Assessing whether a new and growing industry has risk under the Foreign Corrupt Practices Act is not really a complex assessment.
At its most basic level, it involves assessing whether the industry has points of contact with “foreign officials” in the global marketplace.
As highlighted in this post, the burgeoning marijuana industry certainly does and the FCPA risk of this industry is no different than several other agricultural companies that have resolved FCPA enforcement actions.
The marijuana industry is expanding into international markets. Cribbing from a recent post on this topic:
Aurora Cannabis recently “said it will buy Mexico’s Farmacias Magistrales, giving it entry into the Mexico medical marijuana market. […] It’s not clear what spurred Aurora Cannabis to acquire Farmacias just days after announcing an “exclusive supply arrangement” with the Mexican drugmaker. But the back-to-back deals mark Aurora Cannabis’ push into the newly legal Mexico medical marijuana market. It’s also Aurora’s latest expansion in Latin America via investments and acquisitions.
“Holigen is in the final stages of obtaining a license for one of the largest cannabis cultivation facilities in the world.”
Cosmos Holdings recently acquired Greek wholesaler Cosmofarm, an Athens-based company which supplies 1,130 pharmacies with a range of over-the-counter medicines and supplements.
InstaDose Pharma has over 200,000 farmers harvesting cannabis out of the Democratic Republic of the Congo on over 100,000 hectares of land.
Legal marijuana cultivation and selling remains regulated meaning there are likely to be many points of contact industry participants have with “foreign officials.” Moreover, the generic act of agriculture often results in various points of contact with “foreign officials” in the global marketplace.
Indeed, as highlighted below, several agricultural type companies have resolved FCPA enforcement actions.
- ADM (various commodities) – 2013
- Tyson (poultry) – 2011
- Alliance One and Universal Corp. (tobacco) – 2010
- Nature’s Sunshine Products (nutritional products) – 2009
- Monsanto (ag products) – 2005
- Chiquita (bananas) – 2001