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The Importance of Litigation Holds

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We regularly cover litigation on the blog, but today we’re going to cover how to prepare for cannabis litigation that may or may not come. And while it’s always important to have effective systems in place, it becomes even more paramount when our clients realize how involved the discovery process is in the American litigation system. If implemented properly, a proper litigation hold can save a lot of expense and headache down the line – for our clients and for us.

What is a litigation hold?

When a lawsuit is filed or – is even reasonably anticipated – the rules of civil procedure in both federal and state courts impose a burden to preserve all potentially relevant records and information. For example, Federal Rule of Civil Procedure (“FRCP”) 37(e) provides:

“(e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the

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How Important is the SAFE Banking Act, Anyway?

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I’m pretty sure that more ink has been spilled on the Secure and Fair Enforcement Act (“SAFE Banking”), than any other proposed cannabis law. It just won’t pass and it just won’t die. Specifically, SAFE Banking was introduced in 2017 and it passed the House seven times (seven times!) with bipartisan support since 2019. The public likes it too: here’s a November 2022 Data for Progress poll revealing that “By a +65-point margin, voters support ensuring that banks do not discriminate against legitimate marijuana-related businesses.” This bill should pass, right?

It’s getting closer. SAFE Banking will finally go to mark-up this week in the Senate Banking Committee. That Committee is preparing to vote before October 1, although what they’ll be voting on at this point isn’t entirely clear. (For some chatter on that, check out this Marijuana Moment piece from last Friday.) But let’s assume that SAFE Banking, after mark-up, holds onto its key tenets. It would prevent federal banking regulators from:

prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business); terminating or

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Employment Law Issues for Struggling Businesses

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We all know the Oregon cannabis industry is struggling. We write often about the causes on a macro level, possible solutions, and what we see as business litigators. We haven’t written much about one of the basic areas of employment law that applies to Oregon marijuana businesses: workers rights to wages and employer responsibilities. As marijuana businesses shutter, employees and employers should pay careful attention to Oregon’s wage laws. This post addresses basic things marijuana employees and employers ought to know about paying wages when employment ends.

No formal contract is required to create an employment relationship

There is no requirement under Oregon law for a formal contract to establish an employment relationship. As long as the ordinary elements of contract formation are present an employment relationship exists. Usually this means that the person for whom the service is performed (employer) agrees to have another perform the service (employee) for a certain remuneration (wages). And where the putative employer has a right of control over the services provided by the putative employee.  Typically this boils down to compensation and right-of-control.

When these elements are present an employer’s promises of wages and benefits are binding. On the flip side, the general

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New York Proposes Tough Legislation for Unlicensed Cannabis Retailers

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New York State budget talks are hung up on how to curb an onslaught of unlicensed cannabis retailers. It is self-evident that these illicit weed joints are hurting the ability for the cannabis industry to begin and grow. However, until there are more legal shops that compete with the illegal stores, it seems the State cannot shut them down or drive business into the regulated market. Lawsuits such as the one we recently covered by New York City against unlicensed operators and their landlords don’t seem to have not deterred most operators.

Huge fines proposed for unlicensed cannabis retailers

While the State issues additional condition adult use retail dispensary licenses, Gov. Kathy Hochul proposed legislation weeks ago to empower state agencies to increase fines on illegal sites from a paltry $250 to as much as $10,000 per day. State agencies would also be allowed to shutter the illegal cannabis stores for good. Mayor Adams previously complained that $250 was paltry and a mere slap on the wrist.

State senators showed they are devoting more legislative energy to the topic by commemorating the so-called “4/20” pot holiday April 20 with the establishment of a new subcommittee focused on cannabis issues.

Law enforcement

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