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DOJ Driving Antitrust Action Against 10 Companies

DOJ Driving Antitrust Action Against 10 Companies

Posted by Nancy Moraa on 08/14/2020 in News

Updated on August 17, 2020.  Medical content reviewed by Dr. Joseph Rosado, MD, M.B.A, Chief Medical Officer

DOJ Driving Antitrust Action Against 10 Companies marijuana doctors

Even with the progressive milestones that the cannabis industry has achieved over the years and the success of many cannabis companies, from time to time, the industry faces many obstacles. The opposition often comes from the federal ranks like the DOJ. 

A good example is Attorney General William Barr, who recently came under fire from the Department of Justice. He is expected to appear before the House of Representatives committee for questioning on various topics.  To say that AG Barr is against the cannabis industry would be an understatement. 

In June 2020, a DOJ “whistleblower” shared an allegation that AG Barr’s antipathy toward cannabis, in general, had taken a new direction.  According to the report, the DOJ was instructed to lodge antitrust investigations to harass legal weed companies, which is where the DOJ action against 10 established American cannabis companies (in legalized states) originated from. 

DOJ Gunning for MedMen and PharmaCann and Other Merging Cannabis Enterprises 

William Bar decided to carry out antitrust investigations into 10 cannabis companies. According to an official in the US Department of Justice, the DOJ investigations were inspired by Barr’s political opposition to cannabis legalization, which isn’t likely to change anytime soon. The medical marijuana sector is hoping for the retirement of AG William Bar, and the appointment of a new Attorney General after the November 2020 election.  It would support medical cannabis and state initiatives and rescheduling cannabis out of the prohibited Schedule 1 status it has been stuck with since the 1960s. 

Various antitrust investigations were being carried out by the Justice Department. It appeared as if William Barr had some personal vendetta against the cannabis industry. In 2019, Barr had ordered investigations into various cannabis cases. These cases accounted for almost one-third of the DOJ’S antitrust workload. Out of all the legal issues and infractions nationwide, medical marijuana companies earned 30% of the AG’s attention. 

Source Web 2020: abcnews.go.com

The Department of Justice itself sees minimal cannabis cases to warrant such investigations. But Barr doesn’t see it that way. A good incident as an example was the recent merger between MedMen Enterprises and PharmaCann in 2019. Barr ordered a full-scale investigation on the merger even after his staff advised against it. His team didn’t see a good reason for full –scale investigation on the merger. 

No man should be above the law.  But the Office of the Attorney General does not appear to support AG Barr’s very personal attack against state legalized medical marijuana corporations.  The legal delays have significantly cost MedMen (one of American’s largest dispensary businesses). 

Does It Seem Personal? It Might Be

Many found the actions by Barr to be concerning. This was so, especially when the failed merger impacted negatively on MedMen. A federal antitrust investigation is a significant undertaking for the companies involved. Many companies that undergo this process end up going bankrupt as the investigation drains the companies’ resources in question. If you can’t “shut them down” by volition, you can squeeze the life out of them with prolonged and expensive legal battles—a useful strategy, if not a reproachable one. 

When President Trump appointed Jeff Sessions as Attorney General, the cannabis industry became very wary and concerned about the actions that would be taken against plant-touching businesses. The moment Sessions was fired, there was a massive sigh of relief in the cannabis industry. Many business owners were hopeful that the industry would get a bit of a ‘break’ from Federal attacks. 

That was mainly because of the testimony provided by Barr before his approval. Before he was appointed the Attorney General, Barr strongly voiced his opinion to congress. He was boldly stating that he preferred STATES Act over federal prohibition. 

Back then, asserting such claims endeared him to the cannabis interest groups. Many people thought he would become a good voice for the cannabis industry.  He conveyed strong support to allow states to determine what was best for their residents when it came to legalizing medical marijuana. 

And then, AG Barr flipped the narrative.  Once instated, he became “Enemy Number One” of state-sanctioned medical cannabis businesses.  Attacking not the state legislators for legalizing it, but the corporate owners, shareholders, and operators for running the businesses. 

Eyes on What Seems Like a Modern Marijuana Witch Hunt 

Cannabis companies that fall under investigation have, in most cases, ended up closing down. A good example was the case with MedMen. The company went bankrupt after a court case drained all their finances.  That, and the departure of former CFO James Parker, who won a claim against the company, and will be compensated $500,000 per year.

Often the people in power have disappointed their citizens by making the worst decisions ever. The cannabis customers and businesses are hoping that things might change. Either the Attorney General turns his views or someone who understands the actual value of the cannabis industry takes over.  

Because right now, as states are evaluating the increased economic burden and impact of Covid-19, the tax revenues from cannabis may be one of the only things keeping certain jurisdictions from experiencing hardship during the pandemic. 

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