theory, should and can change budgets in the space. But as a lawyer, and from a legal perspective, want to get your take on what’s happening. What are you talking to clients about? What do you see, I know you’ve got some unique insight into this, but what do you see going on? And what’s important for marketers to know about this process?

Jay Kotzker  06:54

Yeah, I mean, it’s a it’s still a kind of tumultuous time, obviously. Back in at the end of 2023, you saw the Department of Health and Human Services recommend to the DEA, that marijuana be rescheduled? It looks like the DEA is getting closer and closer to actually adopting those recommendations. We don’t know necessarily what that may look like. Certainly Congress could step in at any point as well. And from a legislative standpoint, to change things dramatically. Whether it’s rescheduling or D scheduling entirely. Presuming, though, that we’re going to be moving from a schedule one to a schedule three. You know, there’s a whole host of legal issues that come with that, right, you know, operators don’t understand, what does this actually mean for me, right? You know, the first the first one is, look, cannabis is not going to all of a sudden be federally legal at this point, right? We’re simply moving it from one classification one schedule to another, which carries with it, you know, slightly different and impactful for this industry to be sure changes, right. All of a sudden, cannabis is not going to become legal in states that don’t authorize medical or adult use cannabis businesses. You know, we’re not going to all of a sudden see publicly traded companies being listed on major US exchanges. You know, we may see regulatory agencies come in for the for like the FDA and others and start implementing new stringent requirements around products that fall under their purview. And we can talk a little bit more about that later. And more importantly, most importantly, probably is, this doesn’t allow for any sort of interstate commerce necessarily, we don’t necessarily know what that’s going to look like. But rescheduling, it could make the laws a little bit easier on interstate commerce, but we don’t necessarily know that to be sure. And that’s, it’s because cannabis is a little bit different than other products that move from schedule one to schedule three. And by that, I mean, the, you know, schedule three drugs that go in through a review process, they still have to be prescribed by a doctor, there’s stringent dispensing caps and things like that, that doesn’t seem to fit very well within an industry that we’ve already built. It’s not necessarily that we’re going to have a doctor now needing to be prescribing cannabis flour to somebody, they would be more prescribing a treatment or a drug that may be cannabis was contained within right and there’s only a handful of those Epidiolex being one. So how that actually works in practice is going to be very unique, because we’re not talking about other scheduled three things such as Tylenol with codeine or oxycontin which is scheduled to right which those are, you know, those are branded drugs, but they still very much need prescriptions. There’s a cap on how much can be dispensed, you know, in a certain amount of time by by various doctors. So I don’t I don’t know exact Like how that’s going to play out from scratch, you know, moving schedules. But as you alluded to, what the biggest deal is, is that all of a sudden that move in schedules will remove cannabis from schedule one, and then remove any sort of to ad e requirements. And obviously, that’s a huge boon. For cannabis operators, you know, the reports that I saw coming out from 2022 showed that cannabis operators spent paid more than a $1.8 billion dollars in taxes more than non cannabis companies have similarly situated, that means they’re getting taxed at a 70% greater tax rate than most legal businesses. And all these operators know what that means, you know, your rent, and your marketing materials and your payroll, and all of these things you can’t normally deduct, all of a sudden would be lawfully, you know, lawful deductions. Right. And, you know, hopefully, that allows operators to divert a lot more of that money into marketing channels into IP protection into more robust regulatory compliance relationships, perhaps while at the same time allowing their businesses to to grow and be able to reap some of the real benefits of of operating a legitimate company.

Lisa Buffo  11:25

And you had mentioned as and thank you for clarifying, I should have mentioned exactly what 280 is. But for those who might not know, we’ve talked about it a lot. It is the IRS tax code that does not allow cannabis businesses to deduct all what would be normal business expenses the way others can, which leads to that 70% tax rate. So in addition to that, changing budgets, sort of the way accounting happens, one thing you and I had talked about was that it could possibly change, or I think it will change the federal trademark registration. Can you explain? Can you talk to the audience about that? What does that mean? Is that a yes? Maybe? How should they be thinking about it?

Jay Kotzker  12:09

Yeah, it’s it’s maybe, but it’s something that we should be thinking about and talking about. Now, to be sure. You know, it’s generally assumed the DEA is going to codify these recommendations, right. And as a result, cannabis trademark owners should be able to more broadly claiming some sort of national trademark rights under federal law, currently, the way that it’s now because of the Controlled Substances Act. And because there is not a lawful use in commerce, and by that the statute means lawful interstate commerce of these products. Plant touching materials themselves are not subject to or not capable of obtaining federal registration. Federal registrations are available currently for all sorts of other ancillary goods and services, right, all of the hats and the T shirts and the stickers and the lighters and the rolling papers and things that you see sold at, you know, in dispensaries. But I’ve also had, you know, a number of clients that are able to protect consulting services or educational services or things that are not necessarily, you know, contain THC. What this will do, perhaps, and you know, this is yet to be seen is it will allow those products that do contain THC above point 3% on a dry weight basis to obtain federal trademark protection. And as I mentioned a little bit before, there’s evidence of this, specifically in the in the federal statutes that list some of the examples of drugs and preparations that are contained within schedules. As I mentioned, oxy cotton is has a federal trademark, and that’s a schedule two drug. You got Tylenol with codeine, you’ve got other hormones and other testosterone type drugs that are contained within schedule three that are, you know, have federal trademark protection and are allowed to be go across state lines, right. So presumably, we would have that same ability here. And that’s huge for the industry. Obviously. I caveat to that, which I think is a little interesting in that currently, the federal trademark office also won’t accept applications for any hemp derived products that are consumable, whether or not they have less than point 3% THC in them at all. That would probably remain the same because of it’s contained under the Farm Bill, and it’s, it’s subject to the Food and Drug Administration and the Cosmetic Act, so we may have a little bit of a split there where industrial hemp marks may not be able to obtain federal registration, but THC heavy products could potentially obtain federal registration. So we’ll see how that shakes out as well. Um

Lisa Buffo  15:08

Would you expect the USPTO to tell us like if if it does get rescheduled? Would they say? Or how do they? How do you How would we know? Do we just try?

Jay Kotzker  15:19

And that’s what happens. Yeah, it’s really interesting in that going back a decade now, I’ve seen the Patent and Trademark Office fluctuate on this several times, way back in probably 2015, or 2016, there was a brief period. And I mean, like a week, where the Patent and Trademark Office started allowing federal trademarks for cannabis derived products. And so all of a sudden, attorneys who happened to notice this started filing all sorts of applications, and then the Patent and Trademark Office very quickly realized what they had done, and then closed off that avenue for registration. They there, I don’t get the sense or the impression that they will come out and specifically tell people, Hey, we’re always sitting, you know, accepting trademark applications for for cannabis products. The fact is, the trademark office is so inundated with new applications right now. Yeah. Historically, you filed an application, the initial review would happen within six or seven months, that timeframe now is you submit an application, and you might get it initially reviewed at the 12 or 13 month mark. And that’s just due to lack of staffing, more trademark applications being filed, post COVID, and just the lack of the ability to kind of get through all of those. So I think the last thing that the trademark office wants right now is, you know, a tidal wave of new applications, which leads me to believe they’re not going to go out there and publicly say, hey, all of a sudden, we’re now accepting these applications, which is, which means, you know, forward thinking operators need to start having those discussions now about okay, presuming rescheduling? What does that mean for our brands? What does that mean for some of the products and the goods and services that we provide, are they capable of potentially being included in application later, and then working with, you know, IP counsel that can help set the stage so that once those once those prohibitions are, you know, eliminated, applications can can be filed very quickly, because as you can imagine, the word is going to get out really quickly that the PTO is accepting these applications. And you’re going to have a flood of new applications coming, which in this industry is going to present a whole host of problems. Because unlike typical brands, that that can get federal trademark protection. You have a dispensary in Colorado, that can brand it in Colorado and can protect it in the state of Colorado. But without some sort of partnership or licensing agreement or other sort of contractual relationship with another operator in a different state. They really can’t apply for federal application, right. And their protection is limited to the state in which they’re actually providing those goods and services. And what that means is you could potentially have Bob’s dispensary in Colorado, you could have a box dispensary in California, you could have a box dispensary in Nevada, and you know, moving eastward into these emerging markets, all of them can generally operate lawfully under the the mark Bob’s dispensary in those states, and they can’t prevent you know, the Colorado dispensary couldn’t prevent the California dispensary from operating under that name. All of the goods and services perhaps the you know, the the ancillary items, the smokers articles, and the hats and the T shirts could be protected by one of those Bob’s dispensaries and maybe preclude others from from being able to sell those but the core service of the dispensary itself can’t be projected outside the state, right. And so when federal registration is allowed, it’s going to be a race to the Patent and Trademark Office to see who can get an application filed first, because under federal trademark law, it doesn’t matter who was using the mark first, commercially, it with respect to who gets the registration. So you could potentially and this is I had a client that just experienced this the other day, you know they’ve had a bob, Bob’s dispensary has been operating in Colorado, let’s say since 2016. Right? They don’t file any applications that are protected in the state and they’re operating fine. All of a sudden the Patent and Trademark Office opens the doors for federal applications brand new Bob’s dispensary in Florida files an application and regardless of the fact that they’re brand new, and Bob’s in Colorado has been operating since 2016. Bob’s in Florida could potentially get the federal registration and supersede Bob’s dispensary in Colorado. Now there’s all sorts of legal minutia about how that plays out. out then who has what rights and a seasoned trademark attorney can walk those operators through those nuances. But it could lead to a situation where Bob’s in Colorado couldn’t expand into some other states, because Bob’s dispensary in Florida now has a federal trademark. And that gives you national rights to exclude others, whether or not Bob’s is operating in all of these other states around the country.

Lisa Buffo  20:25

Yeah, I could see that. Thank you for clarifying. And that makes a lot of sense. And I did not realize it had gone from I knew six or seven months, I did not realize it was now as long as 12. Which makes a lot of sense. So like, are you saying in theory that if if rescheduling happened tomorrow, and there was a flood of applications of people who knew this, and we’re anticipating this, they wouldn’t even know or have real guidance for possibly up to a year unless the USPTO just like whether they got the applications? Or not? Or it was approved? Right.

Jay Kotzker  20:56

Right. And so, you know, presumably, we wouldn’t see this wave of new applications being filed unless we had some sort of certainty that says, Now with this rescheduling, interstate commerce is lawful. So we would have some sort of certainty that the registrations could be issued. But you wouldn’t have any certainty of that to for at least 12 or 13 months. Absolutely.

Lisa Buffo  21:19

I see. So it is. It hinges on the interstate commerce issue.

Jay Kotzker  21:25

That’s right. And that’s and that’s the function of federal trademark law in order to get a federal trademark registration, which allows you to exclude everyone else nationwide from using something identical or confusingly similar to that mark, you have to show that you’ve been engaging in lawful interstate commerce. And we know that that’s not possible right now.

Lisa Buffo  21:45

Got it. Okay. Thank you for clarifying that. That clarifies for me as well. Let’s kind of go to the beginning of this process for marketers who may be listening or business owners who are in the early stages, who are maybe maybe they are the Bob’s in Colorado that hasn’t protected their brand yet, or they’re considering starting a new business launching in a new state? What are some of the things that you would what’s the checklist for marketers in the beginning, what what do you see? What do you do with your clients in that sense? And also, maybe what are some of the common mistakes that folks who don’t engage with the lawyer, you kind of end up cleaning that up? Like, what what’s the first step that they should know about? From a brand protection? So

Jay Kotzker  22:31

let’s start, let’s start with the common mistakes, because this I see more times than not, and it’s big on the branding and the marketing side of things. And these are things that can be fixed very early on. And the primary one is get an attorney involved early. A trademark attorney and IP attorney that can help you one identify, is your mark distinctive enough, right? Because there’s not only is it there’s a standard of review that says is it confusingly similar to something else that’s been filed are approved. But is it distinctive, right? Or is it really just descriptive of the product or the service? And is it geographically just good for it? Right? Is it Denver, Denver, but shop? Right? Maybe that’s not descriptive, you know, not distinctive enough to allow for federal registration. Right? So let’s take a look at your brand and say, Is it distinctive enough? Or are there some things that we need to change to the mark itself to make it a little bit more distinctive, so that it’s capable of, you know, this brand protection at the federal level, right. And what that really involves is, let’s have a conversation about what the brand is the proposed brand is and let’s conduct a search, right, and that search is going to be nationwide. And we do this very regularly for clients, they’ll come to us at the infancy and they’ll say, hey, we you know, we have three or four or five different names for a new product line or a new dispensary, or you know, whatever the case may be, and we can very quickly kind of do a knockout search and say, you know, these three, definitely not these two probably require a little bit more in depth of, you know, analysis, but at least that gives, you know, marketers, the ability to not focus their resources on things that are not going to be fruitful that in the end of the end of the day, I had a client come to me not long ago, who had spent $20,000 Building a beautiful brand, for a new dispensary in New York City and very excited about it and incorporated a lot of you know, subway map type things and really cool New York specific kind of brand elements, but the word Mark they wanted to use, they never went through the process of saying Is there anybody else using this in this space now? And within 15 minutes, I was able to get back to them and say, you know, there is an identical brand in Ohio. There’s an identical brand you In Florida, there’s an identical brand in Nevada. And there’s one in California, which for a company that has aspirations of expanding outside of the state of New York, was a huge problem for them, right. And then further search revealed that the California company had already applied for federal trademark registration for the hats and the T shirts, and the stickers and the sunglasses and all of the ancillary products. So even if, you know, the New York company didn’t want to move out of the state of New York, they weren’t going to be able to put their brand on all of these ancillary products that build brand recognition out in the community. And, you know, despite, despite not wanting to give them that, that reality, and that that check, they had to go back and start from scratch with an entirely new brand, which the membership knows is very time consuming, very expensive, and certainly not something you want to go back to your executives with and say, We got to start from scratch. So conducting a search and having a discussion with IP counsel early on is absolutely imperative. And that doesn’t go just for word marks that’s you know, taglines, or slogans that a company might use, as well as design elements.

Lisa Buffo  26:16

I was just going to ask that those are, those are separate things that right, it’s the word what is your company name, but also the logo? All of that needs to be checked out before you run with any of it?

Jay Kotzker  26:30

Absolutely. Yeah. And sometimes the logo turns out to be just fine, because it doesn’t necessarily contain the word mark of the brand itself. Right. And so there’s ways that, you know, we can, we can work with brand designers and graphic designers. I mean, honestly, some of the, you know, the most productive relationships I have with clients on the brand development and protection standpoint, are because their graphic designers have the forethought to say let’s get an attorney involved. Now, while we’re still in the tinkering around and playing around phase, so that we can get a lot more guidance on how to navigate potential obstacles in our way. So that when we get to a finished, you know, product or a finished design element, we know that one, it’s distinctive enough to it’s something that we can protect, and three, we can exclude other people and monetize it in some way. Which ultimately, if you’re going to spend this much building brands you want to be able to do. Yeah.

Lisa Buffo  27:26

Okay. So in summary, start early, working with an attorney early, do it but do your searches and check with counsel before you lock in on a design or name. Anything else from the early stages of what else marketers should be thinking about? When it comes to branding, brand protection and or compliance?

Jay Kotzker  27:49

Yeah, and I think part of the discussion I like to have with folks early on is outside of your very core, good or service, right? Like, if you’re a dispensary, you’re a retail outlet, you know, what other things could you be providing that we could use as a branding opportunity, right? Instead of waiting for rescheduling so that we can protect your brand on a federal level? You know, are there educational pamphlets you can provide, you know, at the point of sale that have your branding on it about safe consumption or safe handling or safe storage or, you know, whatever the case may be, are there community engagement pieces that you can put branding on, that allows us to go to the federal level and get you at least an application submitted. So that look, it’s it’s community engagement, it’s education, materials about consumption of cannabis, or about the safe handling of cannabis that gets you a lot closer to the prize than the T shirts, or the stickers or the hats, perhaps so that, you know, when these floodgates do open when there’s rescheduling of some sort, you know, perhaps your application that’s already sitting there will be used as the basis to refuse others that are filed after you because it’s so close in similarity to what the real prize is. Does that make sense? Yeah,

Lisa Buffo  29:10

so it’s kind of like creating a proactive or offensive strategy in addition to like defense. That’s

Jay Kotzker  29:17

exactly right. I like to liken it to creating a moat around the prize with you know, the the castle in the middle being the cannabis product itself that we can’t yet protect on the federal level. But if we can connect all these other pieces, we effectively build a defensive moat around the you know, the cannabis product itself, so that somebody else couldn’t slip in later on and get a registration for that one thing because all of your other applications or registrations will be cited as a basis for refusal against them.

Lisa Buffo  29:48

Cool. Okay. Um, and then can you speak to what are the consequences of not doing this? I know you have a little bit but like are just so folks really know the importance like what? What does that mean? When when you don’t protect your brand, and you run into that situation with the dispensaries or someone else who’s got it in these other products first,

Jay Kotzker  30:11

right. And ultimately it’s going to come down to, you know, time and expense and capital expenditure to try to clean up these messes right. If we go back to the Bob’s dispensary model, we’re going to see all the Bob’s dispensaries at some point and be fighting about who has priority who can move into states that, you know, maybe there’s not a Bob’s dispensary, and already, filing an application early, even if it’s for these ancillary products or services, puts that application in a public database. And whether that’s violating a state trademark registration for the dispensary services, or the actual cannabis products themselves, or its filing a federal application for you know, all these ancillary things that we’ve been talking about. It creates a public record, so that when you know new brand is starting to develop, presumably they’re hiring a trademark attorney to help them navigate this space, that trademark attorney should locate these applications and steer their clients away from something that’s confusingly similar. So it acts as another defensive strategy that puts the nation on notice effectively, right, that you’re claiming trademark rights and these specific goods and services, so that it may prevent others from trying to adopt something very similar. At you know, secondarily to that, if the more that you can protect now, the more licensing opportunities, it allows you, right, you can turn around and monetize that IP by licensing those brands into other states, whether that’s through partnership arrangements, or solely license agreements, and things like that. Another downside could potentially be look, going back to the Bob’s dispensary model. If you’ve got Bob’s dispensary who has aspirations of expanding outside of their jurisdiction, and they’ve done nothing to protect themselves, other than in the state, they’re going to run into a lot of problems of trying to determine who has seniority, who has priority between all of these competing dispensaries. And as you can imagine, that becomes very time consuming and very expensive. The last, the last data that I saw was a federal trademark infringement lawsuit, which is brought in federal court, on average costs about $250,000 to prosecute. So the last thing you want to do is get into a trademark infringement battle that you could have avoided early on by taking some of these proactive steps.

Lisa Buffo  32:44

Yeah, that’s a lot of money. So if someone wanted to, if you had messed up and someone wanted to pursue you, and they were insistent on seeing it through you, you just have to deal with that at that point. In terms, I

Jay Kotzker  32:55

mean, yeah, part of part of the trademark law requires brand owners to police and enforce their marks, or they risk losing their right to that mark. And so, you know, whether you like it or not, you know, brand owners are going to have an obligation to go out there and find infringers, or find people that are that started using the mark after them. And they’re going to have to engage in these kinds of legal analyses of what are our rights? What are our obligations? Do we have to enforce this mark? Is there potentially a way that we could enter into a coexistence agreement or a licensing agreement. But those are all things people are going to have to think about, as some of these interstate commerce walls fall down. And all of these products all of a sudden start traveling across state lines.

Lisa Buffo  33:39

So in that case, I guess for non cannabis products or non cannabis clients, do you do regular maintenance where maybe once a year, you you’re doing proactive searching to see if anyone has violated or like,

Jay Kotzker  33:55

I don’t even do it once a year. I do it once a week. So only all of our trademark clients are set up on automatic watch services on our end. And that watch service will provide me with updates every week on anything that’s filed with the patent trademark office that could potentially be confusing. And that gives us the ability to advise the client, we can then take steps once this application gets reviewed to either oppose it or trying to cancel it or reach out to that operator and say, Hey, we’re Bob’s dispensary and you know, wherever we view this as a conflict, we want you to drop this application now. So it’s a great point that you brought up watch services are incredibly important for existing brand owners. Very similar to the way many marketers I’m sure use Google alerts to alert them when someone’s using their brand, you know, online, these trademark watch services that we provide to our clients do something very similar, but very specifically on the trademark side.

Lisa Buffo  34:56

Okay, interesting. So if you’re already working with an IP lawyer and you haven’t asked about this make sure that there’s some level of watch and proactive enforcement involved. Right? When we and weekly Okay, good to know, I’m

Jay Kotzker  35:12

not gonna say every brand has has an issue pop up weekly, but my reports run that regularly so that, you know, nothing’s ever gonna fall through the cracks.

Lisa Buffo  35:21

That makes sense. Okay. So we’ve covered some brand protection. And I want to talk a little bit about cannabis marketing, compliance, Legal Compliance, a little bit of the other side of that, as far as campaigns and other ways in which there’s an intersection of legal and compliance in Canvas businesses, but from that marketing and communication standpoint, what are some of the things that I think it’s easy to say, marketers need to be compliant, you need to understand what you’re doing, you need to know what you’re putting out, and you need to do it everywhere, where you’re putting out content, and then it’s another to actually do that in practice. And I also think there’s a level of if it’s not so bad, like if we’re if we’re not doing the big two red flags, right, like making marketing, sorry, making health claims or marketing to children that like we’re generally okay. What advice do you have? Or what do you see come up that might get lost in that conversation? And or what, what do marketers need to be considering from a compliance perspective that maybe they wouldn’t think about unless an attorney told them from the non brand protection standpoint?

Jay Kotzker  36:38

Right, right. And I mean, a big part of that is the fact that, you know, the advertising and marketing regulations vary so much, between jurisdictions, right. So for, you know, a single brand in one jurisdiction, what may not be incredibly daunting, of understanding what the regulations are in the state of Colorado, the minute you want to start expanding your brand, to other jurisdictions, you all of a sudden have to relearn all of that. And there’s nuance. And as operators in this space, know, especially in Colorado, the minute new rules are released, the red lines for the next round, are constantly coming. Right? So having someone stay on top of what is not necessarily what is the rule now. But what is the rule going to be? Or what are the discussions around rule changes going to be? And how does that impact our branding and marketing strategy? Eight months, 12 months down the road, right? I mean, especially in Colorado, we’re given a pretty big, you know, heads up on, hey, here’s the red lines, we’re good considering adopting, we’ll have policy groups, there’ll be informational sessions. And then it’ll say, Okay, we’re adopting them. And they go into effect, you know, whenever it is down the road, we routinely work with, with folks on the marketing and branding side to say, here’s what’s coming down the pipe, not only in your state, but all of these other states that you have some sort of interest in. And here’s what those changes could potentially mean for your business, not necessarily just from a compliance, marketing compliance standpoint, but just operational standpoint. as a whole.

Lisa Buffo  38:18

Yeah, that’s, that’s really helpful. And I know like, at least for us, we’ll we’ll see it on, you know, you can get on the meds, newsletter, there’s different ways where those bodies will actually give you direct communication. But that’s really helpful to know that you guys monitor it, not just from that marketing and brand protection standpoint, but everything in relation to how you run your business. Because there is there is so much with that. Right.

Jay Kotzker  38:42

And and again, part of you know, on the on the advertising and marketing specifically, you know, the, you’ve got, you’ve got brand and marketing folks that are working, you know, what my suggestion is, is make those relationships with compliance folks, whether they’re your in house compliance folks or outside or outside attorneys, make that a regular relationship that you’re always you know, that that communication needs to be constantly open, it shouldn’t be a reactive discussion of, oh, the rule just change with the largest change. Can we do this now? It should be much more of we’re thinking about doing these things. Is this something that’s going to be available to us down the road? If so, what changes do we need to make internally to make sure that we can now you know, advertise in this channel, right. I mean, unlike traditional products, media channels, like television and radio and print and billboards, I mean, they’re all over the map in cannabis on what’s allowed and what’s not. Sometimes it’s very local jurisdictions specific as well. So, you know, making sure that you’ve got really good open dialogue with compliance folks and or attorneys. For those. Those compliance regulations I think is paramount.

Lisa Buffo  39:57

Thank you for that. Okay, so well Two questions. What are so I know at least when I work with lawyers, I’m like, tell me what I tell me what I need to know. Tell me what I don’t know. But what can marketers or business owners? What should they be asking their lawyers? Like? What’s? How can we be proactive about it and working with folks like you?

Jay Kotzker  40:18

Right? And like I said, part of it is all about what’s coming, right? And how can we set ourselves up for success now, understanding what the regulations are going to be, you know, down the road. And that comes from everything from consumer privacy and data protection. I mean, we’ve got, you know, what are the legal requirements that dispensaries have to engage in to store customer data or patient data? How do they comply with some of these data protection laws that are being rolled out? In the country and around the world? You know, what are your contractual agreements? And what do they say as far as liability, right? And will that change when regulations change, you know, having an attorney reviewing these through a lens of not, here’s what the rule is now, but here’s what the rule or the statute could be down the road, and being able to provide guidance to operators about how we could potentially change their contracts to limit that liability, or to, to bring into more risk management functionality is incredibly helpful. And that’s my biggest thing is, you know, we like to work with folks, not necessarily as just a service provider, like we really do embrace kind of the community of it, we want to be people that have an open dialogue with our clients constantly. We don’t want it to be, like I said, they got in trouble, because they hit a marketing problem. And now the meds involved, and you know, we’re cleaning up a mess. Certainly, there’s plenty of that. But we like to work with folks on an ongoing basis to ensure that those mistakes don’t happen. Right. And part of that, like I said before, was what are the emerging legal issues? What are what are the trends that we’re seeing in some of these emerging markets? Can we make those recommendations to these more established markets? Do we see that, you know, maybe we didn’t have it all right, the first time. While most of these other states have adopted a lot of what these established, jurisdictions have done, they have made a number of changes as a result of looking back and saying that’s not working. Right. And so how can we take some of those concepts and start, you know, introducing them into more established markets so that we can allow operators in those, you know, more established markets a little bit more leeway, and a little bit more opportunity to get success?

Lisa Buffo  42:39

Yes, and you guys have been very good about engaging with the community, you’ve been really generous and helpful and answered our questions as well. So all right, so last question, what it would be, and I think you’ve been very clear. So maybe you’ve already answered this. But what would be your number one piece of advice for cannabis marketers, or business owners today? If it’s different than anything you’ve said?

Jay Kotzker  43:01

Yeah, and it’s really just be proactive and not reactive. You know, what you’re gonna save money to, you’re gonna set yourself up for much greater success, if you have an understanding of what the market regulations are gonna be like down the road, and you’re making those changes incrementally now, as opposed to, oh, crap. Now the rule is changed. How does this impact us and you’re scrambling to all of a sudden change your marketing content or your or the advertising channels or things like that. So just being proactive, understanding that this is an industry that is not stagnant? It’s constantly changing, and it’s changing at such a rapid pace that having those relationships with compliance experts with attorneys is paramount. Absolutely.

Lisa Buffo  43:53

And is there anything else we haven’t mentioned today that you want to say before we wrap up to the audience?

Jay Kotzker  44:00

You know, not really just understanding that, you know, there is there’s a lot that you can do now to protect yourselves and set yourself up for success later. And whether that’s, like I said, on the compliance side of things, or that’s more on the IP strategy side of things, you know, the discussions we’re having with, you know, forward thinking operators now, they’re not thinking about what’s the market going to look like in a year, they’re thinking about what’s it going to look like in three or four or five? And how can we set the building blocks now to ensure we’re positioned in a favorable way down the road, which not only helps you from an operational success standpoint, it makes your company you know, much more attractive for an exit, right? If you’ve got all of your IP buttoned up, you’ve got exclusivity around the country. There’s not a million other Bob’s dispensaries that you’re now dealing with because you didn’t do the proper searching initially. That sets a company like that up for you know, huge success when Ultimately, they want to exit and they have a huge IP portfolio and they’ve got a marketing strategy that’s compliant and forward thinking.

Lisa Buffo  45:08

That’s, that’s really good advice. Okay, Jay, well, how can our audience get a hold of you? Is there any website email? How can they find you LinkedIn? Anything you want to share? We’ll also include it in the show notes. But if you want to let them know feel free. Absolutely.

Jay Kotzker  45:24

So you can check out our website. It’s hole on law.com H O L O N, or they can reach me directly at J Katsura at Holon law. And my office number is 303-529-0112. We’re happy to talk to operators all the time about any sort of compliance questions, they may have strategies they may be implementing going forward, or giving them an audit of what they have in place currently, and making recommendations on ways to tighten that up a little bit more or give them a pat on the back and say you’re doing it right. Good. Keep going. You know,

Lisa Buffo  46:01

nice. Nice. Okay. Well, Jay, thank you so much for taking the time and joining us on the show. I really appreciate everything you’ve shared with us today.

Jay Kotzker  46:10

Absolutely. So it’s been my pleasure.

Lisa Buffo  46:14

Thank you, everybody. You can connect with Jay on LinkedIn and you can connect with us on social media at Canna marketing, and on our website, the cannabis marketing association.com To learn more about membership, join the community and perhaps even join us as a guest. We’ll see you next week.

— Transcribed by otter.ai