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Mistakes in Oregon Cannabis Business Sales: Part 2

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We have been helping people buy and sell Oregon cannabis businesses since the early days of the adult use market. Most of these sales are relatively simple asset purchase agreements—including many for naked licenses—but some have been stock sales. Others have taken place amid administrative enforcement action by the Oregon Liquor and Cannabis Commission (OLCC).

This is the second of two posts on mistakes we commonly see in Oregon cannabis business sales. Last week, I covered lazy diligence, sleeping on inventory, services agreements and unclear deadlines. Today I have five more hazards for you: sale structure, landlord issues, local issues, earnest money and escrow issues.

Sale structure (asset or stock sale agreement)

Story time. We represented a minority shareholder in a sale recently where the company agreed to an asset sale (total liquidation) of an OLCC licensed vertical out of a C-corp. When alerted to the potential tax impact, the selling attorneys reasoned the C-corp “wasn’t well managed and there were outstanding liabilities.” It seems that no consideration was given to what could be accomplished in a standard, pre-close window, as well as standard options for closing conditions, indemnity escrows, promissory note offset rights for the buyer, and other types of holdbacks. A seller can also negotiate responsibility with a buyer for various liabilities during diligence, at which point the parties may negotiate related representations and warranties, indemnities, etc.

The point here is that not all Oregon cannabis businesses are LLCs taxed as partnerships, and not all sales should be asset sales. Still, I’ll be surprised if I don’t come across a few more instances in the next 12 months similar to the story above, where a selling C-corp agrees to an asset purchase proposal (as in, total business liquidation) simply because the buyer suggests it. “That’s just how these businesses are sold,” people sometimes say. “That was the best offer.” Etc. Unfortunately, sellers – and even their advisers – often fail to understand the tax implications associated with selling off everything but a company’s stock. A likely consequence: too much tax.

So why do C-corp businesses generally prefer stock sales? First, the proceeds will be taxed at capital gains rates rather than ordinary income tax rates. In the sale of a C-corporation, taxes at the company level are bypassed with a stock sale. Selling shareholders may also realize the incredibly valuable qualified small business exclusion if the stock has been held five years and other criteria are met. Finally, the selling company and its shareholders may get liability protection in a stock sale by shedding both known and unknown liabilities— at least, the ones that they do not agree to keep.

Blindly capitulating to an asset sale in every cannabis business deal is not the way to go. Talk to a cannabis CPA prior to agreeing to a sale structure, including purchase price allocation where relevant– especially if you are a seller. I hate seeing people pay too much tax.

Landlord issues

Landlords are an interesting lot. By that I mean owners of small commercial buildings—especially marginal buildings, and especially landlords willing to lease to cannabis operators—can be challenging to deal with. Griffen Thorne in our L.A. office has written a fair bit about this dynamic. See herehere and here.

When someone buys a cannabis business, they often need to take a lease assignment from the seller, or negotiate a replacement lease with the seller’s landlord. The landlord’s consent is usually required in the former scenario, and always in the latter.

Some landlords have little interest in working with a buyer— especially if things have been going well with the current tenant. Many landlords also insist on using ill-fitting leases, often cobbled together without counsel from ill-fitting forms. The landlord used that form with the seller, after all, and nothing terrible happened. In my view this is like riding a bicycle with a cracked helmet, because you’ve always used that helmet, and a new one is expensive, and you’ll probably never crash.

In any case, it’s very important that Oregon cannabis business sellers ensure their landlord will work with them, to the extent required, prior to signing a term sheet. And it’s important for buyers to diligence the lease and ownership aspects of a property sooner rather than later. This is one of the issues where transparency and cooperation between the parties is vital, in order to close a deal.

Local issues

Local issues can be cumbersome in Oregon cannabis sales. I’m not just talking about Land Use Compatibility Statements or pointless local licensing programs. When the sale of a business involves real property (real estate), any number of things can pop up, especially in a place like the City of Portland. I’ve seen state and local bodies require all manner of improvements and concessions associated with changes in use or real estate ownership, e.g.: six figure curb cuts, easement grant requirements, or mandates to add points of vehicular access to a given parcel.

Some of these requirements may be due to the nature of the use of a piece of property (cannabis; cannabis retail; cannabis processing; etc.), while others may ensue from regulations or policies adopted after a parcel last changed hands. It’s unfortunate, though, when a surprise like this surfaces well into a deal—especially after some portion of the purchase price has gone firm, or a buyer has made other binding commitments. This leads me to the next topic.

Earnest money issues

I like earnest money in deals, even if it’s wholly or partially refundable, and even if it’s just in the form of a promissory note or something similar. People should have skin in the game. The issue with many Oregon cannabis sale agreements, though, is that they lack basic parameters around earnest money. Most purchase agreements are not standard forms, after all, and earnest money is often something that is stuffed in along the way.

Another story. Last month, someone returned to us a redlined draft of a purchase agreement where no earnest money had been required to start (the LOI didn’t contemplate it in this case). The seller’s lawyer added a line that read “Buyer shall provide to Seller $20,000 earnest money upon execution of this Agreement, which shall serve as a credit against the Purchase Price at Closing.” There were no instructions for deposit, let alone anything about how or whether the earnest money would be refundable, or when it would “go hard.” What if the seller breached the agreement? What if buyer breached? What if the landlord refused a lease assignment? What if OLCC refused to grant a license because of this breach or that? Etc. Anytime money is going over the transom, whether and when it can come back, if at all, must be very clear.

Escrow issues

There are a few issues around escrow that make Oregon cannabis deals interesting. First, in the real property context, it’s still impossible to find a title company that will serve as escrow on a deal. (It’s hard enough to find one that will extend a title policy.) I think I first wrote about that six years ago and not much has changed. This means that cannabis business buyers and sellers need to find a different type of agent. And that escrow agent should not be one of the party’s lawyers absent special circumstances– which is another mistake we often see.

Over the years, we have always worked with third-party escrows who aren’t title companies in cannabis asset purchase, stock purchase and real property transactions. Those agents tend to schedule their fees off of title company calculators for real property deals, and may agree to flat fee a business sale agreement. Escrow is affordable in either case, and most deals should run through escrow, at least in part, under a standard escrow agreement.

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Let us know in the comments if you are seeing these or other common mistakes in Oregon cannabis business sales. Or feel free to email me with any thoughts. Until then, may all your deals close quickly and without stressors.

Source: https://harrisbricken.com/cannalawblog/mistakes-in-oregon-cannabis-business-sales-part-2/

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Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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