The Surge in Cannabis Litigation: Strategies To Navigate and Protect Your Business from Costly Lawsuits

Eric Berlin, Partner | Dentons US LLC

Eric Berlin leads the US and global Cannabis teams at Dentons, the world’s largest law firm. Widely recognized as one of the nation’s leading authorities on cannabis and hemp law, Eric dedicates 100 percent of his work to clients involved in, or impacted by, the legal cannabis or hemp industries. He has worked on some of the industry’s biggest deals and counsels several of the top companies in the cannabis ecosystem. Eric’s own involvement in this area goes back more than a decade, when he worked pro bono with legislators and other interested parties to help draft and pass legislation creating medical cannabis programs in Illinois and Ohio.

Eric has represented large, publicly traded companies that sell products or services to the cannabis industry, companies involved in financing the industry, vaporizer manufacturers, testing labs, cultivators and processors, and dispensary operators.

Additionally, Eric has also represented non-cannabis industry clients in high-profile healthcare and antitrust litigations. Some of his successes include a trial in a $2.3 billion Sherman Act and Robinson- Patman Act case; a False Claims Act case against major pharmacies; a bundling antitrust case against a large medical distributor; an international arbitration between agricultural companies; and appeals in the US Courts of Appeals for the Sixth, Seventh, Ninth and Tenth Circuits.

His groundbreaking efforts for businesses and industry organizations have been well recognized. Eric is ranked in Tier 1 for Cannabis Law by Chambers USA, earned “MVP of the Year in Cannabis Law” by Law360 in 2020 and 2022, and was named a “Leading Lawyer in Cannabis” by The Legal 500 US in 2021.

Jeff Zachman, Partner | Dentons US LLC

Jeff is a member of the Litigation and Dispute Resolution team and focuses his practice on insurance defense, technology, and general commercial litigation. Mr. Zachman also has extensive experience litigating insurance coverage, consumer, and statutory class actions in state and federal court.

Jeff has defended major insurance carriers in high profile class actions and individual litigation across the country. He has specialized experience in diminished value coverage cases and life insurance coverage disputes.

Prior to joining Dentons, Mr. Zachman clerked for the Honorable Thomas W. Thrash. While in law school, Mr. Zachman was one of Dentons’ Summer Associates where he researched legal issues and drafted documents in litigation, bankruptcy, and corporate practice.

Mr. Zachman earned his BA, graduating magna cum laude, in Political Science and History from Duke University in 2007. He later earned His JD, graduating magna cum laude, from the University of Georgia School of Law in 2010, where he was also elected to Order of the Coif.

I. The Current Landscape of the State Legal Cannabis and Hemp Industries | 1:00pm – 1:30pm

• Cannabis/marijuana vs. hemp
• State-legal cannabis
• State-legal hemp
• Federal status and likely future

II. The Rise in Cannabis Lawsuits | 1:30pm – 2:00pm

• Main Topics/Claims
  • License disputes
  • Regulatory actions
  • Owner/shareholder/partner conflicts
  • Investors and securities actions; lender actions
  • Contract disputes – product/service vendors, customers,
  • Intellectual property (IP) infringement/defense – patents vs. trademarks
  • Employment/labor cases
  • Consumer and product liability claims, including advertising/labeling claims
• Primary Causes
  • Lack of attention to legal matters or future risks
  • Poorly drafted contracts
  • Lack of compliance with evolving regulations & federal laws still apply
  • Distressed companies and financial instability
  • Overly aggressive business policies

Break | 2:00pm – 2:10pm

III. Evaluating the Worth of Cannabis Lawsuits | 2:10pm – 2:40pm

• Upside – value of recovery, likelihood of prevailing
• Downside – estimated duration, legal fees, costs, and time commitment
• In Court Challenges
  • Void or unenforceable due to federal illegality
  • Lack of industry understanding and/or acceptance among jurists
• Insurance Coverage
• Collectability of Judgment

IV. Strategies to Protect Your Cannabis Business from Litigation | 2:40pm – 3:10pm

• Thoughtful and Proactive Legal Strategies and Procedures
• Proper Licensing/Attention to Changes of Financial Interest Holders
• Strong, Clear Contracts; Contract Reviews
• Regulatory Compliance – policies, procedures, monitoring/audits, record keeping
• Employee Policies, Procedures, Training, and Monitoring
• Quality Control Procedures
• IP Protection
• Alternative Dispute Resolution (ADR) and Venue
• Insurance Procurement and Coverage
• Thorough Due Diligence of targets, vendors, etc.
• Building strong relationships, including with regulators and other stakeholders