Cannabis companies, particularly multistate operators (MSOs), are increasingly incorporating lawsuits into their licensing application strategy in a bid to secure a permit in a highly sought-after market.
That strategy of preparing to fight license rejections by state regulators, especially those lost by a narrow margin, is based on a number of factors:
- Many marijuana business applicants in markets across the country have won licenses by appealing or filing lawsuits targeting the initial awards handed out by regulators. In Florida alone, 17 of 22 medical cannabis license holders won their vertically integrated permits through legal challenges.
- Companies figure that if they’ve already spent roughly a half-million dollars to apply and secure locations, what’s another $50,000 or so to appeal a decision?
- There’s a belief that the initial scoring process was biased or corrupt.