Included in this month’s inaugural issue of the Journal on Emerging Issues in Litigation, published by Fastcase Full Court Press, is an article co-authored by MoginRubin’s Jennifer M. Oliver and Denton’s Ausra Deluard on competition law in the cannabis industry.
“You have heard the cliches,” the piece begins, “legalized cannabis is the wild west, a new frontier, a modern-day gold rush. It is an exciting and blossoming industry, to be sure, but regulations are nascent and compliance is both complex and costly. Licensed operators face numerous challenges. Here are just a few: onerous federal tax interpretations that prevent expense deductions; state and city taxes and licensing fees; lack of banking options and the ability to use credit card networks; strict regulations that limit advertising and marketing efforts; stringent testing standards to prevent the use of harmful pesticides and other chemicals; and evolving rules and interpretations.”
While many industries deal with competition from the world of crime, cannabis companies face a type of competition most industries do not — drug dealers.
“Black and gray market competitors avoid many of these challenges, thus increasing their competitive advantage to the detriment of legitimate cannabis operators. As the State of California’s Cannabis Advisory Committee has reported, ‘fragmented and uncoordinated’ enforcement has allowed the black market to flourish, ‘threatening licensed business with unfair competition.’ But, state and local enforcement is hampered by a lack of resources. And that is where private plaintiffs can play a key role.”
Read more. Clearing the Haze: State Laws Critical to Preserve Competition in Cannabis” Download a PDF of the article now and don’t hesitate to reach out with questions. Contact us.
Listen more. Jennifer Oliver and Ausra Deluard are also featured on the new Emerging Issues in Litigation Podcast. Listen below.