If you've noticed prices creeping up at dispensaries, you're not imagining things. Learn how tariffs are impacting the cannabis industry.
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The long weekend of Memorial Day gives us the opportunity to celebrate—servicemen, the coming of summer, time spent with our favorite people. Whether you’re throwing a party, taking a trip, or heading to a more rustic setting for some R&R, cannabis pairs perfectly with all of them. Thirty-six states have legalized cannabis for adult (aka […]
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In June 2023, Colorado Governor Jared Polis signed SB 23-271 (codified in C.R.S. 25-5-427 and regulated by 6 CCR 1010-24), a landmark bill regulating intoxicating hemp products in the state. This legislation followed recommendations from the Intoxicating Hemp Task Force, which was established a year earlier under SB 22-205.
At a time when many states were taking a hands-off approach to hemp-derived cannabinoids, Colorado took a decisive step toward regulating a rapidly expanding and largely unregulated marketplace. A step that, if not taken, would have likely resulted in a complete prohibition of hemp products in the state– something the state’s marijuana lobby was strongly pushing for.
SB 23-271 introduces a framework that, among other things, distinguishes between:
The bill also imposes milligram limits on THC content – ranging from 1.25mg to 1.75mg per serving, depending on age and packaging size, and CBD:THC ratio requirements between 15:1 and 20:1. These limits conflicted with the industry norm of 2.5mg, 5mg, and 10mg product formulations, creating confusion and logistical challenges for manufacturers.
Adjusting product formulations and packaging can be costly, particularly for small and mid-sized companies. As a result, many hemp businesses in Colorado have continued selling products that exceed the legal THC thresholds, gambling on limited enforcement. But unlike other states, Colorado has seen some enforcement. While odds of getting caught are still low, the consequences can be severe.
Violators face civil penalties of up to $10,000 per day, per product, and per violation. For example, a company manufacturing and selling five non-compliant products could theoretically face over $36 million in annual fines.
The Colorado Attorney General’s Office is taking some action against noncompliant operators.
In 2024, the Colorado Attorney General filed suit against a Greeley-based hemp company and its owner, alleging that they sold products containing up to 35 times the legal THC limit. According to the complaint, the company’s products included intoxicating cannabinoids, such as THCA, Δ8 THC, and Δ9 THC, in concentrations exceeding the 0.3% THC and mg thresholds and violating the state’s required CBD:THC ratio.
The state further alleges that the company:
This case remains ongoing. However, the AG is seeking penalties of up to $20,000 per violation, which, as discussed above, can be calculated per product, and per day. This means liability could easily reach millions of dollars if the allegations are proven.
Also in 2024, a Pueblo-based CBD company was fined $225,000, with penalties rising to $495,000 if violations continue.
The state alleged the company:
In May 2025, the AG’s office settled with two additional companies, imposing penalties ranging from $41,000 to $50,000, escalating to $141,000 – $250,000 upon future noncompliance. One company was accused of misrepresenting its products’ origins and health claims. The other allegedly allowed third-party use of its branding to market illegal hemp products.
For hemp product manufacturers and retailers, navigating this patchwork of state-by-state regulation has never been more complex – or more critical. Whether you’re producing consumable or topical hemp products, or selling on-line or in retail stores, your compliance strategy must account for every jurisdiction in which your products are manufacture, sold, or distributed.
If your company has received a warning or enforcement action – or you’re unsure if your products meet regulatory requirements in the states in which you operate, we can help. Proactive compliance is your best defense against costly litigation and enforcement.
It’s time to throw out the lazy stoner myth. Yet another study has found that cannabis promotes more physical activity — not less!
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With regulated cannabis from the NSLC, you can rely on your product to do what you expect, when you expect it, every time.
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Find the best products for Memorial Day Weekend. Leafly found the best strains, hardware, drinks & goodies for an epic long weekend.
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Hardly a week goes by without a client asking us: Can we sue the owners of a cannabis company personally for the company’s failure to pay our invoice / transfer us the license / sell us the land?
In other words, they are asking, “Can we pierce the corporate veil and access the owner’s individually owned assets to satisfy debts of the business?”
The short answer is no, usually not.
The intertwined principles of limited liability and corporate separateness generally shield owners, including cannabis company owners, from any liability for the company’s debts and obligations beyond whatever capital they have already invested. Judges love to say that piercing the veil is an “extreme” remedy and it very much is the exception and not the rule. And, though the distinction may seem subtle, veil piercing is not a standalone claim. Instead, it is a remedy. This means it is a mechanism by which a court effectuates a judgment the court has entered awarding damages and/or other relief to a party that prevails on a substantive claim, like fraudulent misrepresentation or conversion of assets by way of commingling.
So, you cannot go into court and merely ask the judge to pierce the corporate veil of a cannabis company. Instead, you have to assert and prevail on a substantive legal claim arising out of facts and circumstances that justify the court using the extreme remedy of veil piercing to facilitate a meaningful recovery. To make threading this needle even more challenging, a proponent of veil piercing generally must demonstrate that the complained-of harm results from disregard for corporate separateness–specifically such that the company and its owner are considered each other’s “alter ego.”
For example, there could be a good argument to pierce the veil if the principal of a cannabis company gives you a basis to reasonably rely on the person and company not really being separate by telling you he or she will personally cover your debt if the company runs into trouble and cannot pay you. The same would be true if the principal disregards corporate separateness by commingling his or her assets with those of the company and the company runs into trouble because it cannot pay you.
These principles first emerged in the 19th century in England’s Chancery Court, which could provide remedies the courts of law could not such as injunctive relief (ordering someone to do or not do something), or specific performance (ordering someone to perform his or her side of a contract). Whereas courts of law were hemmed in by the common law system of following precedent (known as stare decisis), the Chancery Court could explicitly consider factors like fundamental fairness.
When the court decides if the circumstances of the case warrant some degree of veil piercing, there are some well known factors the court will consider. These are often as misunderstood as they are invoked: undercapitalization and failure to observe corporate formalities. While the terms themselves hardly need definition, the application of these factors to the veil piercing analysis can be something of a hot mess. While it is true many instances of successful veil piercing involve undercapitalization or disregard for corporate formalities, neither is sufficient on its own to trigger the remedy. Instead, the undercapitalization or inadequate corporate separateness needs to be causally related to some kind of cognizable fraud or injustice suffered by the proponent of piercing.
In sum, while the idea of holding individual owners personally liable for a cannabis company’s debts is understandably attractive to creditors left empty-handed, the threshold for piercing the corporate veil remains intentionally high. Courts are reluctant to disturb the foundational principles of corporate law unless there is clear, compelling evidence that the owners misused the corporate form to perpetrate a fraud or injustice. For better or worse, frustration with nonpayment simply is not enough.
