Cannabis Companies and Celebrity Endorsements – What Not to Do

Cannabis Companies and Celebrity Endorsements – What Not to Do

While celebrity endorsements can help cannabis companies stand out from the competition, it’s important to do it the right way. Actor Clint Eastwood recently sued three CBD companies that published online articles falsely claiming that he endorsed their products. He has also filed lawsuits against 10 online retailers who allegedly manipulated Internet search results to make it appear that he endorsed the products. “Mr. Eastwood does not have, and never has had, any association with the manufacture, promotion, and/or sale of any CBD products,” one of the lawsuits states.

Clint Eastwood’s Lawsuits Against Cannabis Companies

As detailed in media reports, one of Clint Eastwood’s lawsuits alleges that cannabis companies are “using programming code to insert Eastwood’s name into online search results for CBD products, misleading consumers into thinking the filmmaker is manufacturing or endorsing them.” According to the suit, “Defendants have figuratively posted a sign with Mr. Eastwood’s trademark in front of their online store to attract consumers and caused the consuming public to believe that Mr. Eastwood is associated with and/or endorsed the CBD Online marketplace Defendants’ CBD products, when no such association actually exists.”

Another lawsuit alleges defamation claims against three CBD companies. According to the complaint, the defendants published fake news stories stating that Eastwood endorsed their products and that he was leaving the film industry to focus on the CBD industry. The spam emails included the subject line “Clint Eastwood Exposes Shocking Secret Today,” while the body of the messages included a fake interview with Eastwood meant to mislead readers to believe it was conducted by the “Today” show.

According to court documents, Eastwood is seeking to not only hold the defendants accountable, but also deter other companies from attempting to use his name and likeness without permission. “By this action, Mr. Eastwood seeks to hold accountable the persons and entities that wrongfully crafted this scheme, spread false and malicious statements of facts about him, and illegally profited off of his name and likeness,” the complaint states.

Celebrities’ Right of Publicity

Among other claims, Eastwood maintains that the CBD companies violated his publicity rights. The right of publicity typically refers to people’s legal right to control the commercial value of their image, name, and likeness. The use of any of those three things without the permission of the individual first would be a violation of his or her publicity rights.

Although the right of publicity is not protected under federal law, many states have laws recognizing the intellectual property right. Eastwood’s case relies on California’s right of publicity statute, which prohibits the unauthorized use of a person’s name or likeness for commercial and certain other exploitative purposes. 

New York has a similar law. Under N.Y. Civ. Rights Law § 50. Right of Privacy: “A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the  name,  portrait or  picture  of  any  living  person  without  having first obtained the written consent of such person, or if a minor of his or  her  parent  or guardian, is guilty of a misdemeanor.” New York law, N.Y. Civ. Rights Law § 51. Action for Injunction and For Damages, further provides:

Any person whose name, portrait, picture or voice is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained as above provided may maintain an equitable action in the supreme court of this state against the person, firm or corporation so using his name, portrait, picture or voice, to prevent and restrain the use thereof.

New Jersey does not have a right of publicity statute. However, the right is recognized under common law. Under New Jersey law, the unauthorized publication of an identity for promotional or commercial purposes constitutes appropriation. Generally, a plaintiff must show that the defendant appropriated the plaintiff’s likeness; without the plaintiff’s consent; for the defendant’s use or benefit; and caused damage

Endorsement Agreements

While cannabis companies can’t exploit a celebrity’s name or likeness without the person’s permission, celebrities can license their identities for others to use for commercial purposes. Celebrities like Snoop Dogg, Olivia Wilde, Jay Z, Danny DeVito, Wiz Khalifa, Melissa Etheridge, and Willie Nelson have all sanctioned the use of their name and likeness to tout cannabis products.

When negotiating an endorsement agreement, cannabis companies should rely on legal counsel to protect their rights. Key issues that must be addressed include compensation, scope of services, contract duration, and exclusivity. Once the deal is negotiated, it must also be converted into a binding legal contract.

Before launching a marketing campaign, cannabis businesses should also make sure that they understand the particular legal issues that arise when using testimonials and celebrity endorsements. For instance, under the Federal Trade Commission (FTC) guidelines, any claims made about a product, whether via an endorsement or testimonial, must be substantiated. In addition, endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• Medical Marijuana May Now Be Prescribed Via Telemedicine in New Jersey
• NJ Medical Marijuana Dispensaries To Start Home Delivery Soon
• Understanding How the USPTO’s Examination Guide for Cannabis Marks Impacts CBD Products

<small><p>Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.</p></small>