Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento.

This week we're looking at: Alleged antitrust reefer madness at the DOJ • Who got the MedMen settlement work • Social equity, cannabis and New Jersey's election • TCPA class actions targeting the cannabis industry

Thanks as always for reading. Send your tips, thoughts and story ideas to [email protected]. You can call me, too, at 916.448.2935. Follow me on Twitter @capitalaccounts.

Whistleblower: Anti-Pot Politics Prompted DOJ Reviews of Cannabis Mergers

U.S. Attorney General William Barr (above), Roger Stone and state-licensed marijuana. No, it's not the start to a bad joke, just an extraordinary—and for those in the cannabis industry, potentially infuriating—combination of politics and political figures to emerge from Washington, D.C. this week.

Two U.S. Department of Justice whistleblowers—an assistant U.S. attorney and an antitrust lawyer—testified in Congress on Wednesday that under Attorney General Barr's leadership political posturing has shaped enforcement actions, including the decision to retreat from an original sentencing recommendation for Roger Stone, the ally of President Trump who was convicted in 2019 of impeding a congressional investigation.

But the politics went beyond that, said John Elias, a prosecutor in the DOJ's antitrust division. Elias told members of the House Judiciary Committee that, over the objections of career attorneys, the division has conducted 10 document-intensive investigations of the cannabis industry since March 2019. The work accounted for 29 percent of the antitrust division's full-review merger investigations in fiscal year 2019, even though the market shares involved in the transactions did not rise to levels that usually triggered heightened scrutiny, Elias said.

"The head of the Antitrust Division, Assistant Attorney General [Makan] Delrahim, responded to internal concerns about these investigations at an all-staff meeting on September 17, 2019," Elias said in prepared testimony. "There, he acknowledged that the investigations were motivated by the fact that the cannabis industry is unpopular 'on the fifth floor,' a reference to Attorney General Barr's offices in the DOJ headquarters building. Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation."

The DOJ did not respond to a request for comment on Elias' allegations. During Wednesday's hearing, Congressman Doug Collins, R-Georgia, noted that the DOJ's Office of Professional Responsibility had issued a June 11 memo, obtained by Politico, finding that the investigations were permissible. Elias said that he disagreed with the office's findings.

Though the DOJ's investigations did not result in any blocked mergers, they were time-consuming and costly for the targeted companies. Medmen, PharmaCann and other cannabis operators submitted approximately 1.3 million documents, some of which prosecutors never reviewed, Elias said.

The whistleblowers' allegations infuriated Khurshid Khoja, founder of Greenbridge Corporate Counsel. Khoja was not directly involved with any of the transactions under scrutiny, but he is familiar with the delays and bills they generated.

"These companies had to spend a ton of resources that they otherwise would not have had to," Khoja said. "It's a travesty."

Khoja said he found it ironic that the DOJ was scrutinizing merger details for an industry that the federal government deems illegal.

"It was like, if you don't think the market is legitimate, why do you care?" he said.

>> Davis Wright Tremaine issued a client advisory on Thursday, saying Elias' testimony "underscores the need to be aware of and plan for the myriad ways federal policies and enforcement beyond criminal enforcement can affect businesses involved in the cannabis industry.

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WIPL is known for having some of the most engaging and energizing keynote speakers attend to share their thoughts, experiences, war stories and tips on effective leadership. And this year is no exception. This year, we are grateful to welcome two remarkable women come and inspire us: Tina Tchen, the President and CEO of the "Times Up" Legal Defense Fund and Paula Boggs, Founder of Boggs Media LLC and Former Executive Vice President, General Counsel and Secretary, Law and Corporate Affairs at Starbucks from 2002-2012. READ MORE

Who Got the Work

• Last week we wrote about MedMen's settlement of an investors lawsuit. This week we have the names of lawyers involved. Claimants MMMG-MC, Inc. and Brent Cox were represented by Daniel Petrocelli and David Kirman of O'Melveny & Myers and Michael Mancini and John Shenk of Mancini Shenk, who originally filed the suit.

Defendants Adam Bierman and Andrew Modlin were represented by Robert Becher of Quinn Emanuel Urquhart & Sullivan. Entity defendants MedMen Enterprises Inc., MM CAN USA Inc., and MedMen EnterprisesUSA were represented by William Dugan and James Ward of Baker & McKenzie, and Miles Feldman of Raines Feldman. Defendant MMMG LLC was represented by DavidSergenian of Sergenian Ashby..

Other interest holders were represented by Garrett Llewellyn of Barnes & Thornburg and Stacy Harrison of Orrick Herrington & Sutcliffe.

• Barry Douglas Hunter of Frost Brown Todd has entered an appearance for CBD American Shaman LLC in a pending lawsuit for claims under the Magnuson-Moss Warranty Act. The complaint was filed May 4 in the U.S. District Court for Florida's Southern District Court by DeSouza Law on behalf of Michael S. Davis. The case is assigned to U.S. District Judge William Dimitrouleas.

• Harrang Long Gary Rudnick PC is representing Cura CS LLC in Portland federal district court in a class action alleging deceptive representations about the level of THC in a product. The law firms Larkins Vacura Kayser LLP; Bursor & Fisher; and Barbat, Mansour, Suciu & Tomina represent the plaintiffs, who filed their action in state court. Cura CS last week moved the case to federal court.

In the Weeds…

How the cannabis industry is dealing with TCPA class actions. Darren Dummit, Robert Milligan and Stanley Jutkowitz of Seyfarth Shaw write that "a target has formed on the backs of Cannabis companies for Plaintiffs' counsel looking to take advantage of the [Telephone Consumer Protection Act] and the nascent cannabis industry, which are often funded by private equity or high net worth individuals/celebrities." Cannabis companies need to thoroughly vet third-party marketing companies and take other precautions, such as regularly cross-checking the federal Do Not Call registry. [The Blunt Truth]

Ohio blocked an applicant from taking the bar exam for not disclosing he was fired over a failed drug test. The state Supreme Court said regulators were within their authority to deny Dylan Houston Phares' application to take the bar exam in 2019 after he did not disclose that he had been fired from a previous job after testing positive for marijuana. The court said Phares can reapply to take the July 2022 exam. [Court Listener]

Social equity and cannabis in New Jersey as the November election nears. Jessica Gonzalez and Brian Ellis of Bressler, Amery & Ross write that New Jersey's ballot measure to legalize cannabis, should it pass, could provide new opportunities for disadvantaged communities. "New Jersey has the late-mover advantage of being able to look to other states for social equity programs that have successfully resulted in licensure for social equity." [New Jersey Law Journal]

Using marijuana tax revenue to promote racial justice. Harris Bricken attorney Nathalie Bougenies writes about the city of Portland, Oregon this week announcing that it will redirect $27 million generated by marijuana taxes from the police department to programs focused on restorative justice. "The calls for change following George Floyd's murder help shine a spotlight on the devastating damage caused by decades of cannabis prohibition and on the need to ensure our resources get reinvested into the communities most harmed by cannabis prohibition." [Canna Law Blog]

Los Angeles is rebooting its marijuana licensing program. "The City Council, voting unanimously, gave preliminary approval to a series of revisions that would provide a jump in licenses for so-called social-equity applicants—people, many of color, who were arrested or convicted of a marijuana-related offense, and lower-income residents who live, or have lived, in neighborhoods marked by high marijuana arrest rates." [AP]

For Our Calendars: All the Things

June 26 - Voting closes for six open seats on the International Cannabis Bar Association's board of directors.

June 26 - Minorities for Medical Marijuana and the Minority Cannabis Business Association will host a live virtual event, "Dismantling Systemic Racism in the Cannabis Industry: A Call to Action."

June 29 – July 1 - MJBizConNEXT Direct takes place as a virtual event. Scheduled speakers include Robert DiPisa, co-chair of Cole Schotz' cannabis law group; Hoban Law Group counsel Bridget Hill-Zayat; Meghana Shah, partner and co-lead of Eversheds Sutherland's cannabis industry team; and Katy Young, managing partner of Ad Astra Law Group.

June 30 - Foley & Lardner and Viridian Capital Advisers present the webinar "Restructuring for Success in the Cannabis and Hemp Industry." Participants include Foley & Lardner partners Ronald Eppen, Geoffrey Goodman and Joanne Molinaro.

June 30 - Duane Morris presents the webinar "Investing in Cannabis in the COVID-19 Era." Speakers are firm partner Michael Schwamm and associate Justin Santarosa and Dino Colonna of Silver Spike Capital.