Over the last week at least five separate landlords for I-71 shops some that choose to transition to D.C.’s licensed market were served a legal letter demanding they compensate existing legal dispensaries for $600 million in financial damages.
The letter alleges that in renting to gray market gifting shops, landlords “breached their duty of care owed to the legal cannabis market.”
The $600 million in damages estimate comes from a number repeatedly mentioned in city council meetings.
The Alliance of Legal Cannabis entities-DC, represented by lawyer Jon L. Brunenkant, is looking to recover “revenues illegally diverted from them,” according to the letter.
Brunenkant was contacted for comment. He said there was nothing to add further than what was included in the letters.
The ALCE was register as a business on Apr 30, 2024, but it is not clear who is actually part of the alliance. However, Brunenkant is also the registered agent for the D.C. LLC, Herbal Alternatives.
The current licensed medical dispensary, Herbal Alternatives II, is registered under Jen Brunenkant, the owner. He did not comment on the connection.
Brunenkant said the alliance is open to all legal cannabis entities, including cultivators and dispensaries licensed for the past three years in the District. It is not clear how many businesses are part of the ALCE. Brunenkant is a D.C. based lawyer who has litigated in the energy and regulatory law.
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There are no other known efforts to bring similar legal action against landlords in other jurisdictions with thriving gray markets such as New York. However, a California cannabis company sued competitors selling hemp-derived cannabinoid products for damages in 2023. They alleged that the defendants’ practices violate unfair competition and false advertising laws. The case is still pending a court decision.
The letters reviewed by Outlaw were sent to landlords for dispensaries that are in the process of transitioning to licensed status, as well as those continuing to operate without a license.
It ends with the statement: “This is a very serious legal matter that could have substantial financial
consequences impacting on the ownership of these three separate properties.”
This is a developing story and will be updated. Please reach out with more information to ljdawson@outlawreport.com.
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