 As the cannabis industry grows across the country, and fortunes are made, naturally, disputes will arise, and lawsuits follow.
Reuters news did a deep look at the type of lawsuits trending in the cannabis industry. They studied states where cannabis is legal, and looked at the most recent data, focusing on the first half of 2022. This sampling of lawsuits can give owner operators, employees, and investors an idea of things to be conscientious of while doing business. Reuters study found that the vast majority of all lawsuits, at just over one third, or 34%, revolved around commercial disputes. These include things like breach of contract, landlord-tenant disputes, securities issues, breach of fiduciary duty, and fraud. The next most common type of all lawsuits, at 21%, were from actions against state and local governments, such as issues around administration and regulation of a state's cannabis market, licensing disputes, disputes challenging the legality or constitutionality of a state's cannabis licensing regulations. Employment disputes made up 14% of all lawsuits. Unpaid tax collection were 10% of litigation filed. Intellectual property disagreements, particularly trademark infringement, were 9% of the total lawsuits. Consumer class actions brought in 5%. And antitrust disputes brought up the remaining, at approximately 2% of all suits filed. Reuters noted that a growing number of legal experts anticipate that as the market continues to mature, more types of lawsuits will arise. They say to be on the lookout for more suits regarding things such as product liability, in regards to improper labeling, or a defect in how something was marketed or manufactured. Experts say that the cannabis industry should also be prepared for an increase in FDA actions relating to violations of the Food, Drug, and Cosmetic Act. Earlier this year the FDA already issued more than a dozen warning letters to companies this year relating to the sale, labeling, and/or marketing of CBD products. The Cannabis industry is expected to continue to grow at an incredible rate, which only encourages more people to want to get into the business. As a natural result of numbers, lawsuits are bound to increase, as well. Staying aware of potential concerns and taking preventative cautions is one way to remain ready to keep your interests moving smoothly. Comments are closed.
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