With 28 states legalizing marijuana, we’ve gotten an avalanche of new products.
You can see below where medical and recreational marijuana are legal:
Where are we going? To how branding impacts competition.
Branding Pot Products
A catchy name is one way to secure a brand.
Thinking of Abracadabra, in 1994 Jeff Bezos named his new business Cadabra. But when his attorney thought he said Cadaver, they switched to Amazon.
For medical marijuana, the names include Confidential Cheese and Bubblegun (a Bubblegum and AK-47 hybrid). You would also see Chocolope and Red Cherry Berry.
The following LA Times interactive graphic named 779 marijuana strains:
After a name, branding takes you to the USPTO for a trademark. This is where marijuana has a problem. In 2010, the U.S. Patent and Trademark office briefly had medical marijuana on its approved list. But soon after they eliminated it.
The reason? Marijuana remains a Schedule 1 drug under the Controlled Substances Act. Illegal federally, marijuana strains and edibles cannot be trademarked. Instead, producers can try to get a federal trademark for their paraphernalia and clothing. On the state level, registration is a possibility.
Our Bottom Line: Monopolistic Competition
The marijuana industry is fragmented by state borders and restrictive regulations. Composed of many small firms that need to differentiate themselves, its market structure is monopolistic competition. Like other agricultural items, names can be used to create a brand. But while the Honeycrisp apple can use a federal trademark to secure its brand, marijuana cannot.
Marijuana needs more secure branding to move toward oligopoly. Meanwhile the big name tobacco companies are waiting in the wings.