Proposed legislation in Pennsylvania would allow the sale of cannabis through the Commonwealth’s existing alcohol store system. This could make it easier for consumers of both substances to stock up for their next get-together. But it could also lead to confusion in the aisles of Pennsylvania’s liquor stores.
Those native to or living in Pennsylvania may be familiar with the Commonwealth’s complex alcohol laws, enforced by the Pennsylvania Liquor Control Board (“Control Board”). The Control Board has many responsibilities, including licensing the sale of alcoholic goods in the Commonwealth and operating retail stores where consumers can buy the goods. Because various types of alcohol goods are available in various types of stores, this often leads to consumers making trips to multiple different stores depending on what type of alcohol they want to buy.
Recreational use of cannabis by adults is currently illegal under Pennsylvania law, so confusion between brands of alcohol and cannabis on store shelves isn’t a concern. But this may soon change as many bills are circulating surrounding the legalization of cannabis. One of these bills would put the Control Board in charge of the sale of recreational cannabis, similar to its responsibilities surrounding alcohol. This would lead to consumers encountering both cannabis and alcohol products in the same store at the same time.
It can already be quite difficult to make a decision when purchasing alcohol. Consumers are presented with an overwhelming number of brands of wine, spirits, liqueur, beer, seltzer, cocktails (you get the point). This is why brand owners in the alcohol industry need to select unique brand names and packaging designs for their goods to stand out from competitors. Adding cannabis brands to the mix could further dilute a saturated market and potentially give rise to consumer confusion.
Brand owners must police their trademarks in order to carve out and maintain rights in a particular space. The likelihood of consumer confusion is the test used to determine whether one party infringes another’s trademark. The test for likelihood of confusion includes, among other things, the similarity between marks and goods at issue, overlap in relevant consumer bases, and the overlap in the channels of trade in which the goods are sold.
Allowing for the sale of alcohol and cannabis in the same store to the same consumers could heighten the risk of those consumers mistakenly believing alcohol and cannabis products emanate from the same source. This is perhaps a consideration that neighboring states like New Jersey and New York, and separately our Commonwealth (Massachusetts), took into account in separating cannabis dispensaries from alcohol stores.
In view of the pending legislation in Pennsylvania, brand owners in the alcohol space should consider whether trademarks for cannabis may infringe their existing rights and consider those same trademarks —even if not yet registrable at the USPTO—when selecting a new trademark for themselves. Similarly, cannabis brands should be wary of planting their roots too close to existing alcohol brands.
To further muddy the waters, non-alcoholic drinks are offered in many stores operated by the Control Board, and the corresponding trademarks should also be taken into account to avoid confusion.
This legislation is a step forward for a blossoming cannabis market in Pennsylvania. However, it could lead to consumers buying buds thinking they are from the same brands as their favorite booze.