Canna Law Blog suggests companies aren’t prepared for the embarrassing revelations which can accompany litigation:
“What makes the risk of publicity all the more problematic is the potential for rule violations to come to light. Given the fact that all state-level cannabis regulations are murky and complicated, it is understandable that some companies may not have strictly complied with the rules. That may come out in discovery. What also may come out in discovery are the internal conversations about those rule violations. Imagine an email chain where the owners of a company talked about, acknowledged, and agreed to sweep under the rug a severe rule violation. That could be part of the record in litigation.”
While not all the details emerged from litigation, in October WeedWeek documented Colorado start-up Ebbu’s promotion of an investment structure that may have violated state law. Colorado authorities have repeatedly declined to comment. Canopy Growth, which acquired Ebbu’s intellectual property, has also declined to comment.