Investors in marijuana businesses face many risks. To name just a few: the subject of their investment is illegal under federal law; the businesses in which they are investing face heavy tax burdens because of IRC 280e; and the lack of access to banking services means businesses operate nearly exclusively cash, which makes tracking sales,
Most people who are (luckily) not familiar with litigation believe alternative dispute resolution (or “ADR”) clauses in their contracts are essentially boilerplate language that’s recycled again and again in every contract. However, well-drafted ADR clauses can not only give you a huge advantage if an issue comes up, they may also cause your counterparty to
Cannabis businesses are usually limited liability companies (LLCs). There are a lot of reasons for this, starting with the fact that LLCs are more flexible than corporations, which have much more rigid rules. To take advantage of those flexibilities, and for a lot of other reasons, LLC owners (called members) need an operating agreement. Below,
Data reveal a concerning increase in violent crime in many U.S. cities during COVID in 2020 and 2021. Increasingly, cannabis businesses, particularly dispensaries, are targets for robbery or other criminal activity. The reason that cannabis businesses are being hit particularly hard is not hard to fathom. Federal law still treats cannabis as a Schedule I
Previously we wrote about equity compensation for cannabis employees from the perspective of companies. We have been dealing with more and more companies adding equity to their overall compensation scheme, so now is a good time to revisit it from the employee perspective. For an overview of the types of equity compensation available, see here.
Even though California has been issuing cannabis licenses since January 2018, I still get the same questions around cannabis regulatory, corporate and transactional items even from seasoned California cannabis licensees. This post constitutes a California cannabis FAQ list for readers with common California cannabis questions. Who can own a California cannabis business? Literally anyone at
A lot of people want to save a buck during contract negotiations. These folks usually do not not use a lawyer for drafting term sheets or other initial matters. Sometimes, this can work out well. For bigger or more complicated deals, or for deals with a difficult opponent, this can be a bad idea. Let’s
Services agreements are a problem in the Oregon cannabis industry. These agreements have been around since at least 2016, when our office and at least one other law firm developed early templates in consultation with the Oregon Liquor and Cannabis Commission (“OLCC”). That form was called a “management agreement” and you will see them referred
Cannabis purchase order financing is gaining speed in the industry. Because of robust state regulation, high operational costs, high taxes, and the federal illegality of marijuana, a lot of cannabis businesses struggle financially in their day to day business operations. Approaches to this problem takes various shapes and forms across the industry. There are threats
I started as a lawyer in the cannabis industry in 2010. Twelve years in there has been immense progress and maturation at the business level for cannabis licensees. This post is dedicated to the top ten list of which arrows all cannabis companies, regardless of state, size, culture, or market share, must have in their
