Cannabis Industry

Our Approach

Cannabis-related businesses contend with the same challenges every business faces, complicated and amplified by a web of state and federal law specific to cannabis and hemp. Tonkon Torp helps clients solve complex business problems within the regulated cannabis and hemp industries. 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.
 
Tonkon Torp assembles teams of practice-area experts to meet the individual needs of each client. With regard to cannabis, hemp, and CBD, 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, hemp, and CBD 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. The group advises owners and operators as well as seed, angel, venture and other investors on all aspects of fundraising and investing in cannabis and hemp businesses.
 

Our Expertise

Cannabis, hemp, and CBD 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 the 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 clean-up, 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 cannabis, hemp, and CBD industry clients include licensed producers, distributors, processors, and retailers, as well as ancillary business, funds and investment managers, equipment manufacturers, and technology companies.
 

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.

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.

Hemp and the Pitfalls of the USDA’s Interim Final Rule

Despite regulatory uncertainty and increased competition, we continue to see explosive growth in the amount of hemp production in the United States, with the amount of total acreage increasing by approximately 550% since the passage of the 2018 Farm…
Read More

Tips on Looking for Funding for Your Cannabis Company

Funding a business with startup or growth capital is a universal challenge, but cannabis businesses face at least one unique hurdle in the continuing federal illegality of the industry. Aside from the difficulty in accessing banking resources…
Read More

Pre-Employment Drug Screening Policies Are Changing for Oregon Employers

While the use of cannabis is still illegal at the federal level, 33 states now allow medical use and 11 of those states and Washington, D.C. have also legalized recreational use.
Read More

Top 6 Ways To Protect a Cannabis Business Brand

As I previously discussed in my article and podcast published in the Portland Business Journal, U.S. federal trademark law does not currently extend to cannabis products. Because the required “use in commerce” of the cannabis plant and related…
Read More

Will Oregon’s Cannabis Industry Go Up in Smoke Due to COVID-19 Fallout?

As the nation rushes to slow the COVID-19 pandemic, the cannabis industry finds itself caught in the chaos like everyone else. However, there is one additional caveat for cannabis businesses — not one penny of the $2 trillion federal stimulus package…
Read More

Bankruptcy and Restructuring in the Cannabis Industry in 2020 and Beyond

While states continue to legalize cannabis, and the federal government continues to consider softening its stance, difficult questions persist at the intersection of cannabis and bankruptcy. As the cannabis industry continues to evolve in 2020 and…
Read More

What You Need to Know About Buying and Selling Products Containing Cannabidiol (CBD)

It seems as though products containing cannabidiol (CBD) are everywhere – in supermarkets, health food stores, gyms, even the corner convenience store. And CBD can come in almost every product, regardless of the shape or size: oil, toothpicks, dog…
Read More

3 New Employment-Related Laws in Oregon Impacting Cannabis Employers

New employment-related laws reflect a growing tolerance for an individual’s choices regarding consumption of cannabis and marijuana outside of the workplace. Nevada, for example, was the first state to pass a law that prohibits employers (with a…
Read More

5 Ways To Gain High Ground While Selling a Cannabis Company

Notwithstanding federal law, a sign of the maturing cannabis and CBD markets is the sharp rise in M&A activity to build scale and market share. Marijuana Business Daily notes that as of August 2019, 233 M&A transactions were completed in the U.S…
Read More

The Challenging State of Brand Protection in the Cannabis Industry

Trademark law in the U.S. protects “any word, name, symbol, or design, or any combination thereof, used in commerce” to identify one company’s goods or services from another, and to indicate the source of the goods or services. Protection is…
Read More

{{title}}

{{summary}}
Read More