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Candymakers Seek New Tactics to Stop Marijuana Edible Copycats

June 23, 2022, 9:25 AM

In April 2020, a 5-year-old girl was hospitalized in Utah after eating candy her family got from a local food bank. What they thought was a Nerds Rope fruit chew was instead a sweet treat in nearly identical packaging—but one that happened to be infused with THC.

That incident became a high-profile example of why big brands like Hershey Co., Kellogg Co., and General Mills Inc. say it’s necessary to crack down on marijuana edibles whose packaging imitates their products—to protect children and, while they’re at it, their famous trademarks.

Such pot candy and snacks abound on the internet and in court disputes: THC-laced Oreo cookies called Stoneos; a Reefer’s cup instead of a Reese’s cup; Sour Patch Kids gummies reimagined as Stoney Patch; a 420-friendly spinoff of Mr. Goodbar called Mr. Dankbar.

In April, New York University researchers said their study of more than 250 marijuana edibles found that about 8% “closely resembled” existing snack foods, including many marketed to appeal to children with cartoons and fruity or candylike flavors.

Big candymakers had hoped this year to get Congress to help crack down on the copycats by requiring platforms like Amazon and eBay to pre-screen for marijuana-laced treats and packaging that imitate famous trademarks. That bid seems to have fallen short: A spokesman for Rep. Darrell Issa (D-Calif.), who co-sponsored the Shop Safe Act, told Bloomberg Law that a provision protecting famous brands probably won’t make the final version being negotiated by lawmakers as part of a broader bill to boost competition with China.

On Wednesday, attorneys general from 23 states issued a letter urging Congress to take action on marijuana edible lookalikes. “Copycat THC sellers are taking advantage of well-known brands to put our kids at risk,” said North Carolina Attorney General Josh Stein. “They’re playing fast and loose with people’s safety to make an extra buck.”

Some advocates suggest that enforcement efforts turn from the platforms to standards for the packages themselves. This month, New York became the latest state to prohibit legal marijuana sellers from using packaging that would appeal to children with traits like bright colors, cartoons and references to candy.

Stacy Papadopoulos, general counsel of the Consumer Brands Association, said the Shop Safe Act amendment could have been an easy fix, but stressed that how the crackdown is accomplished is less important than getting it done.

“Whether it’s Shop Safe now or another route in the future, what we really are looking for is a solution and a solution soon—sooner rather than later,” Papadopoulos said.

There’s evidence accidental ingestions like the one in Utah will continue, especially as legal recreational marijuana becomes more prevalent. In 2020 alone, poison control centers logged more than 3,000 reports of children unintentionally consuming marijuana edibles. By contrast, a pediatric medical journal reported that the total number of accidental ingestions from 2017 through 2019 was just over 4,000.

A game of Whac-A-Mole

Broadening the Shop Safe Act didn’t draw unquestioned support. Besides shifting some burden of enforcement from the brand manufacturers to the online shopping platforms, some advocates worried the pre-screening requirements would sweep in a host of other products and limit consumer choice while doing little to stem the tide of copycat marijuana items.

“In its heart, it’s a trademark bill that’s a benefit to these big brands,” said Nicholas Garcia, policy counsel at Public Knowledge, a digital advocacy group supported by nonprofit foundations and internet companies including Amazon.

Instead, brands will be stuck with the status quo: occasionally filing lawsuits against individual sellers, but mostly working to convince platforms to take down trademark violators—which can feel like a frustrating game of Whac-A-Mole.

In court, the big candy companies have scored some victories, although legal actions against individual sellers are usually aimed at just stopping sales, not seeking damages. In May 2021, Ferrara Candy Co., which sells Nerds Rope, won a permanent injunction against a cannabis company that had been selling a marijuana-infused copycat version of the snack.

Sales of such products on online platforms have proven harder to target, because the platforms are typically shielded from liability for sellers’ posts. Language in the expanded Shop Safe Act could’ve added secondary liability for platforms.

The confusion isn’t only over the products; as often it’s about the packaging. Some sellers of edibles will package their wares in Mylar bags that mimic or are parodies of recognizable brands. A search on Amazon, eBay or Etsy turns up a plethora of listings for empty baggies sporting designs for snacks like Trix, Reese’s Puffs and Cap’n Crunch cereal.

“Just the companies represented on our task force have taken down thousands of these listings and continue to do so, yet the sale of this packaging is still more prevalent today than ever,” Papadopoulos said. “It is just too easy to put a new listing up the same day as the old one is taken down.”

Danielle Ompad, the New York University professor and lead author of the study released in April, said that requiring packages to be plainer and therefore less appealing to children—as New York’s new regulations do—could be an effective first step. “Nobody’s going to mistake it for Doritos or Nerd Ropes or a Duncan Hines brownie,” she said. “That’s mainly what we want to prevent.”

But it’s unclear if tighter regulations will have the intended effect. Derek Thomas, an executive at cannabis packaging and consulting firm AE Global, noted that many of the companies producing the copycat packages already don’t play by the rules. Controls like the expanded Shop Safe Act and state licensing rules that focus on packaging standards only give more responsibilities to the small sellers that are trying to stay on the right side of the law, Thomas said.

“It’s something that’s more perpetuated by the unregulated, illicit market,” he said.

Avoiding Liability

For marijuana sellers hoping to avoid trademark liability, branding experts suggest several marketing strategies. Rule No. 1: Don’t use a pre-printed baggie with another brand’s mark on it.

Ideally, a brand would create its own name—referred to as a “fanciful mark”—or make use of keywords that aren’t directly related to the product itself, said trademark attorney Josh Gerben, founder of Gerben Perrott PLLC. For example, he pointed to comedian Seth Rogen’s Houseplant line of cannabis products and minimalist accessories, such as stoneware ashtrays and marbleized oil lamps.

Gerben suggested that the goal should not be to ride the coattails of an already established brand but to cultivate a unique following.

“A cannabis product is the same as any other product, whether you’re making a brand of liquor or a brand of toothpaste,” he said.

Going forward, there are even more baseline issues that marijuana sellers and regulators must tackle.

Ompad, the NYU researcher, said it’s important to limit the THC milligrams per package, to make sure someone who consumes an entire package won’t overdose. She said some packages she studied contained upwards of 600 milligrams, which is at least 20 times higher than what is considered a reasonable dose for an adult.

“It’s not that I don’t want us to have tasty edibles, not even that I don’t want us to have nacho tortilla-flavored edibles,” Ompad said. “But they need to be in packaging that does not appeal to youth, that won’t lead to overdosing.”

To contact the reporter on this story: Kelcee Griffis in Washington at kgriffis@bloombergindustry.com

To contact the editors responsible for this story: John Martin at jmartin@bloombergindustry.com; Adam M. Taylor at ataylor@bloombergindustry.com