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Defense Digest

On the Pulse…Navigating the Complexities of Cannabis Litigation: Marshall Dennehey’s Multidisciplinary Approach to a Rapidly Evolving Industry

Defense Digest, Vol. 31, No. 4, December 2025

December 1, 2025

by Kristen L. Worley and Todd J. Leon

Cannabis litigation is on the rise and impacts multiple facets of law. Marshall Dennehey’s Cannabis Law Practice Group is adept at helping clients navigate this evolving legal landscape, offering a full suite of legal services, no matter what type of claim a cannabis business or its insurers may be facing. Our services include analysis of insurance coverage and the defense of commercial general liability (CGL), professional liability, cybersecurity, employment, workers’ compensation, and health care claims.

Coverage
Our team defends insurers and managing general agents (MGAs) against cannabis-related coverage and bad faith claims, including those related to equipment breakdown, application of protective safeguard endorsements, business interruption, and crop losses. We are familiar with the industry’s underwriting goals and policies that reflect the unique risks of this segment. 

CGL Claims 
Commercial general liability claims encompass a wide range of casualty matters relevant to cannabis operations and recreational product usage. These claims may include auto liability matters, product liability claims, “Gram-Shop,” and other retail accessory risks, such as landlord liability and delivery service claims. We defend typical retail claims at cannabis dispensaries, such as falls and even assault claims involving altercations between patrons and, occasionally, employees. In doing so, we utilize varied technology assets of clients, such as surveillance and body cam footage and, where appropriate, pursue loss-transfer claims against third parties. Additionally, we defend clients in cannabis product liability matters, including claims of tainted product, and have identified a team of experts in the various fields of toxicology, analytical chemistry, food safety, and forensic science to assist in defending these claims. 

Professional Liability Claims
Our vast history and focus on defending professional liability claims across a broad range of industries affords our attorneys a unique advantage in defending claims brought against cannabis professionals, such as growers, cultivators, consultants, accountants, lawyers, MGAs, adjusters, and others who work within this space. 

Cybersecurity Claims 
Ransomware attacks and data breaches threaten cannabis operators and their obligation to safeguard their customers’ sensitive medical and personal data. Likewise, security breaches with track-and-trace software designed to track cannabis from “seed-to-sale” can interrupt an operator’s regulatory compliance. In the event of a data compromise, our cyber team is available to quickly mobilize and mitigate the damage caused by a ransomware attack.

Employment and Workers’ Compensation Claims
With the growing approval of recreational cannabis usage and the increasing number of cultivators and dispensaries popping up to meet consumer demand, it is not surprising that employment and workers’ compensation lawsuits in these fields are trending upwards. Our attorneys defend facility owners and operators when wage-and-hour disputes, discrimination and harassment, and retaliation claims arise. We also represent insurers and employers in workplace injury and occupational hazard claims. Our approach extends to cannabis industry-specific risks that include cultivation and manufacturing operations, as well as retail sales and distribution environments.

Health Care Claims
While many states have legalized the medical use of cannabis, it remains illegal under federal law. This dichotomy creates significant legal challenges for health care providers. Our attorneys leverage their experience in helping clients navigate health care regulations, such as HIPAA laws and patient privacy protections, and apply it to the uniquely complex environment surrounding the cannabis industry. We defend clients against civil claims, including medical malpractice matters, and can assist health care providers—including physicians, dispensaries and clinics—in understanding the evolving standards of care for cannabis as a therapeutic option, which can differ significantly from conventional treatments. Such claims may involve appropriate patient evaluations, dosage recommendations, and documentation requirements within the framework of state medical cannabis programs. We are also well-equipped to address challenges related to informed consent. 

As the legal and regulatory frameworks surrounding cannabis continue to evolve, so too do the risks and complexities faced by businesses operating within this area. Our Cannabis Law Practice Group stands at the forefront of this rapidly developing field, providing clients with informed, strategic, and results-oriented counsel. Our multidisciplinary approach—spanning coverage, liability, cybersecurity, employment, workers’ compensation, and health care—ensures that clients receive comprehensive support tailored to the unique challenges of the cannabis industry. Whether addressing emerging claims or guiding proactive risk management, our team is committed to protecting our clients’ interests and positioning them for continued success in this dynamic legal landscape.

Kristen works in our Philadelphia, PA office and can be reached at 215-575-2849 or KLWorley@mdwcg.com. Todd works in both our Philadelphia, PA and Mount Laurel, NJ offices. He can be reached at 215-575-2605, 856-414-6029 or TJLeon@mdwcg.com. 

Defense Digest, Vol. 31, No. 4, December 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2025 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Portrait of Carolyn Schweizer, with text below: Philadelphia Office Managing Attorney

News

Marshall Dennehey Names Carolyn Schweizer New Philadelphia Office Managing Attorney

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

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News

Marshall Dennehey Announces 2026 Ohio Super Lawyers and Rising Stars

Thought Leadership

Pennsylvania Supreme Court Takes Up the Gist of the Action Doctrine

The gist of the action doctrine has been a hot topic in legal malpractice cases in Pennsylvania over the last several years.  Beginning in 2014, the Pennsylvania courts applied the gist of the action doctrine to professional liability actions, following the Pennsylvania Supreme Court’s opinion in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014).  In Bruno, the court applied the gist of the action doctrine to a professional negligence claim, and found that a negligence claim was not barred simply because the parties were in a contractual relationship where the gist of the claim sounded in negligence. Thereafter, courts in Pennsylvania applied the gist of the action doctrine to breach of contract claims as well, finding that where the allegations sounded in negligence, a plaintiff could not recast a negligence claim as one for breach of contract. This was important because of the distinction between statutes of limitations: negligence claims must be brought within two (2) years, while breach of contract claims can be brought within four (4) years.  Then, last year, the Pennsylvania Superior Court held that the gist of the action doctrine does not apply to breach of contract claims as seen through two opinions. These opinions were Swatt v. Nottingham Village, 342 A.3d 23 (Pa. Super. 2025) and Poteat v. Asteak, et al., 350 A.3d 198 (Pa. Super. 2025). That is, the gist of the action doctrine can bar a negligence claim but it cannot bar a breach of contract claim.  This month, the Pennsylvania Supreme Court granted the petition for allowance of appeal in Poteat.  The Supreme Court phrased the issue for consideration as follows: Whether the Superior Court majority’s holding conflicts with this Court’s holding in Bruno v. Erie Insurance Co., 160 A.3d 48 (Pa. 2014), as well as Superior Court opinions that applied Bruno, and departs from almost 200 years of controlling precedent that distinguishes between causes of action in contract and tort based upon the nature of the duty that was allegedly breached? Attorneys on both sides of legal malpractice matters no doubt look forward to clarification on these issues from our Supreme Court.

Jason Banonis Holds PDI Attorney of the Year Award with the PDI President

News

Jason Banonis Named Attorney of the Year by the Pennsylvania Defense Institute

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Thought Leadership

Delaware Superior Court Clarifies Pleading Standard for Legal Malpractice Claims

In the matter of Edelstein v. Kirschner, No. N25C-09-018 FJJ, 2026 Del. Super. LEXIS 45, at *1 (Super. Ct. Jan. 29, 2026), the plaintiff law firm sued its former client for unpaid legal fees in the amount of $4,399.35. The former client asserted a counterclaim alleging legal malpractice. More, specifically, the former client claimed that his lawyer committed malpractice be recommending that he settle an underlying lawsuit by entering into a stipulated judgment for an excessive amount with interest that was accruing at “an outlandish” interest rate. The law firm moved to dismiss the counterclaim on the basis that its former client had not alleged facts reflecting that he could prove the case within the case. That is, facts reflecting that his attorneys caused him to lose the underlying case. The Superior Court held that while a legal malpractice plaintiff in cases arising from underlying litigation must prove the case within the case to survive a summary judgment motion, he does not need to plead facts reflecting as much in order to survive a motion to dismiss. While this case addresses the pleading requirements of a legal malpractice case in Delaware, it also serves as reminder that chasing unpaid legal fees from a former client can often give rise to a legal malpractice counterclaim. Attorneys seeking to collect unpaid legal fees should ensure that the fees they seek are for a significant amount, which would be recoverable if a judgment is obtained. Otherwise, the effort could backfire.

empty courtroom photo

Result

Summary Judgment Secured for Life Insurance Agent

Thought Leadership

Appellate Division Affirms Dismissal of Legal Malpractice Counterclaim Against Martin Law Firm

In Martin v. Loury, 2026 N.J. Super. Unpub. LEXIS 1617 (App. Div. July 15, 2026), Martin Law Firm represented Kirk Loury in an employment matter Mr. Loury filed against his former employer, Concord Equity Group Advisors LLC (“Concord”). The allegations included, among other things, that Loury was not fairly compensated for his employment with Concord. After a bench trial finding in Loury’s favor, the Appellate Division remanded this matter in February 2016 for a second trial. During the second trial, Concord CEO, Lee Argush, testified to lower compensation estimate than first trial. On remand, the second trial judge awarded Mr. Loury the same damages as the first judge, finding Mr. Argush not credible. After the findings during the second trial, Martin Law Firm filed an action against Mr. Loury to recover legal fees and costs of representing Mr. Loury in a second bench trial and Mr. Loury filed a counterclaim against Martin Law Firm for legal malpractice, alleging he should have received an even higher award in the second bench trial. In this allegation, Mr. Loury, through his expert, claimed that Martin Law Firm should have recalled Mr. Loury to the stand to rebut Mr. Argush’s testimony to allege an alternative theory of damages. Mr. Loury’s expert admitted that the second judge already rejected Mr. Argush's theory and accepted Loury's damages theory. The trial court barred Mr. Loury’s expert and dismissed Loury's counterclaim with prejudice before convening the collection trial, and the jury ruled in Martin Law Firm’s favor. Mr. Loury appealed the trial court's pretrial rulings barring his liability expert from testifying in support of his legal malpractice counterclaim, denying his motion for summary judgment on that counterclaim, and denying his motion to amend his counterclaim by adding attorney Joseph A. Martin as a codefendant. In affirming the trial court’s decision, the Appellate Division held that the trial court properly excluded Loury’s expert testimony in the counterclaim against Martin Law Firm because the expert could not explain how calling Loury as a rebuttal witness would have increased damages when the second judge already rejected Mr. Argush's testimony and accepted Loury's damages theory, making the expert’s causation opinion speculative. The Appellate Division also held that the trial court properly denied Mr. Loury's summary judgment motion on his malpractice counterclaim because reasonable minds could differ on whether Mr. Martin's alleged failures would have changed the second judge's damages award, given the judge already found Mr. Argush not credible, creating genuine factual disputes precluding summary judgment. Also, the Appellate Division held that the trial court properly denied Loury's May 2023 motion to add Joseph Martin individually because the statute of limitations expired in February 2022, six years after the 2016 appellate remand when Mr. Loury incurred new legal costs, and relation back did not apply because Mr. Loury knew Mr. Martin's identity throughout and strategically chose to sue only Martin Law Firm in his 2019 counterclaim.