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Free Speech and Cannabis Brands

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Could the First Amendment’s free speech protections offer a lifeline to cannabis brands hauled into court for trademark infringement for using parody trademarks? In some cases, it might.

For readers unfamiliar with the First Amendment to the United States Constitution, it reads:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

(Our emphasis.) There is a tension between the First Amendment’s free speech protections and trademark rights. Strictly speaking, my inability to legally call my coffeeshop “Starbucks” limits my freedom of speech, even if there is a good rationale for imposing such a limit.

As the Court of Appeals for the Ninth Circuit (“Ninth Circuit”) noted in an infringement case brought by the owner of the Jack Daniel’s trademarks, U.S. trademark law “seeks to strike the appropriate balance between the First Amendment and trademark rights.” Only where likelihood of confusion exists between trademarks does the law curtail the First Amendment’s free speech protections in the context of trademarks.

Nonetheless, “where artistic expression is at issue,” this approach is insufficient to protect the “public’s interest in free expression.” Back in 1989, in a case brought by Ginger Rogers, the Second Circuit adopted what is known as the Rogers test. Under this test (as explained in later case), if free speech interests are implicated, a plaintiff claiming trademark infringement must show that the infringing mark “is either not artistically relevant to the underlying work or explicitly misleading as to the source or content of the work”

What does this have to do with cannabis brands, you may be wondering. Well, arguably, many of the cannabis trademarks that are getting their owners into trouble are artistic expressions. This in turn means that, under the Rogers test, the use of these cannabis trademarks will only constitute infringement of more established brands under very limited circumstances.

Wait, you may be thinking, are you saying that punny names like Zkittlez and Budway are somehow an “artistic expression,” entitled to free speech protections?  Possibly. Consider the Ninth Circuit’s views on the Bad Spaniels squeaker toy, the subject of the Jack Daniel’s lawsuit, which it described in this way:

The toy is roughly in the shape of a Jack Daniel’s bottle and has an image of a spaniel over the words ‘Bad Spaniels.’ The Jack Daniel’s label says, ‘Old No. 7 Brand Tennessee Sour Mash Whiskey;’ the label on the Bad Spaniels toy instead has the phrase ‘the Old No. 2, on your Tennessee Carpet.’ A tag affixed to the Bad Spaniels toy states that the ‘product is not affiliated with Jack Daniel Distillery.’

In the Ninth Circuit’s view, the Bad Spaniels toy, “although surely not the equivalent of the Mona Lisa, is an expressive work.” The key consideration is whether a work is “communicating ideas or expressing points of view.” And the Bad Spaniels toy “communicates a ‘humorous message’ … by ‘juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner.’” This “humorous message” is entitled to free speech protections and does not constitute a trademark infringement.

The Ninth Circuit’s reasoning above could be applied to some of the parody trademarks used by some cannabis brands. As we previously noted, “it seems that the most common reaction to these names is amusement,” meaning that they are successfully communicating a “humorous message.” It follows that the use of these trademarks also results in expressive works, protected by the First Amendment against infringement claims except in very limited circumstances.

As we have before, we draw a distinction between parody trademarks and the improper use of an existing trademarks. Looking at this through the lens of the Rogers test, it is hard to argue that the use of the Zkittlez trademark is “explicitly misleading as to the source or content of the work.” On the other hand, a product (not made by Wrigley) bearing Skittles trademarks is explicitly misleading as to its source and should be kept off the market.

This all said, cannabis brands should not lose sight of the fact that their products are not dog toys. Courts might view free speech issues differently in cases where the products bearing the allegedly infringed trademarks are unlawful at the federal level. Moreover, other circuits might have different views on the trademark law issues at stake, irrespective of the cannabis angle. And to be clear, free speech protections will not do anything for cannabis brands unable to register marks that describe federally unlawful products. Still, cannabis brands at the pointy end of a trademark infringement lawsuit might still want to look at the Constitution for help, just in case.



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Psychedelic Sub-Reddits – The Best Reddit Communities for Psilocybin, Mushrooms, and Psychedelics

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In recent times, Reddit has become the hub for many enthusiasts in the psychedelic community. People from different regions meet up on the platform to share different types of information about psychedelics. From trip reports to dosing info different subreddits contain vital info, tips, and recommendations. Reddit cannabis communities have been thrving for years, while psychedelics have a shorter history on the site. Read on as we take a look at the top 10 Reddit psychedelic communities presently.

Many who are familiar with Reddit can easily summarize it as a social media platform where people meet to share photos and memes. However, for psychedelic enthusiasts, Reddit is much more than that. The popularity of psychedelics as a popular culture coupled with a lack of scientific research has prompted many to seek info elsewhere. This is where open forums such as communities on Reddit have come in as a psychedelic resource. People join such communities to share anecdotal reports on the effects of taking psychedelics and the best ways to take them. Other types of info such as the best way to grow psychedelics at home are also in these communities.

Communities on Reddit are known as subreddits. These subreddits are differentiated based on the topics they are dedicated to. Different topics such as gaming, cooking, movies, and dating advice occur on Reddit. Psychedelics have grown to become one of the prominent topics on Reddit with a wide range of members across different communities.

Below is a closer look into 10 of the best psychedelic Reddit communities.

R/Psychedelics: A community for psychonauts of all levels

If you are new to the world of psychedelics, this community should be your first stop before taking any step. The community plays host to over 140 thousand members that actively engage in all things psychedelic regularly. The features of this special community include memes on psychedelics, tripping diaries, and the history of psychedelics. The community also regularly addresses controversial topics about psychedelics to show the best side of psychedelics to newcomers.

R/Mescaline: The ultimate hub for all things mescaline

For many growers, differentiating between psychedelics can prove to be difficult. Such persons and other enthusiasts are to who this Reddit community is dedicated. Say no more to issues of differentiating between Bolivian Torch and San Pedro. This community shares info on all you need to know about growing and using mescaline. Home cultivation projects, extraction, and dosing info are also shared in this hub to equip all members adequately.

R/DMT: All the secrets of DMT laid bare

DMT is quite popular among those in the art community. This popularity is due to the special visuals attributed to the trip of DMT. The R/DMT community plays host to 185 thousand members who showcase the effects of DMT and how they apply it to art. Many users share DMT trip-influenced artwork on the platform. Most of these images are kaleidoscopic with different patterns and colors. The page is not restricted to art only as info on the preparation and dosage of the drug is also shared.

R/Trippy: All forms of abstract art inspired by psychedelics

This community helps members of the psychedelics world show visual memories of their trips. The users mostly interpret their experiences with abstract patterns, designs, and colors. This community allows the users to submit the products of their trippy visuals. Others engage in these posts by commenting on them and voting. The community is fun to be in with a good amount of members engaging actively.

R/LSA: All you need to know about LSA

LSA or Lysergic acid amide has a strong following among psychedelics. This is largely due to its similarity in name and chemical structure to LSD. This has prompted the need for many to seek info about it and has made its subreddit of the popular psychedelic communities around. Beginners and serious enthusiasts meet in this community to share info on schedules and accounts of daily doses of LSA. The information shared in the community is more scientific compared to other psychedelic communities.

R/Shrooms: The community for adequate psilocybin information

This is the place to discuss anything related to shrooms. The magical world of mushrooms is carefully explained and discussed in this community. The community plays host to over 273 thousand members where different questions about mushrooms are asked and answered regularly. Different experts are always on hand in this community to give adequate info on all that pertains to psychedelics.

R/CurrentlyTripping: The temple of tripping

This community lives up to its bidding of being the temple of tripping. Apart from it being strictly moderated, the community has different types of sensory and visual media to aid you high. The special images and gifs in the subreddit improve the quality of the trip to further improve the good vibes. The community also comes with special music recommendations that can help make any trip “trippier”.

R/Salvia: Information central for all things salvia

Salvia is one of the psychedelics that is commonly misunderstood due to wrong information being peddled around. This community corrects this wrong by ensuring that it provides its members with quality information about the dreaded psychedelic. Members are to discuss the best ways to use and appropriate doses of salvia that are safe for use. Common dos and don’ts of salvia are also commonly shared in this community.

R/Psychonaut: The best community of psychonauts

Many psychedelics enthusiasts have different questions about altered states of consciousness. Some wonder why they see the shape they see and others why it is color green and not red. This community is where such enthusiasts gather. With over 314 thousand members, it is one of the most popular psychedelic communities on Reddit. Members talk extensively to understand the reasons behind trippy experiences of psychedelics.

R/DrugGardening: Growing at its best

This is a friendly community of growers that share growing experiences and quality information. Members also share photos of their plants while asking for and sharing quality growing tips. The community helps growers of both mushrooms and herbs alike. This makes it very popular among psychedelic growers.

 

Bottom line

There are more communities on Reddit open for you to learn all there is to know about psychedelics. Just get in, socialize and get all the info you need while having a nice time with like minds.

 

MORE ON REDDIT AND CANNABIS, READ THESE…

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REDDIT GUIDE TO HEALTHY CANNABIS

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Choosing the Right Entity for a Cannabis Business: Corporations

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One of the most important decisions a new cannabis business can make is the form of entity it will use. In fact, one of the first questions businesses ask is whether the right entity for a cannabis business is a limited liability company (LLC), corporation, or something else. Like basically every other legal analysis, the answer depends on a lot of business-specific factors. In this series, I will break down some of the key points for consideration of the right entity type for a cannabis business. Today, I want to look specifically at corporations.

A note on limited liability

Before I jump into things, I want to define the concept of limited liability. Limited liability is one of the fundamental features of a corporation, LLC, and some other business types. If a person owns a company with limited liability protections, the person is generally not personally responsible for the debts, liabilities, etc. of the company. Except in a few limited scenarios, if the company is sued and loses, the owner won’t lose anything – except, at most, their investment in the corporation.

Corporations are not the right entity for simplicity

Corporations are the classic business entity type. The problem with corporations is that they are much more complicated than, say, LLCs. They have shareholders (owners) who elect directors to manage the big picture operations of the company. Directors in turn select officers to run the day-to-day affairs of the corporation. So the owners of the business have no stake in the operations unless they are also directors and/or officers.

States have all kinds of detailed corporate governance rules that are generally much more aggressive than LLC governance rules. California, for example, requires that there be at least three directors at all times in a general stock corporation (with a few exceptions). California also limits the number of shareholders a close corporation can have, and so on. Failure to abide by these many rules can mean trouble for a cannabis business.

Depending on the state, there may be many different kinds of corporations. For example, California has general stock corporations, close corporations, non-profit mutual benefit corporations, cooperative corporations, etc. The list goes on. I’ve seen each of these types used for cannabis businesses over the years, but I won’t get into each different type today. If a founder does not form the right type of corporation in a state like California, they may be in for stormy waters.

All in all, corporations can be more difficult to manage than LLCs. But that does not mean they can’t be the right entity for cannabis businesses, as explained below.

Corporations may have beneficial tax status

Corporations, by default, are “C-corporations” for tax purposes. This means that a corporation is taxed on its income. If the corporation issues dividends to shareholders, the shareholders are taxed individually. This is known as “double taxation.” When corporate taxes were higher, the corporation model was often less than ideal. But now, the federal corporate tax rate is 21%. Now that the rate is lower, corporations may be the right entity for a cannabis business in some contexts. Here is an analysis we did as an example a few years ago:

For example, a C corporation that earns $100,000 will pay tax of $21,000 ($100,000 *21%). If that same corporation dividends 100% of its earnings to shareholders, the maximum tax at the individual level is $23,800 ($100,000*23.8%). So the combined amount of tax is $44,800 ($21,000 + $23,800).  In comparison, a partnership (or S corporation) results in less overall tax to the owners $37,000 ($100,000 *37%).

However, a C corporation is the preferred structure if the plan is to limit the amount of dividends paid to shareholders. For example the total tax hit to a C corporation and its shareholders that paid out dividends of $50,000 is: $32,900 [$21,000+ $11,900($50,000 * 23.8%)]. In this case, a C Corporation saves $4,100 of taxes compared to operating as a partnership. The C Corporation has the additional benefit of insulating shareholders/owners from personal liability for federal income tax.

This is just an example and isn’t meant to serve as tax advice. Each cannabis business and its shareholders have vastly different situations and need guidance from tax professionals. But if a cannabis business makes limited distributions, the tax rates can be effectively lower than in a pass-through taxation company.

As an alternative to the C-Corporation model, corporations can elect to be treated as “S-corporations” for tax purposes. To do this, they need to make an election with the IRS within a certain timeframe. S-corporation election means that the corporation is taxed as a partnership (discussed below). S-corporations also have many restrictions, such as limits on the number of their shareholders and U.S. residency requirements for shareholders. S-corporations won’t work for many businesses – especially ones that intend to have a large array of shareholders. If pass-through taxation is important, a different entity type is probably a good idea. I’ll discuss LLCs and other pass-through businesses in a later post. If exponential growth is important, a C-Corporation may be better, which I discuss below.

Corporations may be the right entity for cannabis capital raises

Corporations tend to be the better choice for raising equity and investments. Institutional investors are more comfortable investing into corporations than LLCs, where they can secure director seats, define the classes of preferred or other equity they will get, etc. You can do almost all of this in an LLC as well, but LLCs still limit the types of investors a cannabis company will be able to seek. Companies wanting to bring in tons of equity will usually opt for corporations – at least for their holding companies.

Corporations are often the right entity type for holding companies

Most cannabis companies – especially larger ones – don’t exist as standalone entities. That is, they are owned by larger companies called “holding companies.” A holding company is almost always a C-corporation and the companies it owns (subsidiary companies) are LLCs, S-corporations, or other business entities with pass-through taxation. This allows independence of operations, limits liability at each company level, and allows pass through taxation so the effect of double taxation is only felt at the holding company level.


Overall, companies that opt for the holding company model overwhelmingly do what I just described. Even standalone cannabis businesses are often set up this way. But this is not always the case! I’ve seen holding companies set up as LLCs more than once. Whether a corporation is the right entity for a cannabis business requires a situational analysis. In the next post in this series, I’ll look at LLCs.



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Do You Know Why You Are So Happy When You Get High?

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Why Getting High Makes You Happy

 

A few solid puffs of weed after a day of work.

 

Waking and baking with your morning coffee to start your day with a smile.

 

Sharing a bowl with your friends, then spiraling into a laugh attack together.

 

These are just some of the many happy moments that stoners and cannabis lovers experience. There’s no denying it: getting high does make you happy. On the surface, recreational users turn to the toke for an instant boost of joy, which many love sharing with their buddies. Then medically speaking, marijuana is used as a serious medication for treating depression and anxiety. It’s happiness in a plant!

 

So why exactly does it make us so giddy and happy as soon as we feel its effects?

 

The Psychoactive Effects

 

It’s tough to put the psychoactive effects of cannabis into words, but we’ll try anyway.

 

As soon as you feel buzzed, it makes us feel as if we’re entering another realm of consciousness where everything is suddenly better. Time, the world, people, and even color feels different. This altered state tends to make everything feel lighter, and makes it easier to laugh at even the most mundane of things. So much so, that even the simplest thing can make us burst into fits of laughter – when we wouldn’t if we were sober.

 

Cannabis is such a relaxing plant. It beats alcohol, hard drugs, and even pills when it comes to taking the edge off. No wonder it’s such a popular after-work drug. Instead of happy hours that get you drunk, more and more people are turning to cannabis. Best of all, you don’t get the nasty hangovers the next day. It instantly soothes your worries, releases your stress even if just for a few hours, and overall, makes you feel damn good.

 

Why Cannabis Is Such A Feel-Good Drug

 

Apparently, there’s a science to why it makes us feel so good.

 

Dr. Raphael Mechoulam, the godfather of cannabis, discovered early in his studies of marijuana that a neurotransmitter called anandamide was the reason why it makes smokers so happy. Anandamide takes its name from a Sanskrit word, Ananda, which means “bliss.”

 

In the human brain, anandamide molecules play important roles in our daily lives, specifically with our emotions, sexual energy, memory, pain, and motivation. Additionally, anandamide is an important endocannabinoid, one of the compounds we produce in the body which bind to cannabinoid receptors when we consume cannabis.

 

“Anandamide inhibits the release of glutamate and acetylcholine within the cortex and hippocampus, an action that may underlie the ability of marijuana to impair one’s capacity to form new memories when using the drug. The presence of cannabinoid receptors in the parts of the brain that control movement may explain the stumbling behavior that some marijuana users experience. Cannabinoid receptors greatly enhance the release of dopamine; this action plays a critical role in the ability of marijuana to produce euphoria,” writes Dr. Gary Wenk in his book: “Your Brain on Food: How Chemicals Control Your Thoughts And Feelings.”

 

“Cannabinoid neurons…influence the function of our cortex and various limbic (emotion-controlling) regions; when we stimulate these receptors, we impair higher cognitive functions as we experience euphoria, and when they are blocked, we feel depression,” he writes.

 

What’s interesting is that THC contains high concentrations of anandamide, so while we produce our own anandamide in the body, it also triggers its release when we smoke and consume cannabis. The same receptors are binded to by cannabis and anandamide, and when it comes in contact with THC, dopamine production is boosted.

 

Furthermore, anandamide has powerful antidepressant and anti-anxiety properties. Even if you don’t suffer from these mental health disorders, a little cannabis goes a long way in making you happier than you were before you toked.

 

Studies also show that once THC reaches the brain, it triggers the release of dopamine, another neurotransmitter well-known for its abilities to make you feel good. Dopamine is also known as the reward molecule.

 

It also works the reward system in the brain, which is triggered when we do other things that our body intrinsically knows is good for survival or give us pleasure, such as having sex, eating, shopping, the smell of food in the kitchen, and much more.

 

What’s interesting about the dopamine studies is that they warn of too heavy and frequent cannabis use: in other words, use in moderation, to avoid depleting your brain of serotonin. This occurs because when dopamine levels are elevated, the brain’s reward system may be tripped out, causing you to feel extreme satisfaction and pleasure. Now, if they stay up for too long, some of the dopamine receptors may be shut down by the body even if you’re no longer high from the THC. As a result, dopamine synthesis in the human body may be compromised, causing you to have a difficult time experiencing pleasure from other things that normally give you joy such as hobbies, food, and sex.

 

There’s nothing wrong with suggesting to avoid consuming too much – in fact, it’s fascinating to learn how the body works. If you are prone to depression and anxiety, you should be wary of how much marijuana you consume then; you may be better off with microdoses instead of getting too lit off a bong if you want to sustain the positive impact of cannabis for your happiness.

 

Conclusion

 

The properties of cannabis and how they react with the human body are intriguing to learn about because they make you happier and feel euphoric. It’s a natural way to feel upbeat and improve your mood, while helping shut the brain off from replaying embarrassing memories. Just remember to avoid consuming cannabis in excess.

 

MORE ON ANANDAMIDE, READ THIS…

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