Berrin Noorata The court agreed. Already a subscriber? Currently, that would not include marijuana products. While most of the product liability and consumer fraud litigation has taken place in the hemp industry, the marijuana market has not been entirely immune. Participating Rounds. 2017-11-14, Los Angeles County Superior Courts | Labor | The plaintiff countered that because the object of the agreement was marijuana (illegal under federal law), no contract was formed. Phone Number (707) 757-7880. WebFounded Date 2018 Operating Status Active Phone Number (707) 757-7880 Left Coast Ventures is a company specializing in cannabis cultivation, manufacturing, distribution, and brand-building. Calivas plant-based solutions serve over 1 million customers and are designed to fit any lifestyle. Cannabis laws vary from state to state. In the nascent industry where licenses are highly coveted and hard to come by, individuals and businesses have been willing to invest in litigation as a means of securing their proverbial piece of the pie. With renewed momentum for SPACs this year, the recent ruling is definitely a reminder that even innovative SPAC deals in cutting-edge industries are subject to the same old Delaware law. In the world of civil litigation involving the very young cannabis industry, the laws are still developing, so there are unknowns. Left Coast Public Records Policy. 2019-12-02, Los Angeles County Superior Courts | Contract | SCAC undertakes no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. Founded by Michael Auerbach and led by Chief Executive Officer, Leland Hensch, SCAC is dedicated to investing in radical companies whose core missions subvert the status quo. The machine also features a drone onboard that can be launched while driving. According to the news release, Caliva and Left Coast Ventures expect combined pro forma revenues of $185 million in 2020 and $334 million in 2021. The Roc Agreement will be effective as of the consummation of SCACs qualifying transaction and will remain in effect for an initial period of three years, provided that The Parent Company and Roc Nation may elect to extend the term for an additional three years upon terms to be mutually agreed. Docket Entry: Order of Dismissal; Book/Page: 32576:3524; Event Type: Event; Comments: WITH PREJUDICE Parties: Left Coast Ventures Inc. Docket Entry: Stipulation for Dismissal; Event Type: Event, Docket Entry: Order:; Event Type: Event; Comments: GRANTING RESPONDENT LEFT COAST VENTURES, INC. S MOTION TO ENFORCE SUBPOENAS AND TO COMPEL PRODUCTION OF DOCUMENTS, Docket Entry: Motion for Extension of Time; Event Type: Event; Comments: Parties: Colleen Lynn Smeryage; Plant Life Apothecary LLC; Kohen Elad; Duchman Dovid, Docket Entry: Order:; Event Type: Event; Comments: GRANTING MOTION TO ENFORCE SUBPOENAS AND TO COMPEL PRODUCTION OF DOCUMENTS, Docket Entry: Notice:; Event Type: Event; Comments: RE-DISCOVERY DEADLINE IN WASHINGTON ACTION, Hearing Info; Description: Motion Calendar; Hearing Code: MOTCAL; Hearing Time: 9:30AM, Docket Entry: Motion Calendar; Event Type: Hearing; Comments: RESPONDENT'S MOTION FOR STATUS CONFERENCE, Docket Entry: Notice of Hearing-; Event Type: Event; Comments: 05/04/2021, Docket Entry: Response to Motion; Event Type: Event; Comments: TO QUASH FOR PROTECTIVE ORDER REGARDING SUBPOENAS SERVED NON-PARTIES, Docket Entry: Order:; Event Type: Event; Comments: GRANTING VERIFIED MOTION TO APPEAR PRO HAC VICE. Although Washington law governs the breach of contract claim, where it is alleged that an agreement violates a federal statute, courts look to federal law. Polk v. Gontmakher, No. By Seth A. Goldberg and Justin M. L. Stern Cannabis plants grow in the greenhouse at the MG Health Ltd. growing facility in the South African country of Lesotho. up to approximately 3.9 million additional SCAC Common Shares (subject to certain reductions on account of the Private Placement, the Caliva Earnout Shares) if the aggregate consolidated cash of SCAC, at closing, net of short term indebtedness, is less than $225.0 million, in which case a proportionate number of Caliva Earnout Shares would become payable based on whether The Parent Company raises cash proceeds to cover such shortfall in the 12 months following closing and whether the weighted average price per share for any equity securities used to raise such cash proceeds is below $10.00 per share. Holding. Finally, deals among businesses are generally governed by agreements; as such, in these types of situations, companies are given the opportunity to take prophylactic measures (such as crafting provisions on dispute resolution, choice of law, and venue) that are unavailable in the absence of a contractual relationship. A developer sued the city of La Habra for more than $100 million last week for blocking the conversion of an unprofitable golf course into a 443-home housing and The combined entity has been simply DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Smart car technology companyEcarx Co., whose backers includeZhejiang Geely Holding Group Co., is considering seeking a U.S. listing via a merger with a blank-check company. The SCAC Notes will contain customary events of default and covenants restricting SCAC from incurring additional indebtedness or granting security without the prior approval of the holders of the majority of the principal amount of the SCAC Notes. Eaze argued the case did not belong in court, as the plaintiffwhen she signed up for the appagreed to a mandatory arbitration provision. Please see our Privacy Policy. The affiliate of Mr. Carter will enter into a lock-up agreement upon closing of the Transaction restricting sales of SCAC Common Shares for six months after the closing of the Transaction. Focused primarily on complex litigation in heavily regulated industries, he routinely provides strategic advice to manufacturers, distributors, and retailers of cannabis-derived products. Law360 takes your privacy seriously. +1 215 979 1175 A transaction features a potential PIPE, and could value the combined entity at more than $700 million. The Sponsor has also agreed to forfeit to SCAC (i) approximately 0.6 million SCAC Common Shares on closing of the Transaction, and (ii) a number of SCAC Common Shares equal to any Caliva Earnout Shares issued to the Caliva shareholders. +1 215 979 1175 Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond SCACs control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. A federal appellate court disagreed, stating in no uncertain terms "employers are not excused from complying with federal laws just because their business practices are federally prohibited.". In some cases, having adequate insurance can mean the difference between solvency and bankruptcy. Cases involving stockholder rights and actions (direct and derivative actions), Infinity Global Consulting Group, Inc. et al v. Left Coast Ventures, Inc. et al, (#1) Clerks Notice to Filer re: Electronic Case. No further entries will be made on this case. Dkt. v. Woodstock Products Co. International Inc., et al., SDNY 1:18-cv-01840-RWS, a team of Duane Morris lawyers led by Seth Goldberg represented a cannabis-infused products manufacturer in a trademark infringement lawsuit brought by the founders of the Woodstock Music & Arts Festival of 1969 concerning the rights to the "WOODSTOCK" trademark in connection with cannabis-related products.). 2:19-CV-00686 | 2019-05-08, Florida Dade Court System | Contract | WebLeft Coast Ventures Venture Capital and Private Equity Principals Santa Rosa, CA 1,584 followers Left Coast Ventures is Shaping the Future of Legal Cannabis in the U.S. The Defendants sought to dismiss the case in its entirety based on a federal illegality defense, but the court ruled that a complete dismissal would discourage parties from complying with state cannabis regulations. Chris Akelman, Partner at Fireman Capital Partners (FCP), said: Caliva and Left Coast Ventures are two proven cannabis operators, and California is an incredible market with a huge opportunity for consolidation. Wholly owned, licensed, and/or distributed brands within the Left Coast Ventures portfolio include Marley Natural, Mind Your Head by Mickey Hart, Mirayo by Carlos Santana, JEF, SoulSpring, Provault, Chill, Headlight, Get Zen, New Frontier Brewing, and Yummi Karma/High Gorgeous. Its unclear, for example, whether Eazes argument in favor of arbitration would have fared as well as it did were the case heard in another jurisdiction. The proposed class action was filed Tuesday in Delaware Chancery Court by former common stockholders of Left Coast Ventures Inc., a cannabis company that spun off from Privateer Holdings Inc. Im proud of FCP's role and confident that The Parent Company will go on to build industry-leading brands in the cannabis space.. Polestars new machine is only a concept and not available for sale. Last week, federal Judge Marsha Pechman sent an ominous signal regarding the enforceability of cannabis contracts by issuing an Order to Show Cause, in which the parties have to show why the court should not dismiss the case. Left Coast Ventures Former Investors. The case, Left Coast Ventures, Inc. v. Bills Nursery, Inc. (case no. All industries are dependent on commercial relationships, such as arrangements between firms regarding product development, supply and distribution, and sales and marketing. Helix argued Kenney was not entitled to the protections of the FLSA because marijuanathe industry in which Helix operatesis unlawful under federal law. This dismissal would not be precedential, but it would send a strong signal about how federal courts will treat contracts concerning cannabis. Law360 may contact you in your professional capacity with information about our other products, services and events that we believe may be of interest.Youll be able to update your communication preferences via the unsubscribe link provided within our communications.We take your privacy seriously. Consumer-oriented product claims arise when product consumption or use allegedly causes some type of injury. That said, it is still a good idea to include provisions in contracts acknowledging the federal illegality of cannabis, including a covenant that the parties agree not to raise the argument of enforceability in litigation. Subversive Capital will then acquire both Caliva and Left Coast Ventures for $282.9 million and $142.2 million, respectively. On Monday, Vice Chancellor Morgan Zurn refused to dismiss alawsuit by shareholders of Left Coast Ventures Inc, a privately-held cannabis company that was acquired in 2021 by Subversive Capital Acquisition Corp. Subversive subsequently partnered with entrepreneur Shawn Carter, better known as Jay-Z, to form The Parent Co, which bills itself as Californias leading cannabis business. First, cannabis operators (cultivators, manufacturers, distributors, and retailers) and ancillary businesses who cater to them should take quality control (QC) seriously. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. U.S. COURT OF APPEALS 19-35952 D.C. No. Finally, its also a good idea for companies operating in the cannabis spacelike those in any other consumer-facing industryto maintain adequate lines of product liability insurance to help mitigate the costs of expensive litigation in the event a lawsuit develops. Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). What may be the most noteworthy about the cases discussed above is whatsunremarkable about them: In each of the three cases (two federal and one state), the court did not abstain from enforcing the parties contractual obligations solely because the contract at issue pertained to marijuana. Explaining a federal court cannot grant a remedy that, in effect, mandates illegal conduct, the court dismissed the complaint. InWilliams v. Eaze Solutions, for instance, the plaintiff argued Eazewhich operates a mobile application to facilitate the delivery of cannabis products from dispensaries to consumersviolated the Telephone Consumer Protection Act (TCPA) by sending repeated, unsolicited text messages. Consumer claims are common in all consumer-products industriesparticularly the pharmaceutical, tobacco, and automotive industries. With its advanced infrastructure, industry leading operational efficiencies, proven strategy of brands, and cultural influence, The Parent Company is expected to be best positioned for the inevitable end of cannabis prohibition in the United States., Steve Allan, who will become The Parent Companys CEO following closing of the Transaction, said: In addition to building the most influential portfolio of cannabis and hemp brands in the world, The Parent Companys vertical operational platform has been designed for growth and future mergers and acquisitions, forging a path to redefine the cannabis industry in California.. Consequently, lawsuits may be more challenging for litigants, and thus potentially more disruptive and costly. To embed, copy and paste the code into your website or blog: Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra: [Ongoing] Read Latest COVID-19 Guidance, All Aspects, [Hot Topic] Environmental, Social & Governance. While parties may want to include provisions restricting the ability to invoke the federal illegality defense as an added layer of protection, a key takeaway from the cases explored above is, as a general proposition andwith a number of caveats, it appears as though courts have been willing to entertain contractual disputes concerning marijuana businesses. Seth A. Goldberg Ultimately, the court granted a permanent injunction in favor of Tapatio, though that ruling was predicated on the defendants default in the litigation. April closed out the month having priced just one SPAC IPO with Ares Acquisition Corp. IIs upsized $450 million offering. Often, the suits charge the product was designed or manufactured in such a way that it was unreasonably dangerous to the end-user; sometimes litigants will argue the company failed to warn consumers about some known danger. In contrast, a breach of contract suit seeking purely monetary damages would not, under the cases explored above, register the same issue, perhaps presenting a more viable alternative to a litigant hoping to survive a defense rooted in the illegality argument. Firms should also recognize that potentially infringing behavior may lead not only to a lawsuit claiming trademark infringement or unfair competitiona plaintiff might also seek to capitalize on the fact marijuana (and THC) is illegal under federal law, as the plaintiff did in Tapatio, to support a theory their brand has been tarnished or its value diminished. And the best part of all, documents in their CrowdSourced Library are FREE! Plaintiffs in these sorts of rows, as in other industries, may seek a variety of remedies, from an award of monetary damages to an order requiring the transfer of a particular ownership interest from one to another. You have to know whats happening with clients, competitors, practice areas, and industries. Case administratively closed - No Initiating Document filed/attached. TheHelixcase confirms the "federal illegality" defense has its limits; as with tax cases concerning the application of Internal Revenue Code 280E to cannabis businesses, the fact marijuana is federally illegal will not protect employers who otherwise run afoul of federal law in operating their businesses. If you do not agree with these terms, then do not use our website and/or services. Investors interested in listening can do so via webcast at http://public.viavid.com/index.php?id=142580 or by dialing 844-512-2921 from the U.S., or 412-317-6671 from international locations, and entering confirmation code 13713699. As product liability and consumer products litigators know, while a single aggrieved consumer might not seem like a big deal, that consumer could wind up being the canary in the coal minea signal of an impending wave of litigation. Wash. Aug. 28, 2019) (citing Kelly v. Kosuga, 358 U.S. 516, 519 (1959) (the effect of illegality under a federal statute is a matter of federal law). C19-1297 MJP, 2019 U.S. Dist. California is the most powerful cannabis economy in the world, and we have a unique opportunity to consolidate the market, Subversive Capital Acquisition Corp. (SCAC) Chair Michael Quinn Emanuel Cannabis Litigation Practice Alert: Recent Stock Drop Securities Actions in the Cannabis Industry, Federal Court Rejects Challenge To Arbitrability Of Cannabis Disputes, Recent Trends in Cannabis Patent Litigation From the QE Cannabis Industry Litigation Group, Insurance RecoveryObtaining Releaf for the Cannabis Industry, SEC Division of Examinations 2023 Priorities. - Al Foreman, Partner of Tuatara Capital This case was filed in U.S. District Courts, Completion of the Transaction, which is expected in January 2021, remains subject to the satisfaction or waiver of certain customary conditions including, among other things, the requisite approval of the shareholders of Caliva and Left Coast Ventures, (b) the approval of the Exchange recognizing the Caliva Transaction and the LCV Transaction as SCACs qualifying acquisition and the listing of the SCAC Common Shares on the Exchange, (c) a final receipt for the prospectus having been issued by or on behalf of the securities authorities, (d) no law or order (other than U.S. federal cannabis laws) having been enacted, issued, promulgated, enforced or entered that prohibits or restrains the consummation of the Caliva Transaction or the LCV Transaction, (e) the conversion of SCACs Class A restricted voting shares and Class B shares into SCAC Common Shares, (f) contemporaneous closing of the Caliva Transaction and the LCV Transaction, and (f) the waiting period under the HSR Act having expired or being terminated (which waiting period expired on November 16, 2020). Why is this public record being published online? Cancellation and Refund Policy, Privacy Policy, and Sisu members will receive consideration in the form of $15.0 million in cash and the remainder in newly issued SCAC Common Shares, subject to exceptions for certain U.S. persons that will receive consideration in cash. 2019-11-01, Los Angeles County Superior Courts | Contract | Given the second caveat in particular, parties instituting lawsuits or counter-claiming against a plaintiff may want to seek remedies in the form of monetary payments rather than shares in a business, because, as we explore below, courts have shown a reluctance to grant the latter type of relief in marijuana-related cases. This certainly was not the first time contract enforceability between cannabis companies has come up. The privately held company is known to have been acquired last year by Subversive Capital Acquisition. 2:18-CV-01434-RAJ, 2019 WL 4058970, at *2 (W.D. Investor Type. This matter is before the Court on Defendant's Motion to Dismiss Plaintiff's First Amended Complaint. Headquarters Regions San Francisco Bay Area, West Coast, Western US. In that case, a medical marijuana dispensary operator sued its landlord for breach of the lease agreement; the landlord argued the lease was illegal and was thus unenforceable. These cases and others like them present several takeaways. By subscribing to our blog, you acknowledge that you have read our, Federal Court Sends Ominous Signal on Cannabis Contracts, Treasury Report Recommends Increasing Tax Audits of Cannabis Taxpayers, WA COVID-19 UPDATE: Cannabis Businesses Deemed Essential; WSLCB Further Relaxes Rules, Marijuana, Hemp, & COVID-19: Regulatory Guidance, Government Loans, and Tax Credits (Or Lack Thereof), Proposed Washington Cannabis Bills 2020, Part 3, Proposed Washington Cannabis Bills 2020, Part 2. WebLeft Coast Ventures has a revenue of $31.6M, and 138 employees. Docket(#1) Clerks Notice to Filer re: Electronic Case. In connection with the consummation of the LCV Transaction, SCAC has also agreed to repay in full certain promissory notes of LCV for an aggregate amount equal to $15.0 million (the LCV Note Repayment) which LCV Note Repayment will adjust the consideration paid to Left Coast Ventures shareholders on closing. Counsel experienced in both civil litigation and cannabis-specific issues such as the federal/state conflict and state-by-state patchwork of cannabis regulations (and therefore not needing to be "brought up to speed") will be essential to guiding litigants to cost-effective resolutions. Common types of intellectual property (IP)-related disputes involve claims of patent infringement, copyright infringement, and trademark infringement. However, it does draw some attention for the company at a critical time in its five-year history. April 27, 2020 Finally, one place to get all the court documents we need. Subversive Capital opted to purchase both Left Coast and Caliva for $142.2 million and $282.9 million, respectively. Password (at least 8 characters required). +1 561 962 2107 A primary takeaway fromHelixis companies in the cannabis industry, like those in any other industry, should develop and implement procedures to ensure compliance with all state and federal employment regulations (including those implemented under the FLSA). While it may be relatively difficult for marijuana businesses to find insurers who are ready, willing, and able to work with them, identifying such insurers could prove invaluable. Partnership disputes can be particularly contentious in the cannabis industry. The relevant caveats are 1) the cases described in this section have been decided by courts in states that have legalized marijuana in one form or another, and 2) the parties in these cases did not seek a remedy that would require a court to order violation of the CSA.

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