Photo, from WI in 1970, updated 2019 (thanks, r/gratefuldead)
Was reading an interesting article/interview about LSD pioneer chemist Owsley "the Bear" Stanley and hopped over to his site for further reading. In 1969, Stanley and artist Bob Thomas worked out the Grateful Dead logo to mark the band's equipment (here's his story). At first, it was just the three-colored lightening bolt, and was used as a stencil.
In the account, Stanley describes how it became a stencil:
"At the warehouse I told Bob the idea that I had, and he made a quick sketch. A mutual friend, Ernie Fischbach, who was visiting with Bob, said 'Give it to me, I'll show you an easy way to put it on the boxes.' Whereupon he proceeded to cut holes in a couple of pieces of stencil paper. One was a circular hole, about 5 1/2 inches in diameter, and the other was a part of a circle 5 inches in diameter. But it was a half circle with a jagged edge. Then he held the stencil to an amp and sprayed a circle of white paint. Then with one side up, the red half circle went on top of the dried white paint and after wiping off the red and turning the stencil over, the blue was applied. This was the first version, and we put it on to all our gear. It helped make it easier to find our stuff in the crunch. I still have an old toolbox with one of the stencils on it."