Its official– the legal marijuana crowd has a TCPA problem.
One of the perks of reviewing every TCPA case across the country on a daily basis is that it enables us to spot trends in the activity of Plaintiffs and their counsel so we can provide better advice to our compliance clients, even as we prepare for and defend ongoing litigation.
While many of these changes are subtle, some trends stick out like a sore thumb. For instance, the cannabis industry is being absolutely blown up with TCPA lawsuits recently, and its high time somebody formed a trade organization to help these folks figure out the telecom laws in this nation.
The latest target is the cleverly named MARY JANE’S CBD DISPENSARY (how’d they come up with that?) that was sued yesterday in the US District Court for the district of Nevada. The putative TCPA class action is brought by Abbas Kazerounian’s shop, arguably the best TCPA class action lawyers on the consumer side out there.
The complaint alleges the dispensary is just firing away automated text messages for marketing purposes. Here’s an example:
I mean that’s just an obvious no no (even with the FCC’s big new ruling out today on text messages) unless Mary Jane’s had express written consent—and all the needed conspicuous disclosures—to send the message.
The complaint includes a class of:
All persons throughout the United States (1) to whom Defendant delivered, or caused to be delivered, a text message, (2) directed to a number assigned to a cellular telephone service, (3) by using an automatic telephone dialing system, (4) within four years preceding the date of this complaint through the date of class certification.
So this could be a really big deal for these folks. The penalties for violating the TCPA is $500.00-$1,500.00 per call and a class action–like this one–could cost hundreds of millions or even billions in exposure. (Of course the average settlement cost for one of these is over $6MM bucks!) For the curious, the complaint is here: Mary Jane Complaint
But as I mentioned, the Mary Jane Complaint is just a drop in the bucket. The Cannabis industry is absolutely under assault right now. I’ve seen a dozen or so cases filed against these companies in just the past few weeks and, judging by the allegations, it –looks like these folks are making themselves attractive targets. Perhaps most notably, the dispensaries are not just putting themselves in harm’s way– the platforms and CRMs used by these companies are also in the cross hairs. Indeed, the entire cannabis ecosystem appears vulnerable to significant (existential?) TCPA risk at this point.
I don’t personally have any cannabis dispensary clients (or vice versa) but if you do will you tell the industry to get it together and stop being such low hanging fruit? Even if the Cannabis market is valued north of $50BB in the United States and growing, these guys are going to put themselves out of business before they know it. And make some very dangerous plaintiff’s lawyers even richer in the process…
Published: June 26, 2020
Founder & Interim Editor of L.A. Cannabis News