The Biggest Future Risk For Cannabis Operators: Lawsuits

cannabis business owner who believes it is only a matter of time before cannabis becomes federally legal, you also probably believe that competition from big pharma, big tobacco, or big alcohol will be your biggest worry when that day arrives. Or, you may think that the moment legalization happens, you have to sprint across state lines to grow quickly to defend your market share. Without minimizing any of these concerns, which I share, a much bigger risk, because it is not being discussed, is poised to jump you when you are not looking—this risk: being sued. Indeed, federal cannabis legalization may just turn out to be a massive feast for many litigator-specialist lawyers. This article is a call for cannabis operators to begin to plan for potential legal risks from within their organizations and to counter-intuitively plan for legal risk emanating from outside the company walls. When federal legalization arrives, cannabis will be a large and juicy target for lawsuits ranging from class action, intellectual property disputes, specific product liability, etc. In my opinion, it is inconceivable that lawsuits don’t spike and become a major expense and hassle for every cannabis company. A Legal System Built For ThisPlease remember that our legal system is a very efficient system which encourages the use of its services. And with regards to class-action lawsuits, all it takes is for a single complainant to be attached to a single lawyer for an industrywide suit to be filed on a supposed aggrieved class of consumers. In a lot of cases, class-action lawsuits are thought up, designed, initiated, and prosecuted by lawyers while the class is of secondary importance. All this spells potential trouble for your firm. In addition, multi-state product recalls, untrained budtenders dispensing advice which causes a perceived harm by a customer, the intentional mixing of distillate or flower from multiple farms (which is a no-no with regards to testing and product recalls), ambiguity as to why a flammable product (i.e., pre-roll, vape cartridge) emanates toxic fumes (potentially from unlisted added ingredients, porous metals used in the manufacture of the cartridge, or glue used in any product containing paper cones), and other ambiguous or nefarious activities all lay bare that liability can come for you from many directions. It is best to consider your pending liability as a “when” and not an “if.” Proactive DefensesThere are three steps (probably more given your particular situation) you can take now to mitigate and hopefully remove the lawsuit target on your back: 1) be careful what you document; 2) be consistent in how you deal with and other industry participants; and 3) always review any contracts you enter into with an eye to future problems. Anything you document can be subject to legal discovery later: this includes emails, text messages, hand-written memos, and any other form of physical or digital notes. Meaning, if you become a target of a lawsuit, regardless of its merit, you open yourself up to legal risk even if what you are originally being

More The Biggest Future Risk For Cannabis Operators: Lawsuits