Cannabis Litigation, Part 4: It’s Just Business

The hard truth is that your canna-business is going to get embroiled in litigation sooner or later. Whether it is a dispute among partners, a dispute with a supplier or a commercial landlord-tenant dispute, the regulatory framework around cannabis will change how your business approaches litigation. With that in mind, we intend to expand our current series on cannabis IP litigation (here, here, and here) into litigation of all kinds. Today we will begin with a bit of general information about dispute resolution in these Litigious States of America.

Litigation is not a pleasant experience. It is expensive, time-consuming and incredibly invasive. Even the smallest dispute can cost tens of thousands of dollars to resolve. Once you are in a lawsuit, your opponent will have the legal right to demand you turn over all documents, emails, text messages, recordings, and records tangentially related to the legal and factual issues in dispute (usually defined as “reasonably calculated to lead to the discovery of admissible evidence”). Your lawyer will ask you to dig through your old physical records, computer files, emails, and text messages for anything that could be relevant. This will usually lead to every judge’s least favorite part of litigation: discovery disputes.

Once the lawyers finish sparring over what documents will or will not be turned over, you will experience the unique joy of a deposition. In today’s practice, it is a near certainty you will be required to sit in a room for up to seven hours (and in some states, even longer) while your opponent’s attorney questions you under oath, trying to dig out from you every bit of information you may have and/or to catch you in a lie. You will be asked questions about conversations and documents you haven’t thought about in years, and whatever you say can and will be used against you.

Though most civil disputes end up settling, there is always a chance your case will go all the way to trial. And if you thought your deposition was unpleasant, you will realize that is nothing as compared to the trial. Everyday you will spend hours in a courtroom, only to go back to your lawyer’s office at night to prepare for the next day. And at the end of it all, you will ultimately be subject to the whims of a jury of your peers who can sometimes be more persuaded by emotion than by the facts or the law.

In light of the financial and emotional burden of litigation, it is critical your litigation decisions focus on what is best for your business. Litigants do not benefit by making decisions based on emotion. To help you make those decisions, this series will address some of the common questions and misconceptions our cannabis litigation team sees/hears so often from our own cannabis clients about litigation, and specifically litigation in the cannabis industry.

Check in next week when we discuss one of the biggest areas of potential frustration with litigation: timing.