We offer cannabis industry clients a distinctive combination of business and industry-specific knowledge to help investors, owners, and operators form and sustain successful businesses.
Cannabis-related enterprises looking to scale face particular challenges complicated by a web of state and federal law specific to their industry, in addition to contending with the same everyday challenges of all businesses. We provide tailored legal solutions for every stage of a regulated-product business, from production and distribution to sale, helping clients achieve financial and structural growth while mitigating the unique risks inherent to their industry.
Our Cannabis Group is a full-service business practice offering comprehensive counsel to entrepreneurs and companies of all sizes and at all life-cycle stages. We stay ahead of the curve, anticipating changes in the regulatory landscape to keep your business compliant and competitive, while we work to identify strategies and solutions to help you achieve financial and structural growth. When it comes to licensing, compliance audits, or high-stakes litigation, we’ve been behind-the-scenes power players enabling our clients to thrive.
We work with investors, real estate services, growers, manufacturers, retailers, and service providers to provide a full suite of legal services in a byzantine regulatory environment with rapidly changing laws.
Regulation and Compliance
The ever-changing legal landscape that governs regulated substances requires highly experienced counsel. Our team advises clients on their responsibilities under the Oregon Liquor & Cannabis Commission and other local, state, and federal regulations. This includes guidance on obtaining and renewing licenses, navigating compliance audits, and ensuring that all aspects of the business—from labeling and marketing to distribution and sales—adhere to the latest legal standards. We help our clients stay ahead of regulatory shifts, reducing the risk of non-compliance and positioning them for long-term success.
Formations
Advising businesses within highly regulated arenas requires careful planning and precise execution. We assist clients in structuring new businesses, ensuring that they are set up for profitability and growth from the outset. This includes advising on the best legal structures, securing necessary licenses, and navigating the complexities of mergers and acquisitions. For companies facing financial difficulties, we provide strategic counsel to restore profitability, protect valuable intellectual property, and manage the transfer of operational licenses. Our goal is to create a strong foundation that supports both immediate and long-term business objectives.
General Business Guidance
Operating a business in the cannabis sector includes a unique set of challenges that extend beyond regulatory compliance. Our team provides ongoing advice on a wide range of business matters, including labor and employment law, drafting and negotiating transactional agreements, and maintaining strong corporate governance. We also guide clients through complex shareholder relations, franchising opportunities, and potential conflicts of interest, ensuring that their businesses are not only compliant but also efficient and poised for growth.
Litigation and Dispute Resolution
In industries as tightly regulated as cannabis, disputes are almost inevitable. We work proactively to minimize legal risks, but when conflicts do arise, we are prepared to vigorously defend our clients’ interests. Our litigation and dispute resolution services are designed to protect our clients’ profitability and competitive advantage. Whether through negotiation, mediation, or litigation, we aim to resolve disputes swiftly and effectively, with a focus on maintaining business continuity and protecting our clients’ reputations.
Other Specialties
The unique nature of the cannabis industry means that businesses often face complex challenges related to real estate, land use, and taxation. We provide specialized advice on real estate transactions, such as helping clients navigate land-use regulations that can impact their operations. Additionally, we offer tax planning and advisory services tailored to the specific needs of businesses in the regulated-substance space. Our deep understanding of these areas ensures that our clients can operate efficiently and profitably, even in the face of stringent regulatory requirements and complex tax obligations.
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Case Studies
Tonkon Torp Wins Arbitration for Cannabis Farm Manager
Tonkon Torp has secured an award of $647k for a cannabis farm management company based on its work in 2017. 2017 was the first year a large number of outdoor cannabis farms were licensed by the OLCC. This combined with favorable weather conditions resulted in a record bumper crop, and the wholesale price of sungrown cannabis dropped by more than half.
Tonkon Torp Wins Dismissal of RICO Claims Attacking Cannabis Industry – First of its Kind in 9th Circuit
Tonkon Torp secured a dismissal of civil RICO claims filed in federal court based on defendants’ involvement in an Oregon Medical Marijuana Program grow operation. Four civil RICO cases have been filed this year in Oregon against nearly 300 businesses and individuals engaged in state-authorized cannabis activity.
Representative Matters
Breach of Contract
Obtained favorable settlement for landowner who provided land and financing for OMMP cannabis production operation after the grower failed to share profits as agreed.
Civil RICO
Obtained dismissal of civil Racketeering Influenced & Corrupt Organizations ("RICO") Act claims asserted in federal court based on our clients' state law-compliant medical marijuana activities.
LLC Member Dispute
When majority owners tried to squeeze Tonkon Torp's client out by forcing sale of the land where the company planned to obtain an OLCC cannabis producer's license, Tonkon brought counterclaims for minority oppression and obtained a settlement where Tonkon's client obtained all of the majority's interest in the company and the land.
Reverse Takeover of Grown Rogue International, Inc.
Tonkon Torp represented its client, Grown Rogue Unlimited, LLC, a vertically integrated cannabis brand, in its reverse takeover of Novicius Corp. (now known as Grown Rogue International, Inc.), a publicly traded company in Canada. Tonkon Torp advised Grown Rogue on Oregon and United States matters pertaining to the transaction, including tax, securities laws, corporate governance, and Oregon Liquor Control Commission licensing and approval processes. Tonkon Torp also advised Grown Rogue with respect to non-brokered private placements in anticipation of the reverse takeover transaction.
Sale of Form Factory, Inc.
Tonkon Torp represented its client, Form Factory, Inc., a retail cannabis processor, in all aspects of its sale to Acreage Holdings, Inc., a publicly traded company in Canada, in an all-stock merger transaction valued at $160 million. The transaction was extremely complicated and included Oregon Liquor Control Commission licensing and other regulatory issues, complicated Delaware statutory structures, Canadian securities law considerations, complex subsidiary ownership and joint ventures, and numerous third parties.
Shareholder Dispute
When outside investors flexed their power to terminate the founder of a vertically integrated Oregon cannabis company and maneuvered to make her shares worthless, Tonkon Torp brought claims for breach of fiduciary duty and shareholder oppression, ultimately obtaining a favorable buy-out for Tonkon's client.
Successful Business Exit Through Stock Sale
Advised and represented the owners of a hemp processing business in the sale of all issued and outstanding shares of the company to a buyer looking to acquire the operations of the business and related branding.
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We encourage you to contact us if you have further questions about our firm or our experience. For your protection, we cannot represent you until we know that doing so will not create a conflict of interest. Accordingly, please do not send us any confidential or secret information about any matter that may involve you until you receive a written statement from us that we represent you (an engagement letter).
If after browsing this web site you are unsure which lawyer you should contact, please call us at 503.221.1440.