Week in Review: Landmark lawsuit, disparate MJ polling & FL conference wrapup

By John Schroyer and Omar Sacirbey

A lawsuit in Colorado signals a new era for the cannabis industry, polling numbers in three states paint differing pictures, and business leaders gather for the Spring 2016 Marijuana Business Conference & Expo.

Here’s a closer look at several notable developments in the marijuana industry over the past week.

Here we go…

You had to know this was coming.

This week, a wrongful death lawsuit was filed in Colorado alleging that an edibles manufacturer and a marijuana retailer failed to provide warning about their product to a man who shot and killed his wife after consuming too much THC-infused candy.

The suit – filed in Denver – won’t shut down the industry, but it should persuade businesses to pay more attention to safety and compliance.

It ranks as possibly the first wrongful death lawsuit against the recreational cannabis industry, the Denver Post reported.

The lawsuit claims that Gaia’s Garden, the company that made the edible, and Nutritional Elements, the store that sold it, “negligently, recklessly and purposefully” failed to warn Richard Kirk about the candy’s potency and side effects, including psychotic behavior.

“There are a lot of comparable situations from other industries,” said Arun Kottha, an attorney with Tucker Ellis LLP in Ohio, who specializes in compliance counseling and wrongful death and product liability litigation.

The alcohol and pharmaceuticals sectors in particular battles these types of lawsuits.

There have been cases, for example, where liquor stores and bars have been successfully sued for selling alcohol to someone who later was involved in an incident. In those cases, however, the person who bought the alcohol was already intoxicated, and judges reasoned that businesses should not have sold the alcohol to the customer.

This case is different, Kottha said, because there was nothing to suggest that the killer was intoxicated or had the potential to do something violent.

Still, marijuana businesses should take steps to protect themselves. This includes taking out insurance policies, such as general commercial and product liability policies, and excess coverage policies, Kottha said.

For whom the poll tolls

Wildly differing polling numbers this past week in three battleground marijuana states tell an interesting story: The public is sold on medical cannabis, but the industry has more work to do in getting voters on board with recreational marijuana legalization.

Quinnipiac University released polls this week looking at where voters stand on MMJ in Florida and Ohio, while Suffolk University and the Boston Globe polled voters in Massachusetts on a probable adult-use ballot measure in that state.

In both Florida and Ohio – two important swing states in the presidential election – medical cannabis has the support of huge majorities, and it looks like those two states have a very good chance at legalizing MMJ this November.

But in Massachusetts, a rec legalization campaign could really go either way, with this week’s poll showing that there are slight more voters who are against it than for it.

Realistically speaking, what this means for the future of the marijuana industry is that while there’s a decent shot at federal reforms for medical purposes – such as Hillary Clinton moving cannabis from Schedule I to Schedule II if elected president – it could take a lot longer to truly “free the weed.”

With the acceleration of the industry’s growth in recent years, it’s easy to get frustrated with unjust and hard-to-fix situations, such as 280E. But it’s important to remember that reforms are coming, in large part due to the sea change in public perception on the medical benefits of marijuana.

Fun in the sun

The three-day Spring 2016 Marijuana Business Conference & Expo in Orlando generated a lot of buzz, with nearly 3,000 cannabis professionals swarming the Gaylord Palms Resort and Convention Center to trade business cards and industry stories.

Some highlights from the sessions:

  • During a discussion on the 2016 election and which states are most likely to legalize cannabis in some form this November, panelists agreed the most important target is the California recreational marijuana initiative supported by tech billionaire Sean Parker. Chris Walsh, the editorial director of Marijuana Business Daily, said recreational sales in California alone could surpass total retail sales from both medical and adult-use cannabis nationwide this year. Marijuana Policy Project’s Rob Kampia predicted that the rec campaign in Maine and the medical campaign in Ohio have very good chances, while Arkansas’ MMJ initiative is the one he considers least likely to succeed.
  • John Lord, owner and CEO of LivWell Enlightened Health in Colorado, said MMJ patients in the state are switching to recreational stores instead of renewing their medical registration cards. It’s simply easier to not go through the registration process and instead visit a rec retailer for cannabis and pay a slightly higher price.
  • “How would you feel if the grow that you were getting your cannabis from was irrigating its crop with water from Flint, Michigan?” said Cynthia Ludwig of the American Oil Chemists Society, during a panel on testing issues. Ludwig was addressing a lack of regulations when it comes to testing for toxins such as heavy metals, including lead.
  • “They’re not buying ounces … They’re buying eighths or quarters,” said Meg Sanders, the CEO of Mindful, another Colorado retailer. She was referring to a new customer demographic that’s older and more educated but typically purchases less but more often and commonly on impulse, the same way a person may stop at a liquor store for a bottle of wine after work.
  • The cost of transitioning from a medical marijuana industry to a recreational can differ by millions of dollars depending on what a business does or chooses to focus on. Shane McKee, a vice president with Rexroad Marquis, estimated his company has spent $6 million transitioning to the recreational industry. Karl Keich, a consultant who also owns a rec shop in Washington State, said he spent just $100,000 on the same transition, and most of that was for the permit application paperwork.

John Schroyer can be reached at [email protected]

Omar Sacirbey can be reached at [email protected]

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 8 Comments

  1. Michael May 13, 2016
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