Published in Law360 on May 23, 2025. © Copyright 2025, Portfolio Media, Inc., publisher of Law360. Reprinted here with permission.
In the rapidly evolving landscape of Colorado’s cannabis industry, maintaining compliance with state regulation is not just a legal obligation but a critical component of business strategy. As cannabis products undergo rigorous testing, the potential of product contamination looms large, posing significant challenges for licensees.
This article was originally published in Reuters and Westlaw Today on April 25, 2025.
Cannabis businesses operating in state-legal markets face a patchwork of testing requirements that vary from one jurisdiction to another. In the absence of federal oversight, each state has developed its own testing rules, including for licensing labs, required contaminants to test for, sampling procedures, and allowable remediation of contaminated products.
METRC, Inc., the predominant provider of seed-to-sale tracking software used by state regulatory bodies overseeing legal cannabis markets across the U.S., faces serious allegations detailed in a recent lawsuit filed in Oregon. The lawsuit, brought by a former executive at METRC, accuses the company of whistleblower retaliation and wrongful termination under Oregon law. Central to the plaintiff’s complaint are allegations that METRC knowingly ignored substantial compliance violations within its tracking systems in California, potentially facilitating illegal diversion of cannabis products. The litigation raises critical concerns for cannabis regulatory compliance, not only in Oregon and California but also in the 25 other jurisdictions that rely on METRC’s systems.
In a significant regulatory shift, the Texas Lottery Commission has enacted an immediate ban on lottery ticket courier services in the state, effective February 24. This decisive move marks a stark departure from the commission’s previous position that it lacked jurisdiction over these couriers. State officials in Texas backing the change assert that groups who buy mass quantities of lottery tickets using unregulated lottery couriers avoid safeguards in the regulatory system and undermine public trust in the lottery system.
On January 22, lawmakers in Colorado introduced SB25-076, (the act) which aims to address concerns surrounding the availability of intoxicating products (including regulated cannabis products) within the state, especially to children and young adults. To address these concerns, the act would impose new requirements on licensed businesses related to serving sizes and labeling requirements and would restrict sales of certain products to adults under 26 years old. While the intent behind the act is to mitigate potential risks associated with high-potency cannabis, the approach taken is arguably too extreme and places excessive burdens on the industry. A more nuanced strategy is needed to balance public health concerns with the operational realities of licensed cannabis businesses.
In the 12th and final episode of our 12 Days of Regulatory Insights podcast series, Cole White, a member of Troutman Pepper’s Regulatory Investigation, Strategy, and Enforcement (RISE) practice group, is joined by Stephen Piepgrass, RISE practice group leader, to discuss recent developments in the online gaming industry.
In the second episode of our special 12 Days of Regulatory Insights podcast series, Cole White, a member of Troutman Pepper’s Regulatory Investigation, Strategy, and Enforcement (RISE) practice group, is joined by colleagues Stephen Piepgrass and Mike Yaghi to analyze the rising regulatory scrutiny of artificial intelligence (AI) technologies by state attorneys general (AG).
This year’s election saw no shortage of surprises at the federal, state, and local levels, and Colorado Springs, CO was no exception. Although the results have yet to be officially certified, it appears that voters have approved an initiative that would authorize recreational cannabis sales in the city. Colorado Springs has long stood as one of the major hold outs of recreational cannabis legalization in Colorado, due largely in part to its community of active service members. Alongside the recreational sales authorization, a separate ballot measure that would have amended the city’s charter to prohibit any recreational sales within the city failed by only 1%. That slim margin, coupled with continued legal uncertainty, may foreshadow a tumultuous implementation process.
Introduction
The interplay between the unintentional federal legalization of intoxicating hemp-derived products under the Agriculture Improvement Act of 2018 (the 2018 Farm Bill) and state regulatory frameworks is increasingly testing the limits of jurisdictional boundaries, as shown in a recent decision remanding a Connecticut consumer protection case against RZ Smoke, Inc. back to the Connecticut Superior Court.
Just before the close of the Colorado legislature’s 2024 session in mid-May, lawmakers approved a bill aimed at streamlining several deficiencies in the state’s regulation of marijuana businesses. While not all of the bill’s intended fixes were passed, certain provisions will facilitate significant changes for businesses, including for licensing processes, contaminant testing protocols, reporting obligations, compliance procedures, and operations management practices.