Is my Cannabis Business Lawyer Performing Enough for My Marijuana Business?
A client recently asked me for any lawyer referral inside a state where we do not have an attorney on the ground. It was for a real estate and marijuana license acquisition take care of all the usual complications: obtaining approval from state licensing authorities and neighborhood authorities, obtaining money into escrow from several sources, engaging in (extremely) last minute face to face negotiations, and recording property and security interests together with the state and county. It’s the kind of deal exactly where the client wanted boots around the ground, which tends to make sense. So, I gave our client the name of a local attorney we know and respect. Unfortunately, that lawyer just occurred to be representing the other side on the deal and so he was conflicted out. The client asked for a different referral, and, depending on what we saw available, we merely couldn’t come up with one we trusted to complete far more than just go through the motions on our client’s behalf. Get additional information about cannabis lawyer
Far also several lawyers with little to no business law experience are branding themselves as “cannabis lawyers” today simply mainly because cannabis is actually a “hot” legal location. And quite handful of of these so-called cannabis lawyers meet what we take into consideration the minimum requirements to supply competent business counsel within the legal cannabis space. Here are a couple of factors we feel any individual hiring a business lawyer for their marijuana operations needs to be seeking for:
Criminal vs. Corporate Viewpoint: There’s nothing at all stopping a criminal attorney from understanding a brand new set of capabilities and transitioning to a predominantly corporate practice, but seasoned criminal lawyers tend to have an extremely diverse point of view than commercial lawyers on the subject of corporate clients, and especially in regards to transactional operate. In Washington and California, for example, a variety of attorneys with criminal backgrounds advised their consumers to not spend state taxes simply because they didn’t want their consumers “to incriminate themselves” by admitting to cannabis sales on tax types. That tips may perhaps make sense when your purpose would be to hold your client from confessing to federal crimes, but it led to a big quantity of marijuana enterprises incurring massive interest and penalties in addition to a number ultimately had to shut down simply because of it. We nonetheless see the effect of this poor advice when we get a brand new client who failed to pay its taxes within a timely matter be precluded from securing a license either in its home state or in another state. Many what superior business lawyers do is to add transparency to cannabis businesses that is now needed by most states. For far more on this, check out Marijuana Business Self-Policing.
Boilerplate Bonanza: All attorneys have boilerplate templates. If a client desires a sales contract, I have several diverse sales documents I use to start the transaction. That said, I then heavily customize these documents for every person deal because each and every deal constantly demands different terms and situations. Too a lot of occasions I’ve seen documents drafted by opposing counsel who did absolutely nothing extra than “find and replace” for the parties’ names on a key document then ship it out for signature. People don’t hire significant corporate attorneys to obtain that sort of contract, they hire Legal Zoom. And, for marijuana businesses, that boilerplate contract is unsafe due to the fact nine occasions out of ten it's going to not accomplish the goals on the parties and it may set the parties up for imminent failure within the deal. People use genuine corporate lawyers because they need to have a contractual connection specific to them and to their scenario, which might be wildly difficult provided the continuous adjustments to marijuana regulations. For those who get the feeling that your lawyer is just filling out boilerplate types, you have an issue.
Scriveners: Equivalent to boilerplate contracts, customers need to also be on guard for “scriveners.” These are attorneys who just translate a client’s requests, bar none, into legalese. Though that may well appear like what a client desires, the client isn’t obtaining the full advantage of actual counsel in that interaction. Your lawyer must be asking you concerns and/or pushing back on you, letting you know whether or not your deal points appear fair or unfair, no matter whether they comply with regulations, what the liability is to you for those terms, and irrespective of whether the requested terms are common or our from the ordinary course of business. Most importantly, your lawyer ought to have carried out a great number of deals like yours that she or he can inform you regarding the business and legal options you might have missed and about other similar deals she or he has handled. Attorneys that practice in the corporate space day in and day out have a one of a kind point of view that could add worth in negotiating the deal. If your lawyer is just transcribing your just about every wish without the need of question or just acquiescing to all of your demands, you should be worried.
So, don’t just undergo the motions with your lawyer and think you’re protected within your marijuana dealings. Your lawyer should be taking an active corporate part as your protector and crafter of safeguards for your marijuana business. If they’re not, it'll only be a matter of time prior to it comes back to bite you and your business.