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LEGAL REPORT LITIGATION As the legal cannabis market matures, lawyers are seeing a surge in "Green Rush" litigation due to sector's growing pains IT IS NO exaggeration the so-called Green Rush took Canada by storm as the biggest over- night industry in the country since prohibition. Since legalization in 2018, the sector has been experiencing maturation — and the growing pains that come along with it. "We're seeing a trend of an uptick in litiga- tion generally and the last few months in par- ticular," says Robin Linley, a partner at Blake Cassels & Graydon LLP. The sector is experiencing a spike in the se- curities-related space. Although legal action is a natural part of the lifecycle of a company, it's unusual to have this size of industry arrive so quickly — and, therefore, the growing pains are more enhanced than with an industry growing at a slower pace. Prior to legalization, there was a lot of en- thusiasm in the market and much incentive to get up and running as soon as possible, and Linley says the stock market reflected that in the share price of several different companies. Arguably, some failed to "dot their i's and cross their t's" and once legalization came around and things settled down, it led to the influx of securities-related litigation. "People don't necessarily think about risk in the same way as they do once the market starts to mature, and I think they're going through that maturation period now," he says. "It was always expected, and we at Blakes tried to posi- tion ourselves for that in the future and also to proactively give our cannabis clients advice to avoid some of those issues." Linda Fuerst, a senior partner and securities litigation expert at Norton Rose Fulbright Can- ada LLP, agrees it wasn't "a huge surprise" to lawyers observing how things progressed over the past 18 months. "It became apparent things weren't rolling out as originally anticipated with this partic- ular industry," she says, adding that, while she sees class actions against a range of companies, the focus on Canadian cannabis companies in a fairly short period of time is unusual. "The reality is many of the players may not have had extensive public company experience. We have retail investors jumping in who prob- ably really shouldn't have been jumping in to invest in the cannabis market." She points to an Ontario Securities Commis- New kid on the block 40 www.canadianlawyermag.com