They say the first step is admitting you have a problem. My name is Whitt, and I’m a recovering litigator. I’ve spent years sending ugly letters and playing a zero-sum game with strangers, and it generally didn’t lead to a bunch of happy days at the office.

But ever since we started our Cannabis Industry team at Bradley, I have been looking forward to the day when I would be able to use those skills learned in my salad days to help my new clients in the cannabis world. Surely, I assumed, an industry growing as quickly and without regulation as the cannabis industry would eventually find itself in the crosshairs of the plaintiffs’ bar in the same types of lawsuits faced by the operators of nearly every other type of business.

For years, that trend didn’t seem to materialize in a large-scale way. As it had been from the onset of the state-legal cannabis days, the focus seemed to be on criminal concerns and law enforcement priorities. This was, after all, the heady days before, during, and after the Cole Memorandum and the question of whether the federal government would ever change its generally hands-off policy to state legal operations.

But still, no outpouring of civil litigation. We’ve opined on why that might be the case, but I think it’s probably a mixture of (1) poorly drafted agreements that made the outcome of any litigation uncertain; (2) cannabis operators wanting no part of the court system given the legal status of cannabis; and (3) the fact that most cannabis operators didn’t have the money to see a civil case to trial. With increasingly liberal cannabis policies at the state and federal levels, that is beginning to change.

The Lawsuit

One sign of that change is a recent suit against California cannabis giant Stiiizy, which has been accused of marketing dangerous, high-potency THC products to young people, allegedly resulting in cannabis-induced psychosis in a user who brought a product liability and fraud suit in Los Angeles state court.

As usual, Sam Reisman was on the case. The allegations, which involve an alleged injury to a minor, are sad, and I’m only inclined to include those relevant to the legal issues.

The suit alleges negligence, design defect, negligent failure to warn, fraud, fraudulent concealment and breach of implied warranty on the part of Stiiizy. The complaint, however, was not limited to the single plaintiff.

Stiiizy’s defense so far has been straightforward, with a spokesperson recently issuing a statement that “[w]e do not market or sell our products to minors and clearly state on our packaging that cannabis products may only be possessed or consumed by persons 21 or older.”

The statement continued, “We also follow all California mandated packaging requirements that prohibit marketing to minors or any designs or images that may attract minors.”

The Takeaways

If you take away the cannabis, this would look like one of the thousands of product liability lawsuits filed in courts across the United States each year. At its heart, the complaint alleges that Stiiizy designed a flawed product and then – either negligently or fraudulently – failed to warn customers of the flaw when it sold the product to them.

The case is in its infancy, and it’s far too soon to tell how the facts will develop. To me, the most interesting part is that it’s one of the first big cases that involves novel cannabis issues and centuries old product liability rules.

But to cannabis operators, this should be more than a curiosity or intellectual exercise. This case is a reminder that cannabis operators do not simply face criminal and regulatory exposure by participating in an industry that has been tightly controlled and scrutinized for decades. They also face the same types of civil liability that the manufacturers of virtually every other product have faced since the founding of the country. And, given the attitudes about cannabis harbored by many aggressive plaintiffs’ lawyers and potential jurors, cannabis companies should go to extra lengths to ensure that their product design, advertising, and marketing can be justified when one of their customers eventually brings a suit like the one faced by Stiiizy.

We’ll keep a close eye on this case. Check back soon or drop us a line.