Cannabis and Corporate Law: Legality, Entity Formation, Operational Issues, and More

The market for legal advice regarding cannabis products challenges even the most seasoned corporate lawyer. Saying "the rules have changed" is an understatement. This product was formerly illegal across the U.S.; legal cannabis is now approaching nationwide status. Legality and uniformity are two different things. Each state's form of legalization is somewhat different. Moreover, federal law remains unchanged and therefore contradicts state law.

Corporate counsel cannot in this uncertain environment rely upon instinct to advise clients. Simple decisions, such as "where to incorporate," are now driven by a new factor: the form of legalization. Further, as cannabis businesses cross state borders, questions arise such as whether they have to register to do business in other states, and how their line of business--which may be legal in one state and not another--can register without creating legal exposure.

Conversely, whether and how to do business with a cannabis company is also jurisdictionally driven. Counsel must determine whether a company in a state that has not legalized cannabis can accept funds from a cannabis company. Banks are grappling with whether to receive funds from cannabis businesses. Clients may worry that, if federal authorities press the legality issue, they may have to forfeit payments from these companies.

Listen as our panel of cannabis law experts provides the necessary details to represent clients inside and on the periphery of the cannabis industry, and identifies the issues of which corporate counsel must be conversant.