A legal battle between a Washington state-headquartered cannabis and hemp equipment manufacturer and the U.S. Customs and Border Protection has been dismissed from the U.S. district court docket. The primary goal of the court case was to prevent the manufacturer from shipping its plant material.

Based on a report by Law360, Keirton USA’s push to pose an injunction that would prohibit Border Control from stopping imports was turned down by a federal judge. During the hearing, the judge supported the agency’s push for the U.S. Court of International Trade (CIT) to acknowledge the company’s claims.

“The CIT has exclusive jurisdiction over any civil action contesting the denial of a protest,” wrote U.S. District Judge Thomas Zilly in a ruling that was sourced by Law360.

About Keirton USA and its cannabis lawsuit

Last year, a subsidiary of Surrey, British Columbia-headquartered engineering company Keirton filed a lawsuit against the CBP after a number of drug paraphernalia-containing shipments were seized.

Located in Ferndale, Washington, Keirton USA is renowned for importing a range of cannabis products made in Canada, China, Japan and Taiwan. After being turned down for a temporary restraining order, a settlement was met between Keirton and the CBP.

However, Keirton USA claimed in January that Customs agents, once again, confiscated equipment required to construct a cannabis trimming machine in Blaine, Washington. A lawsuit was filed in district court, before it was dismissed by a judge who argued that the company would go bankrupt without imports. 

A federal judge denied Keirton USA’s request for an injunction to prevent the CBP from blocking its imports and backed the CBP’s argument that the U.S. Court of International Trade could hear the company’s claims, Law 360 first reported.

Facts about cannabis lawsuits

The number of class action lawsuits being filed against companies in the legal cannabis industry is rising at a rapid rate. Some key factors that are contributing to the growth of cannabis lawsuits are stock price volatility, industry growth, regulatory confusion and avoidable mistakes by the companies that are on the receiving end of the lawsuits.

It’s unlikely that the trend will slow down in the near future. However, this is not to say that cannabis companies are unable to minimize exposure to such legal cases. 

For example, it is possible for legal cannabis companies to avoid an unexpected lawsuit by improving transparency in regards to highlighting the benefits of their products, their finances, and transaction values, among many other things.

A report recently published by Goodwin, titled, “Update on Securities Litigation Against Cannabis Companies,” highlighted how 13 class action cases had been filed against publicly-owned cannabis and CBD companies during the year 2019. In comparison with the number of cases filed in 2018, this is more than double.

Aside from stockholder lawsuits, a growing number of consumer class action cases filed against CBD companies are surging as a result of the industry attracting a constant flow of capital.