In this blog series, our Executive Director Ben Taylor highlights a selection of cybersecurity, physical security, health or natural threat related stories from the past week.
Indeed, federal cannabis legalization may just turn out to be a massive feast for many litigator-specialist lawyers. This article is a call for cannabis operators to begin to plan for potential legal risks from within their organizations and to counter-intuitively plan for legal risk emanating from outside the company walls. When federal legalization arrives, cannabis will be a large and juicy target for lawsuits ranging from class action, intellectual property disputes, specific product liability, etc. In the opinion of the author, it is inconceivable that lawsuits don’t spike and become a major expense and hassle for every cannabis company.
The Federal Bureau of Investigation (FBI) has released a Private Industry Notification (PIN) on ransomware actors using significant financial events, such as mergers and acquisitions, to target and leverage victim companies. According to the PIN, “The FBI assesses ransomware actors are very likely using significant financial events, such as mergers and acquisitions, to target and leverage victim companies for ransomware infections. Prior to an attack, ransomware actors research publicly available information, such as a victim’s stock valuation, as well as material nonpublic information. If victims do not pay a ransom quickly, ransomware actors will threaten to disclose this information publicly, causing potential investor backlash.”
According to Money & Markets, “Until banking restrictions lift, cannabis companies have to dig into profits to enter into any M&A deals. As a result, what we’ll witness this year and in future years — regardless of where federal legalization stands — is the continued consolidation of the cannabis sector. Bigger companies will look to small-scale cannabis businesses as an easy way to get footholds in new markets. Larger cannabis businesses will be strategic in their deals — looking for companies in states in which they can gain a larger footprint and companies that can scale.” So as M&A continue to be a trend within the growing industry, this extortion threat is one that companies will need to be mindful of before significant business dealings.
According to the Boston Glob, DoorDash is adding security features to its app to help protect drivers. The San Francisco-based delivery company said Wednesday it’s partnering with security company ADT on the new features, which will be available to all US DoorDash drivers by the end of this year. Under the new system, DoorDash drivers who are feeling unsafe can connect to an ADT agent using a button in DoorDash’s app. The agent will stay on the phone until the driver feels comfortable; if the driver stops communicating, ADT will call 911. DoorDash is also adding an emergency-assistance button to its app, which drivers can swipe to let ADT know they need immediate help.
The enhanced safety follows several high-profile attacks on delivery drivers. In March, a 19-year-old DoorDash driver in Columbus, Ohio, was beaten after he got confused over an address. That same month, two Washington, D.C., teens assaulted an Uber Eats driver with a stun gun, causing his vehicle to crash and killing him. And in August, a DoorDash driver was shot to death while making deliveries in Maryland.
The National Association of Cannabis Businesses is in the process of developing national standards for delivery. It can often be helpful to look at best practices from other, more mature industries while envisioning the best path forward for cannabis, even if those industries are just a few years ahead of cannabis.
The cannabis industry’s lack of banking access has created public safety concerns and social equity challenges in the rapidly growing marketplace. That was the main takeaway from an Oct. 28 virtual briefing titled “UNSAFE Banking & Cannabis,” which was hosted by the U.S. Cannabis Council (USCC). Cannabis businesses are targeted by criminals because they know much of the industry deals primarily in cash, according to Bauer’s insights. “The fact that most cannabis companies are forced to operate in an all-cash business continues to be a public safety risk,” he said. “Cannabis companies are specifically targeted by criminals because they know about the restrictions to banking placed on our industry that we have. The bottom line is criminals know that we are cash-heavy.”
In a 90-day period last year, Livwell had 15 burglaries at its Colorado retail locations, Bauer said, with criminals driving stolen vehicles into the buildings, cutting holes through rooftops and walls, staging lookouts and getaway vehicles, and attacking the stores with pry bars and sledgehammers purchased from local hardware stores. The company’s losses totaled hundreds of thousands of dollars, Bauer noted, with stolen product likely taken out of state and sold on the illicit market.
With water scarcity an increasing problem, some cannabis and hemp cultivators are seeking solutions beyond automation or growing methods, including using drought-resistant plant strains that require less water and can withstand higher temperatures. Ryan Power, CEO of California-based Atlas Seeds, said the California-based seed company is identifying what it deems “drought-tolerant” marijuana and hemp varieties.
“What we have noticed is that genetics that display high vigor are also more drought-resistant,” Power said. “They grow with much less water than others, and we do breed for vigor.”Power said the company has developed strains that tolerated “excessive” heat – over 100 degrees Fahrenheit – for multiple weeks inside greenhouses on the East Coast this season.
It is important for cannabis organizations, particularly cultivators to consider how future climate change with impact their operations. According to the latest report from the UN’s Intergovernmental Panel on Climate Change (IPCC) “Global surface temperature will continue to increase until at least the mid-century under all emissions scenarios considered. Global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades.” Examining scientific developments and adjusting to new climate normals will be crucial for the continued development of the cannabis industry.
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