Tonkon Torp helps clients solve complex business problems within the regulated cannabis industry.
The attorneys in the Cannabis Industry Group bring a combination of deep business expertise and cannabis-specific knowledge and experience to help owners and operators form and sustain successful businesses in this emerging category.
Our Approach
Cannabis-related businesses contend with the same challenges all businesses face, complicated and amplified by a web of state and federal law specific to marijuana and hemp.
Tonkon Torp assembles teams of practice-area experts to meet the individual needs of each client. With regard to cannabis businesses, this includes providing a full suite of legal services in a byzantine regulatory environment with rapidly changing laws.
Our Cannabis Industry Group is a full service business practice that works with entrepreneurs and companies of all sizes and at all life cycle stages. We work to identify strategies and solutions to help our clients achieve financial and structural growth, all while keeping a keen eye on the special risks and liability considerations inherent in a newly regulated industry.
As cannabis companies mature and evolve, Tonkon Torp’s expertise in corporate governance, business formation, mergers and acquisitions, real estate, business litigation, tax, and other specialties provides continuity in the client/legal advisor relationship. We advise owners and operators as well as seed, angel, venture and other investors on all aspects of fundraising and investing in cannabis businesses.
Our Expertise
Cannabis ventures come with a built-in set of complexities, and our clients in these categories benefit from our firm’s multidisciplinary expertise in business law and dispute resolution.
Structure, Formation & Contracts — Advise on corporate ownership, control, and management issues such as entity formation, tax planning, and executive compensation. Contract drafting and negotiation, licensing, and compliance
Fundraising — Negotiate and document private and public capital solutions for startup, ongoing operations, and business expansion
Labor & Employment — Promote positive employee relations, protect competitive positions, deal with union activity, and defend against or minimize exposure to employment litigation
Taxation — Structure businesses and transactions to minimize tax liability while ensuring compliance with various local, state, and federal tax regimes, including 280E considerations
Intellectual Property — Develop and execute strategies for registering, protecting, and leveraging intellectual property assets including trademarks, copyrights, trade secrets, and patents. Defend IP disputes through negotiation, litigation, mediation, or arbitration
Business and Commercial Litigation — Resolve business disputes in and out of court, including contract disputes, owner disputes, business torts, product liability claims, regulatory/administrative disputes, civil RICO claims, and real estate disputes
Real Estate & Land Use — Acquisitions, land use approvals, and compliance with enhanced zoning requirements for cannabis-related use, environmental cleanup, and leasing of cultivation, distribution, manufacturing, and retail facilities
Compliance — Manage compliance and develop and implement best practices and long-term strategies to minimize regulatory burdens and risk
Mergers & Acquisitions — Represent public and private companies as buyers, sellers, and targets. Experience in acquisitions, divestitures, spin-offs, control and proxy contests, reorganizations, and joint ventures
Government Relations — Monitor and participate in legislation related to cannabis business operations
Our Clients
Our marijuana clients include licensed producers, distributors, processors, and retailers, as well as ancillary businesses, funds and investment managers, equipment manufacturers, and technology companies.
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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.
Services + Industries
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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).
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