Calif. Jury Awards $5M In Landmark Cannabis Antitrust Case

(September 24, 2021, 3:56 PM EDT) -- A California jury Thursday awarded $5 million in damages to a marijuana company that said it was prevented from opening in Richmond by a rival group of dispensaries looking to control the local cannabis market, in what the plaintiff's attorneys characterized as the first cannabis-related antitrust case.

A Contra Costa jury found that two out of three owners of Richmond Patient's Group agreed to work together to prevent Richmond Compassionate Care Collective from leasing or buying a storefront in Richmond, which caused the company harm.

The jury said Darrin Parle and William Koziol had a hand in preventing Richmond Compassionate from being able to open a dispensary in Richmond, but found that Alexis Parle did not participate in the scheme.

As a result, the jury awarded Richmond Compassionate $5 million in damages. Joseph M. Alioto of Alioto Law Firm, an attorney for Richmond Compassionate, told Law360 on Friday that under antitrust law the damages are trebled, and the ultimate judgment will be $15 million.

Alioto said that because this is the first cannabis-related antitrust case, it's a warning that the industry is going to be governed by competition and not by monopolies.

"Anytime these small businesses attempt to get into any market, opportunity is very necessary," Alioto said. "They win or they lose based on competition, and not by conspiracies to exclude them from major markets."

Counsel for the defendants did not immediately respond to requests for comment.

Richmond Compassionate first sued in 2016, alleging that Koziol, the Parles, their company, and some other dispensaries worked together to prevent Richmond Compassionate from opening a storefront that complied with the city of Richmond's requirements, including being 1,500 feet away from any high schools and 500 feet away from lower schools.

"Such actions had the effect of restraining trade and stabilizing prices to monopolize the cannabis dispensary business in the City of Richmond," Richmond Compassionate said, noting it had suffered $15 million in damages.

The conspirators presented bogus leases, letters of intent to lease or purchase, and purchase agreements to owners and landlords, all in an effort to prevent Richmond Compassionate from finding a suitable storefront that would comply with the city's code, according to the complaint. The plaintiff said the defendants' goal was to tie landlords up with a deluge of papers.

The suit claimed a trust to restrain trade and form a monopoly in violation of the Cartwright Act. It sought damages, as well as a judgment of treble damages and attorney fees.

The Parles and Koziol's company Richmond Patient's Group was dismissed from the suit in July, according to court records, while another company, Holistic Healing Collective Inc., was dismissed in March.

Richmond Compassionate is represented by Ronald D. Foreman of Foreman & Brasso and Joseph M. Alioto of Alioto Law Firm.

Darrin and Alexis Parle are represented by Scot Canell.

William Koziol is represented by Barry Himmelstein of Himmelstein Law Network.

The case is Richmond Compassionate Care Collective v. Richmond Patient's Group et al., case number MSC16-01426, in the Superior Court of the State of California, County of Contra Costa.

By Lauren Berg