“Initial litigation offering” (ILO) is a term that was recently coined by Apothio LLC, an agricultural research and commercial hemp company. This new concept is being spearheaded by Apothio to fund its response to officials in California who allegedly destroyed its billion-dollar hemp crop in 2019. The goal is to attract investors interested in a piece of the lawsuit filed against these California officials by launching a $5 million public offering.
The enforceability of a cannabis-related contract is determined by a variety of circumstances: What is the language of the state statute related to legalization? When was the contract formed, and was the conduct illegal at that time? No matter the circumstance, this challenge is one that cannabis businesses and their legal teams should prepare for.