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Cannabis Business Formation
Legal Strategies for a
Fast-Growing Industry
Helping clients choose legal and tax structures to support long-term growth.
Contact UsProactive Legal Planning
Our cannabis business attorneys have represented hundreds of cannabis and ancillary businesses across the country and internationally in structuring their enterprises and drafting formation documents to promote their long-term growth and security.
New businesses must consider many elements when forming their cannabis companies. One crucial element is entity selection; choosing to classify as a corporation, cooperative, partnership, limited liability company or other structure presents a unique set of advantages and disadvantages. The legal and tax structures surrounding entity selection can be as important as the classification itself. Operating agreements, corporate shareholder agreements, and partnership agreements can create vastly different economic and management rights and responsibilities for new business owners.
Harris Sliwoski’s team of cannabis business lawyers work with clients from our offices in California, Washington, Colorado and Oregon across a broad range of business formations issues. Our experience will guide you through the legal strategy that best complements your near- and long-term business objectives.
Our cannabis business formation services include
- Entity selection and registration
- Drafting of governance documents
- Financing and capital contribution negotiations
- Corporate governance and business operations
- Commercial contracts and corporate transactions
- Employment contracts
- Intellectual property protection
Contact These Locations for Cannabis Business Formations
Starting & Licensing a Cannabis Business: Frequently Asked Questions
What are the first legal steps for starting a cannabis business, and do I need local approval?
Start with the location. Before you form the entity, sign the lease, or take investor money, confirm the exact activity is allowed at the exact site. Depending on state law, a city or county can ban the activity outright, limit it to a narrow zone, require a separate local license, impose distance buffers, or attach conditions that make the project impractical even where it's technically allowed.
Once the site works, the rest has to line up. The license application, operating agreement, investor rights, lease, financing documents, and tax structure should all tell the same story about who owns the business, who controls it, and what it's allowed to do.
How long does it take to get a cannabis license, and how much does it cost?
There's no single answer. Anyone who gives you a firm number without knowing your state and license type is guessing. Timing depends on the state, the license category, whether the jurisdiction is accepting applications or running a capped or lottery system, local approval requirements, and how clean your disclosures and background checks are going in. Some states clear a straightforward application in a few months. Others take over a year, especially where local approval has to occur before the state will even look at the file. The application fee is often the smallest piece of the cost. Real estate, buildout, security systems, consultants, legal fees, local permits, and months of carrying costs before the business generates revenue typically dwarf it.
Do I need a cannabis license before I start selling cannabis products?
Selling marijuana without the required license creates enforcement exposure, tax problems, future licensing problems, and personal liability. The license needs to be in place before sales begin.
Hemp, CBD, and other cannabinoid products still need legal review before launch, even though the licensing picture is different. The risk turns on THC concentration and amount, cannabinoid profile, product form, testing method, label, marketing claims, age restrictions, and destination state. A product can be hemp-derived and still violate state cannabis laws, the Controlled Substances Act, FDA rules, FTC advertising rules, labeling requirements, or local restrictions.
Who must be disclosed or pass a background check in a cannabis business?
Most states require disclosure and background checks for owners above a certain threshold, officers, and managers with operational control. Many states reach further, covering financiers, landlords with certain economic terms, and people without formal equity who still have real influence over the business.
States treat old cannabis or other drug convictions differently. Some now disregard them for licensing; others don't. Before bringing on an investor, manager, or key employee, confirm what disclosure that person triggers under your specific license, not under the last state you dealt with.
Can a cannabis business be legal under state law but illegal under federal law?
Yes. Federal law still reaches banking and payments, taxes, interstate commerce, insurance, immigration, bankruptcy, and access to ordinary business services.
Local rules add zoning, buffers, permits, and enforcement priorities. Private parties add another layer through landlord restrictions, lender objections, insurance exclusions, and payment-processing rules. A business can clear state licensing and still run into a city, county, landlord, lender, bank, or insurer problem. A structure that works in one state may not work in the next, whether that's contracts, ownership arrangements, websites, advertising, or labels.
Featured In
AWARD-WINNING
CANNA LAW BLOG
An intelligent, timely resource for the cannabis industry
Beyond advising individual businesses, our cannabis attorneys are committed to fortifying, defending, and building credibility for the industry as a whole. Harris Sliwoski’s cannabis business lawyers are more than legal strategists—they are thought leaders: forward-thinking bloggers, educators, writers, and speakers.
They regularly write articles for legal journals and frequently post to our acclaimed and widely followed Canna Law Blog. We speak to business and trade groups, academic institutions, and government bodies on a variety of cannabis legal issues, and our cannabis lawyers are frequently quoted by global, national, and local media outlets. We also have compiled (and are forever adding to) a Cannabis Glossary, to help with industry terminology.
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Our Clients' Successes
“Harris Sliwoski expertly guided us through the formation of our company. They continue to assist with necessary registrations and compliance with numerous regulations. They were able to promptly answer all our many questions and provide understandable options, explanations and practical advice. We expect to continue to use Harris Sliwoski on a regular basis as our company expands. They were also able to introduce us other professional experts. We would not hesitate to recommend Harris Sliwoski to any companies in need of legal advice.”
Three Continents Foods LLC
This law firm was a huge help as our company went through the process of commercial licensing in the California cannabis industry. They have helped us with a variety of legal issues in a timely fashion, while clearly communicating with us throughout the process. Everyone we’ve worked with at Harris Sliwoski is an expert in their field and we have always felt that we were in good hands through our legal representation.
Wil Crummer, CEO PRO Farms
Legal stuff is always scary. And I've had to play offense a couple times, begrudgingly. To have Harris Sliwoski have my back? It made things a lot less prickly. They quickly walked me through my options, and were refreshingly consistent in their communications, timing and billing. I've been lucky to stay out of the legal side of things my whole career, thankfully. When things went a little wrong, Harris Sliwoski quickly made things right.
Aaron Draplin, Founder Draplin Design Co.
I am impressed with this law firm. They answered all my questions regarding cannabis businesses and the California cannabis framework, and they have helped me with a variety of legal issues in a timely fashion, while always clearly communicating with us throughout the process. They also redirected me to other quality people for my business needs. Everyone I worked with at Harris Sliwoski is an expert in their field, and I was in good hands throughout my legal representation.
Corey T., CEO Thinc Cubed, LLC
I have been working with the lawyers at Harris Sliwoski for more than 20 years both as a business owner and as an executive at a large east-coast health system and that is because they have always efficiently provided high level and clear international law advice. Most recently, Harris Sliwoski provided legal support on many matters related to procuring medical products worldwide. Their support was particularly helpful to during the onset of COVID, when there was a big need for securing PPE quickly, all while navigating complicated international and domestic legal requirements. Harris Sliwoski’s team of international lawyers helped by conducting rapid-fire due diligence on potential suppliers, navigating the legal logistics for getting product from overseas and through U.S. customs, and drafting contracts to protect against various sorts of horribles. They did this by essentially providing what amounted to 24/7 service. I cannot recommend them highly enough.
Dan Pak Hospital Supply Chain Executive
Harris Sliwoski has represented our company in the legal cannabis industry for years. Harris Sliwoski has advised us in a wide variety of legal matters, and they are truly experts in their field. I would highly recommend Harris Sliwoski to anyone with questions about cannabis law, or any legal matters. They have been great for our Company, and will continue to guide us as our industry evolves
Matt Hurt, COO Cannabis Nation
You won't find a better partner than Harris Sliwoski when trying to navigate the complex world of healthcare regulations. They not only give sound and reliable legal advice, but they are also very responsive and are able to guide you in a way that helps you reach your business objectives as well.
Joseph Axelrod, General Counsel Irwin Naturals
When we started the process of building a 'seed to sale' cannabis company in Oregon, we saw the need for expert legal counsel. The cannabis sector is fraught with potential peril at every turn, and we wanted the best legal advice we could find. After talking to several firms and individuals, we feel extremely fortunate to have chosen Harris Sliwoski as our legal counsel.
Tony Theiss, CEO and Co-Founder Redbarn Cannabis
We use Harris Sliwoski on all our international legal matters, including on our international litigation matters. We have over the last few years been involved in a couple big international legal disputes and Harris Sliwoski’s international dispute resolution team provided us with expert legal assistance on both matters. They were always very careful to explain to us what they were doing and why and what their actions would likely cost us in legal fees. Most importantly, we did extremely well on both cases and I have no doubt Harris Sliwoski was a big factor in that.
Kevin English, CEO We Are Camp
We have used Harris Sliwoski for legal help related to our international manufacturing. The lawyers with whom I worked had extensive familiarity with the international legal issues involved in our various projects and offered us key insights. I particularly appreciated how they always quickly and efficiently do what they say they will do and always within their cost estimates.
Andrea Barona Valladolid, Senior Legal Counsel Fairphone