Harris Bricken
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What exactly does due diligence look like?

The best answer we found came from attorney Robert McVay, a partner in the Canna Law Group boutique within the Seattle firm Harris Bricken. McVay posted a recent guide to basic due diligence for investors—although the advice works just as well for entrepreneurs and consultants—at Harris Bricken’s CannaLawBlog. McVay’s advice includes these steps:

  • Demand to see, and verify, proof of cannabis licenses and compliance. (Records of cannabis licenses in legal adult-use states are all available online.)
  • Verify proof of company ownership.
  • Read through all existing contracts and licensing agreements.
  • Pore over accounting books and records. Know about all debt obligations and verify working capital.
  • Demand to know about all current litigation and potential legal claims.

According to McVay, all companies in the cannabis industry should have up-to-date folders with these agreements and documents to make them easily available to potential investors and business partners.

[Read in full here]

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