California Cannabis Claims: Conversion-Canna Law Blog™

California Cannabis Claims: Conversion-Canna Law Blog™



Last year, we wrote a mini-series about the five most common causes of litigation that we see in the evolving world of cannabis litigation.Given that we have seen some other trends (I wrote last time defamation Back to January), we will continue to discuss another reason for action that is often included: conversion.


California case law defines conversion as “improper domination of the personal property of others.” In essence, if someone seriously interferes with your property or property ownership, you have the right to recover the property or the full value of the property. We usually see this cause of action in breach of contract lawsuits, especially in the purchase and sale of cannabis businesses. For example, if the seller sells the product to the buyer according to the terms, and the buyer fails to pay the full contract price and fails to negotiate a return, the seller will claim for breach of contract.

Statute of limitations

According to Article 338(c) of the Civil Procedure Law, the statute of limitations for conversion is three years. However, there are subtle differences here. The clock usually starts on the date of the wrong acquisition, even if you, as the owner, do not know that the acquisition occurred). However, if the defendant is fraudulently attempting to conceal the behavior, the clock will start to ticking when the owner discovers or should have discovered the behavior.

In addition, if the collection was originally legal (as in my example above), the clock will start ticking when your request to return the property is rejected.

Elements of the conversion statement

The elements required for conversion are:

  1. The plaintiff’s ownership or possession of the property;
  2. The defendant converted due to misconduct or disposition of property rights; and
  3. damage.

There is no need for actual occupation of the property-if it is shown that the property has control or ownership, or the defendant uses the property for his own purposes, then the cause of action can be changed.


Reasons for conversion actions are often added because they allow compensatory and punitive damages in certain circumstances:

  • Compensatory damages: “Civil Code” §§ 3336-3338 is specifically for conversion damages. Generally, damages are measured by the complete fair market value of the property plus interest calculated at the legal interest rate from the date of conversion.
  • Punitive damages: The plaintiff can also recover punitive damages if it proves that the defendant committed oppressive, fraudulent or malicious acts in the conversion process with clear and convincing evidence.

This is a post from last year, please feel free to make any requests for the reasons for our next action!


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