As the cannabis industry continues to mature, both in New York and in the United States more broadly, litigation is becoming both more common and varied in the industry. Last year, Carter Ledyard & Milburn analyzed cannabis-related cases filed within the first half of 2022, specifically focusing on civil litigations commenced in states that legalized adult-use (or recreational) cannabis. Now, nearly a year later, a handful of additional states have followed suit in legalizing recreational cannabis. In this article, they focus on what has changed and what trends have stayed the same.
The results of the updated analysis largely track last year's findings, with a few notable exceptions.
Once again, the most common category of dispute appearing in the analysis is what is classified as commercial disputes, which include actions for breach of contract, collections on outstanding loans, securities issues, and other business torts, such as breach of fiduciary duty and fraud. Roughly 37% of the cases in their updated dataset were identified as commercial disputes — up slightly from the 34% found in their initial analysis.
While a significant portion of the commercial disputes in their dataset were commenced in mature markets, such as California and Oregon, there were a number of these types of cases commenced in new and emerging markets, particularly New York. This trend is expected to continue, especially as new markets come online in those states that have only recently legalized adult-use cannabis and as older markets continue to mature and (in some instances) become overly saturated.
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