A couple of months ago, my colleague Vince Sliwoski wrote Oregon Cannabis Dispensary Sales: What We Are Seeing on Valuation, which focused on the secondary market for cannabis licenses and businesses. Vince explained that the retail market, i.e. the purchase and sale of dispensaries, is still mostly done on multiples of revenue. But what is
This is the season of the year where cannabis business owners start to take a hard look at their end of year finances to decipher how profitable the company has been and whether and how their employees and other key personnel should share in that profit alongside the owners. Some marijuana and hemp employers do
The Oregon secondary market for cannabis licenses and businesses remains lively. We have been helping industry buy and sell these businesses since 2016. This post is mostly about pricing for retail plays, which is still an evolving standard, but a standard nonetheless. First, some context. Over the past few years, there have been two significant
As legal marijuana markets have matured in Washington, Oregon, California and elsewhere, so too have the kinds of legal disputes involving marijuana businesses. Increasingly common are legal disputes between owners of a marijuana business that involve allegations of financial malfeasance, breach of fiduciary duty, freeze-outs, fraud, and other claims common to business litigation outside of
A few days ago, I wrote a post on cannabis investing and the concept of debt v. equity. I noted that it’s very common to see lenders ask for personal guarantees when providing loans to cannabis businesses. Guaranty agreements are a hugely important type of contract that deserve their own post. Below, I will get
Towards the end of 2019, it seemed that cannabis investments had all but dried up. Today, our cannabis lawyers are seeing a huge uptick in investment transactions of all kinds in cannabis and hemp businesses. With investments on the rise again, we plan to do more posts on various legal aspects of cannabis investments. At
The officers, directors, partners, members and managers of cannabis companies need to understand what constitutes a “security” and how to comply with applicable securities laws. The failure to do so may result in their personal liability for securities fraud. Let’s start with what constitutes a “security.” As my colleague Jonathan Bench recently explained in layperson’s
If you have spent much time around the world of private capital raising, then you know that there are only two avenues for a company that wants to bring on investors. Either you register your capital offering (equity, debt, or some hybrid) or you find a state or federal filing exemption that you can qualify
For the past eighteen months, hemp stakeholders have been begging the federal government to regulate the hemp-derived cannabidiol (“Hemp CBD”) industry. As of date, the Food and Drug Administration (the “FDA”) has received over 4,000 comments from shareholders on the safety, manufacturing, product quality, marketing, labeling, and sale of Hemp CBD products. There is no doubt that a
I can’t count how many times I have been talking to a client about a business venture, and I stop them in the middle of their explanation and say, “You just issued securities.” I get a blank stare looking back at me. Then I say, “Securities is one thing you do not want to get
