California cannabis businesses face costly peril with marketing robocalls, attorney says

The North Bay Business Journal reports


Robocalls are not only a nuisance. They can be costly for the cannabis industry.

That’s the assessment an attorney made during the North Coast Cannabis Industry Conference on Wednesday during a discussion about the legal ramifications of the Telephone Consumer Protection Act.

“Everybody hates getting unsolicited phone calls,” Farella Braun + Martel attorney Cynthia Castello told attendees of the Business Journal’s virtual conference, which was underwritten by her San Francisco-based law firm.

The TCPA requires companies making calls and texts to cellular telephones using auto-dialing features to obtain written consent from the receiver.

Fines for non-compliance can range from $500 to $1,500 per call. Castillo noted one Oregon case in which the plaintiffs were awarded $925 million in damages from a company that allegedly made 1.8 million calls.

The cannabis industry is especially vulnerable to these class-action lawsuits because it’s relatively new and the businesses “may not know all the rules,” Castillo said.

“(The plaintiffs) are able to exploit these weaknesses,” she said.

It doesn’t help matters for the industry that the law is interpreted in various ways depending on the court and interpretation of what constitutes autodialing — whether random or sequential.

The hope is the lower courts will hear cases that will interpret the high court’s ruling over the next few years.

“The next few years we’ll start to see clarity,” she said.

In the meantime, Castillo added the industry will need to negotiate “a patchwork of rules.” To avoid getting slapped with a class-action lawsuit and opening themselves up to millions in damages, she advises businesses to do the following:

  • Work with an experienced attorney
  • Continue to get written consent and allow for an opt-out of promotional texts
  • Standardize a company policy
  • Keep adequate records
  • Ensure vendors are compliant

“Right now, the safest course of action is getting expressed consent,” she told attendees.

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