Cannabis Law Group's Medical Marijuana Legal Blog
California Cannabis Company Wins Industry’s First Anti-Trust Case
The cannabis industry’s first anti-trust case to reach trial was decided in favor of pot shop owners who alleged they’d been illegally edged out of the market by a would-be competitor’s unfair business practices. Jurors awarded $5 million (tripled to $15 million under the Cartwright Act) plus attorney’s fees. 
In Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, an independently-owned dispensary, RCCC, in Contra Costa County, sued the owners of the Richmond Patients’ Group (RPG) over allegations of conspiring to block RCCC from opening a new shop. Evidence presented at trial included evidence the defendant impeded access to the finite amount of commercial property zoned for medical marijuana distribution.
Plaintiffs argued the defendant, a potential competitor, intentionally thwarted their opportunities by submitting fraudulent letters of intent, leases, and purchase agreements to landlords of commercial properties, effectively tying up those spaces until RCCC’s permits became expired. (Local ordinance in Richmond, Calif. requires cannabis shop permit holders open up a shop within six months or lose their permit.) The defendants reportedly even went door-to-door, trying to persuade landlords to avoid leasing to RCCC. Defendants also made efforts to compel a change in city ordinance that would reduce the number of cannabis permits available (in this, they were successful). RPG was also accused of trying to influence city officials to deny RCCC’s licensing permit.
As our Los Angeles cannabis attorneys can explain, trying to compel a change in local ordinance or state law isn’t illegal. But the plaintiffs underscored it as evidence of the defendant’s purpose and intention with regard to the other actions.
RCCC alleged RPG’s efforts ensured they were closed off at every turn by RPG’s actions and eventually lost their permit – and millions of dollars in investments and potential profits. This, they allege, was in direct affront to the California Cartwright Act, the state’s antitrust law prohibiting efforts to block fair competition in the free market. Continue reading
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Three separate law suits have been filed, alleging that a Californian-based marijuana company and its key executive defrauded $1.2 million in loans from investors.
Arroyo Verde farm, owned by Barry Brand in Carpinteria, was considered a prime example of how a legal cannabis business could flourish under close regulation from Santa Barbara County. Then in January, a sheriff-led raid of the farm found evidence to suggest the farm was not only selling licensed products, but also selling products on the illicit market too.
Sacramento, California could lead the way in showing other cities throughout the state how to institute new, and broaden existing, marijuana social equity plans.
The state of California has now permitted the legal use of marijuana for two years. And tax dollars collected from the cannabis industry are already showing great impact across a variety of sectors.
California Vape Manufacturer, Kushy Punch, has been accused of operating both legal and illegal cannabis operations, according to state authorities. On October 3, state officials followed a tip to a warehouse in Canoga Park, where a raid turned up an illegal manufacturing operation seemingly run by the well-known state-licensed company, Kushy Punch.