Cultiva: Cresco v. GTI – Non-Competes in Cannabis


MSO Cresco Labs (“Cresco”) has filed suit against MSO Green Thumb Industries (“GTI”) based on the claim that GTI “poached” a former Cresco employee. This employee was Cresco’s director of technical services and had an employment agreement with a non-compete clause. According to the complaint, Tonge was enticed to leave Cresco and to take a similar role at GTI by a GTI employee who also happened to be a former Cresco employee. Cresco claims that the former employee has been reaching out to numerous Cresco employees “urging them to resign to work for GTI, despite knowing that these employees are subject to covenants not to compete.”

While this sort of action is not uncommon in various industries, it calls into question a few interesting developments for modern cannabis. For starters, while Tonge was not a part of this group, many of the large MSOs went through rounds of layoffs over the last 24-36 months, both during COVID shutdowns and in the wake of post-COVID slowdowns in sales. GTI’s spokeswoman commented in a statement that she believed Cresco was wasting corporate resources monitoring former employees in order to enforce their non-compete clauses rather than focusing on their own business. At a time where many companies are struggling to make ends meet, it would appear that devoting substantial money towards blocking former employees from gainful employment might not be the best use of resources.

Beyond that, this lawsuit comes at a time where the Biden administration’s antitrust regulators have proposed to largely ban the use of non-compete clauses. The FTC is considering a prohibition on numerous clauses used in employment agreements which obstruct someone from gainful employment. President Biden stated, “For decades, I’ve fought for the notion that if your employer wants to keep you, they need to make it worth your while with good pay and benefits.” Companies are entitled to protection over their intellectual property through trademarks, copyrights, and patents, and this federal policy initiative shows that those protections are not meant to include control over a person’s ability to work. If that former employee violates IP rights by stealing a patented process, a company will still have the right to enforce their patent.

California, North Dakota, and Oklahoma, as well as the District of Columbia, have already outlawed the use of non-compete agreements and other states have restricted their use among certain groups of workers. With this change in policy at the FTC, it would appear the federal government is looking to make this the overarching policy in the US. We likely won’t see a final rule in place until 2024 but it does point to a big shift for worker’s rights. If you believe you are being subjected to an unlawful non-compete or need advice and guidance on creating enforceable non-compete clauses, feel free to reach out:; 503-420-5033.

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Matt Maurer – Minden Gross
Jeff Hergot – Wildboer Dellelce LLP

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Tim Morales – The Cannabis Industry Association Costa Rica

Elvin Rodríguez Fabilena


Julie Godard
Carl L Rowley -Thompson Coburn LLP

Jerry Chesler – Chesler Consulting

Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

William Bogot – Fox Rothschild

Valerio Romano, Attorney – VGR Law Firm, PC

Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

Washington DC
Teddy Eynon – Partner Fox Rothschild