Photo of Peter M. Grace

Peter M. Grace is a litigation associate in Dykema’s Business Litigation group. Mr. Grace graduated cum laude from Wayne State University Law School in May 2019. While in law school, he served as President of the Student Bar Association, Managing Editor of The Wayne Law Review, and was a member of Wayne Law’s moot court program. During his time at Wayne Law, Mr. Grace interned with the United States District Court for the Eastern District of Michigan and the United States Attorney’s Office for the Eastern District of Michigan.

Cannabis companies nationwide are facing yet another statutory obstacle that can have serious (and potential ruinous) consequences for the emerging industry if not appropriately addressed—the Telephone Consumer Protection Act (“TCPA”). There is a recent uptick in class-action lawsuits filed against cannabis companies across the country premised on alleged violations of the TCPA including lawsuits in Michigan and California. These complaints allege cannabis companies sent unsolicited marketing text messages or placed automated phone calls to individuals without their consent. Cannabis dispensaries and other cannabis-related businesses should add TCPA compliance protocols to their checklist of regulatory requirements to be satisfied in this quickly emerging industry.

The TCPA

Enacted in 1991, the TCPA heavily regulates the ability to send phone, text, or facsimile messages through automatic telephone dialing systems. Non-compliance with the statute can be costly, as companies found to have violated the TCPA can be liable for $500 per call or text sent in violation of the Act, and up to $1,500 for willful or knowing violations. Damages are also not capped under the TCPA, so even a small number of texts or calls sent to a large number of recipients can lead to hefty damage awards. The ability to recover significant damages results in most TCPA claims being brought as class-actions. As a result, it is imperative that cannabis businesses that communicate with customers via text or by phone understand the rules governing the TCPA to avoid or at least minimize their liability exposure.
Continue Reading Why Cannabis Companies Need to Care About the TCPA