Cannabis Business Lawyers: What We Do

Cannabis business lawyers: helping clients get through the pot maze.
Cannabis business lawyers? We help our clients get through the pot maze.

Our Canna Law Group has busy but friendly pot lawyers in its Washington, Oregon, California, Illinois and Nevada offices. These lawyers have worked with hundreds of cannabis clients over the years on general business matters in these states and as far afield as Florida, Maryland, New York, Alaska and Hawaii (to give some examples from 2015). Because every state is a snowflake when it comes to regulating marijuana, our attorneys regularly confer and shop ideas. In all of these states, two very common questions we get are: (1) what exactly does a cannabis lawyer do, and (2) how can you help my company?

As to Question 1, Canna Law Group attorneys provide services similar to what business lawyers do in other industries; however, we focus on the ever-changing cannabis industry. Though we do no criminal work, we do provide far ranging legal services on a daily basis, including corporate structuring, contracts, dispute resolution, tax consulting, intellectual property, laborreal estate, licensing, compliance, and general operating advice. We provide these services to everyone from individual entrepreneurs and investors, to trade groups, to non-profits like NORML, and to publicly traded cannabis companies.

As to Question 2 (how can you help my company?), it’s hard to say without some background information. For the sake of example, however, let’s assume we are talking about a brand new business venture. Like any enterprise, a pot business usually starts by incorporating in its state (usually as a limited liability company or a corporation) and choosing a federal tax status. On tax issues, we sometimes confer with canna-accountants. Because of the discriminatory way the IRS treats pot businesses, we often recommend strategies different from the advice we would give to non-pot businesses. This part is fun with clients who believe that the early part of the game is about market share, not just printing money.

Once the business is established, we generally end up drafting company documents. The documents are often complex for various reasons, mostly because of the convoluted, state-by-state rules as to who can own a pot business and to what extent. If the industry were regulated like restaurants or nail salons, we would have a lot less to think about on the corporate side. For some new clients, we also endeavor to protect intellectual property in this early phase, notwithstanding that federal trademarks are unavailable. This work involves not just trademark registration, but IP licensing and other creative structures.

Real estate work is also big in marijuana. In many states, pot licenses are tied to particular locations, and pot entrepreneurs need to buy or rent property to operate. A commercial real estate transaction can be as simple as a standard lease, or more complex in the case of sale agreements, which tend to include promissory notes, trust deeds, and so on. Many of these documents require special language to deal with cannabis being a Schedule I drug, federally.

Because there are so many rules about where pot businesses can be located, we do a substantial amount of local land-use work, dealing with friendly city and county planners statewide, inspecting maps and reading byzantine code and litigating land use disputes. Many cities and counties revise their zoning and “time, place and manner” regulations to address marijuana, and pragmatic clients ask us to monitor these developments. This sometimes involves our testifying before commissions and councils, and explaining in a polite way that somebody could sue them if they don’t do X and Y and Z.

And then there are the rules. There are lots and lots of rules for pot businesses—not only under state statutes, but also through administrative agencies and local jurisdictions. Many of these rules are constantly in flux and will be for a while, because legal pot is a very new thing. For this reason, several of the pot lawyers in our firm talk compliance daily, and we have developed invaluable familiarity with many local regulators.

Finally, we litigate. Having seen state-legal cannabis roll out in a series of jurisdictions, we have observed a natural arc that sees an uptick in administrative law litigation when new rules are imposed, and an uptick in partnership beefs after pot businesses are legally allowed to operate. Like businesses in any industry, the unfortunate reality is that not everyone succeeds and litigation is often a byproduct of that.

Things change fast in cannabis and industry experience counts like dog years. If you are thinking of starting a cannabis business or you are involved in the industry, it is almost certain that, at some point, you will need to speak with a cannabis business lawyer who understands the game.