Major Multistate Cannabis Operators Face First-Of-Their-Kind Antitrust Claims

The Ohio attorney general recently filed an unprecedented state antitrust enforcement action against nine of the nation's largest multistate cannabis operators. The complaint alleges these defendants formed illegal cartels through reciprocal supply agreements, competitively sensitive information exchanges and discriminatory distribution practices designed to exclude independent Ohio cannabis operators from the market and artificially inflate consumer prices. The complaint seeks injunctive relief, civil forfeitures of $500 per day per defendant for each day the alleged combinations were in effect, and attorneys' fees.

Key Takeaways

• Though targeted at multistate cannabis operators, this action marks a watershed moment for all cannabis and hemp businesses and the trade associations promoting their interests. Casual business arrangements that proliferate in both sectors create significant antitrust exposure.