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ARTICLE · 15 JULY 2020

High Risk Of Second Requests In The Cannabis Industry

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The cannabis industry faced heightened antitrust scrutiny from the Department of Justice (DOJ) in 2019.

United StatesCannabis & Hemp
Leo Caseria
Leo Caseria
Thomas Tyson
Thomas Tyson
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The cannabis industry faced heightened antitrust scrutiny from the Department of Justice (DOJ) in 2019. There were public reports regarding several "Second Requests" seeking information about potential cannabis transactions. Second Requests are a part of expensive and time-consuming antitrust investigations typically issued in the approximately 2 percent of transactions that present significant anticompetitive concerns. To have several Second Requests within a short period of time in the same industry, particularly in an emerging industry such as cannabis, appeared unusual to many observers. Recent events have shed light on some possible reasons for DOJ's heightened focus.

John Elias, a career DOJ antitrust attorney, recently testified before the House Judiciary Committee about the DOJ's cannabis antitrust investigations, claiming the DOJ was not motivated by concern over anticompetitive effects but instead was driven by Attorney General William Barr's animosity

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