Is my Cannabis Business Lawyer Doing Enough for My Marijuana Business?

 

A client not too long ago asked me for any lawyer referral within a state where we don't have an lawyer on the ground. It was for any real estate and marijuana license acquisition deal with all of the usual complications: getting approval from state licensing authorities and nearby authorities, finding money into escrow from a lot of sources, engaging in (really) final minute face to face negotiations, and recording property and security interests using the state and county. It is the kind of deal where the client wanted boots on the ground, which tends to make sense. So, I gave our client the name of a local attorney we know and respect. However, that attorney just occurred to become representing the other side from the deal and so he was conflicted out. The client asked to get a distinctive referral, and, based on what we saw around, we simply couldn’t come up with one we trusted to accomplish more than just undergo the motions on our client’s behalf. Get additional details about marijuana attorney

 

Far as well lots of lawyers with small to no business law experience are branding themselves as “cannabis lawyers” nowadays merely due to the fact cannabis is really a “hot” legal location. And quite few of those so-called cannabis lawyers meet what we take into account the minimum specifications to supply competent business counsel inside the legal cannabis space. Listed below are several issues we assume any individual hiring a business lawyer for their marijuana operations needs to be searching for:

 

Criminal vs. Corporate Perspective: There’s practically nothing stopping a criminal attorney from understanding a new set of capabilities and transitioning to a predominantly corporate practice, but seasoned criminal lawyers tend to possess a really distinct perspective than commercial lawyers on the subject of corporate customers, and specifically in regards to transactional perform. In Washington and California, as an example, numerous attorneys with criminal backgrounds advised their clients to not spend state taxes due to the fact they didn’t want their clients “to incriminate themselves” by admitting to cannabis sales on tax forms. That advice may well make sense when your purpose should be to preserve your client from confessing to federal crimes, however it led to a large number of marijuana companies incurring enormous interest and penalties in addition to a number sooner or later had to shut down mainly because of it. We still see the influence of this poor guidance when we get a new client who failed to spend its taxes inside a timely matter be precluded from securing a license either in its home state or in another state. Lots of what very good business lawyers do is to add transparency to cannabis firms which is now necessary by most states. For much more on this, verify out Marijuana Business Self-Policing.

 

Boilerplate Bonanza: All attorneys have boilerplate templates. If a client desires a sales contract, I have a variety of distinctive sales documents I use to start the transaction. That stated, I then heavily customize these documents for just about every individual deal considering that each deal generally demands various terms and situations. As well lots of occasions I’ve observed documents drafted by opposing counsel who did practically nothing more than “find and replace” for the parties’ names on a key document after which ship it out for signature. People do not hire critical corporate attorneys to have that sort of contract, they hire Legal Zoom. And, for marijuana organizations, that boilerplate contract is unsafe since nine instances out of ten it will not accomplish the goals from the parties and it may set the parties up for imminent failure in the deal. People use actual corporate lawyers for the reason that they have to have a contractual partnership specific to them and to their scenario, which is usually wildly complicated offered the continual changes to marijuana regulations. If you get the feeling that your lawyer is just filling out boilerplate types, you have a problem.

 

Scriveners: Similar to boilerplate contracts, consumers should really also be on guard for “scriveners.” These are attorneys who simply translate a client’s requests, bar none, into legalese. Though that may look like what a client desires, the client isn’t receiving the full benefit of actual counsel in that interaction. Your lawyer needs to be asking you queries and/or pushing back on you, letting you realize irrespective of whether your deal points look fair or unfair, irrespective of whether they comply with regulations, what the liability is always to you for all those terms, and whether the requested terms are regular or our of the ordinary course of business. Most importantly, your lawyer should have carried out so many deals like yours that she or he can inform you in regards to the business and legal options you might have missed and about other equivalent deals he or she has handled. Attorneys that practice within the corporate space day in and day out possess a special perspective that will add value in negotiating the deal. If your lawyer is just transcribing your every single wish without having query or just acquiescing to all your demands, you should be worried.

 

So, do not just go through the motions along with your lawyer and consider you are protected within your marijuana dealings. Your lawyer ought to be taking an active corporate part as your protector and crafter of safeguards for the marijuana business. If they’re not, it is going to only be a matter of time ahead of it comes back to bite you as well as your business.