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Opinion: 3 ways to protect a cannabis business partnership from litigation

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The cannabis industry has grown dramatically with each new state that legalizes its sale.

Still, the industry continues to have the reputation of being a no-holds-barred Wild West.

As a result, partnership disputes, bad business practices and “off-the-books” backroom dealings abound, particularly in contrast to other, more mature, established industries.

Here are three key pieces of advice on how to protect yourself from bad actors, acrimonious partnership disputes and costly legal disputes:

1. Protect your licensing: Each state typically requires that every marijuana business be licensed and the company owners undergo a background check.

It is critically important that your name is on the license if you are a partner or owner. For one thing, it is usually the law.

For another, having a name on the license is vital in preventing later ownership disputes about the existence and amount of your ownership.

Unfortunately, I often see people get cute with their licensing requirements. They have owners with handshake deals who aren’t on the license.

Investor groups, in particular, sometimes hear that they don’t need to be on the license, but in reality, they do.

If your name isn’t on the license, you might not later be able to claim an ownership stake or partnership rights.

On the other hand, if you are on the license, you have leverage in any disputes or major business decisions (including a sale) because regulators often require proof that all owners have consented to a transfer.

2. Formalize your partnership agreements: There are countless examples in the cannabis industry of handshake deals that have been happily in place for years until one of the parties tries to disown or dissolve it for any number of reasons.

These types of informal partnership agreements might be a lingering reminder of pre-legalization days when people were reluctant to put anything marijuana-related in writing.

However, now that marijuana is legal in many states, the old way of doing business serves no purpose other than to open up partnerships to contentious and expensive legal disputes.

Many states have enacted statutes requiring the recognition of partnership agreements, even if no signed paperwork exists.

However, the crux of the issue is not necessarily whether a handshake deal is enforceable – nearly all will be considered enforceable – but, rather, the sizable cost of the litigation required to prove its existence and to enforce it.

There’s also the onerous statutory provisions of the Uniform Partnership Act that apply to partnerships without a written partnership agreement.

The issues can get particularly muddy and lead to litigation when winding up a partnership.

Without a written agreement setting forth the process for dissolution, including potential liquidation of assets or buyout requirements, many partnerships will end up in litigation.

Signing a partnership agreement at the outset is always the best course of action because trying to unwind one after the fact can be as tricky as getting toothpaste back into the tube.

Once you attempt to formalize something informal, both parties usually begin jockeying to make new changes to the existing agreement that will work in their favor.

3. Safeguard minority owners: Shady accounting is one of the most notorious issues I regularly see in the cannabis industry, particularly regarding calculating profits and distributions.

A common problem I’ve encountered is a majority owner who tries to make profits look lower to reduce required profit distributions to minority owners while increasing profits for themselves.

A frequent example of this type of self-dealing is when payments for goods or services are made to affiliate businesses of the majority owner, meaning that they are, in effect, paying themselves twice and reporting lower profits to minority partners.

Perhaps surprisingly to many, such a practice might not be illegal or a breach of contract.

Many limited liability company operating agreements and partnership arrangements contain provisions allowing managing or majority owners to engage in some level of self-dealing.

Minority owners should protect themselves from this type of situation by having a written partnership agreement that requires:

  • Notification of transactions with companies in which the majority owner has a stake.
  • Any transaction with an interested party to be done on the same terms as an arm’s-length transaction.

Agreements should also provide minority partners with the ability to obtain an accounting of the amount spent and specific uses.

Having that language in writing is often enough to deter dishonesty because majority owners understand that minority owners have protections in place and can take legal action if needed.

These three examples illustrate why it’s beneficial for marijuana business partners to have an experienced cannabis litigation attorney prepare and review partnership agreements.

Don’t be penny-wise and pound-foolish. Spending a few hundred dollars upfront can save many thousands of dollars in potential litigation costs down the road.

David Olsky is a partner at Denver-based law firm Fortis Law Partners. He can be reached at dolsky@fortislawpartners.com.

Source: https://mjbizdaily.com/3-ways-to-protect-a-cannabis-business-partnership-from-litigation/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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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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