New Jersey, Virginia, and New York are the most recent examples of how the movement to fully legalize cannabis in the United States is gaining steam. And along with this push, a critical service is growing rapidly as well: the cannabis attorney.
Are you thinking about starting a cannabis business? It is in your best interest to interact with a cannabis attorney from the very moment you begin learning how to start a cannabis business, to your eventual expansion or sale. There are important stages at which a Cannabis lawyer is a must to engage with, including some situations you might not even have anticipated.
This comprehensive, yet easy-to-digest guide is dedicated to providing you with all the information you need about marijuana lawyers. By the end of it, you’ll understand…
Let’s start by getting some of the miscellaneous questions involving cannabis lawyers out of the way.
The legal risks involved in starting a cannabis business are so deep, complicated, and far-reaching that it would take another guide to fully explain them all. There is a very high chance of penalties, a total loss of your investment, and even criminal prosecution if you fail to follow state regulations. It is for this same reason that a newcomer, especially one with no legal background or familiarity with state laws involving marijuana, will undoubtedly have a difficult time getting started and becoming successful in this industry without the assistance of a cannabis lawyer.
Since your cannabis lawyer will have to keep track of case law and changes in policy specific to your state, it makes absolute sense that your cannabis lawyer should be someone who fully understands the laws and regulations in your state.
When it comes to the topic of cannabis attorneys the most common reference is for a cannabis attorney for a cannabis business. However there are attorneys that focus on the criminal defense of those related to cannabis. Not to be confused with Cannabis Business Attorneys, criminal defense cannabis lawyers will defend people against cannabis-related charges. Typically, they specialize in keeping their clients out of prison by homing in on the constitutional issues involving how authorities obtained evidence against them. For instance, seizing evidence while the accused is being held or while conducting a search teeters on the unconstitutional, and can render the evidence inadmissible in court.
This question frequently comes up and since this is the ultimate guide to cannabis attorneys we figured we’d address it. Just like any other profession, a cannabis lawyer needs to have a license to practice. In order to do that, one must first complete their undergraduate studies at an accredited university, secure a law degree from a reputable institution, and pass the bar exam within the state they intend to practice law or operate a law firm. To specialize in the cannabis industry, the lawyer must devote time towards understanding the laws and regulations tied to it. The important takeaway for all who are investigating whether to start speaking with a cannabis attorney is that while all legal cannabis services provided require these guidelines, cannabis attorneys can vary in actual experience, ability, and resources to be the right fit for your business.
Simply put, a cannabis attorney specializes in all things legal, with regard to starting and operating a cannabis business. A cannabis lawyer focuses on marijuana, hemp, CBD or cannabidiol, or any other legal cannabis industry.
A cannabis lawyer will work with you in every step of your cannabis business journey: obtaining a license and a permit, acquiring real property, zoning, support strategies with the community, corporate team building and management, forming the business structure, legal compliance, and even the eventual business sale (and your exit).
Here are the crucial roles that a cannabis lawyer will play throughout the course of your business path, from planning your business and applying for a license to your business succession or exit plans.
Stage 0: Pre-Startup (6-24 months out from licensure)
> Business Entity Formation and Planning
A cannabis attorney will help you with mapping out your strategy and laying out the legal foundation of your cannabis business. Usually if they are experienced in the industry they will be well connected to a network of experts in many important fields that you must at some point engage with on your cannabis business journey. This can include business plan writers, designers, accountants, investors, general contractors, consultants, and more to address potential challenges regarding all stages that you will go through.
> Investments & Fund-Raising
Another crucial step that the cannabis lawyer plays a role in is helping with contracts and agreements when it comes to investments and fund-raising. More experienced cannabis attorneys are typically networked in with other cannabis-focused professionals and might be able to assist you in securing capital and operating investments that can best help you get your business up and running. The attorney will advise you regarding the right investors and investments, forming financial strategies and agreements that are effective in the cannabis market and ensuring the longevity of your business.
> Cannabis Licensing and Permitting Applications
It’s a hard reality in most cases that not everyone who applies for cannabis licenses and permits can get approval. In addition, many states in which cannabis is legal only grant a limited number of licenses. Without the help of a cannabis lawyer, all the resources and effort you devote towards these important requirements can just as easily go down the drain. Per our observation, most cannabis licensing opportunities are followed by a period of what could be years before any new licenses are granted again. The right attorney can give you an edge over your competition, regardless of which state you’re in.
Stage 1: Licensed
> Real Estate Evaluation
Your real estate agreement plays a key role in your long-term business success, depending on the type of cannabis-related business you plan to get into. More often than not, however, state laws require that you, as the owner, should have control of the real property upon which your marijuana grow, dispensary, or other related business will be established. Your cannabis attorney will help you sort out the papers and be an experienced eye looking through your real estate agreements in this endeavor.
> Permits / Zoning / Compliance
Likewise, zoning and compliance also fall within the realm of expertise of a cannabis attorney. Legal compliance, as guaranteed by the right cannabis lawyer, will spare you from unexpected regulatory expenses, potential violations, and the possibility of business insolvency due to non-compliance.
Stage 2: Opening Doors
> Contract Drafting and Vendor Negotiation
Next comes negotiating and setting contracts with vendors. To effectively do so requires a multi-faceted perspective, as many business, legal, and consumer-related factors will come into play. Regardless of the size of your operations, a cannabis lawyer will help you make sure your relationship with your vendors will bring long-term benefits to you.
> On-Going Legal Challenges and Disputes
Expect the road towards a successful cannabis business to have occasional legal bumps every now and then. The key is to keep your dispute-related expenses to a minimum, or even nip them in the bud before they become problems in the first place. A competent, experienced cannabis lawyer has the foresight to quickly identify these issues, and can help you prepare for them in advance (or avoid them completely).
Stage 3: Selling the Business, Mergers & Acquisitions
If you’re getting into the cannabis business with the end goal of eventually selling your business, you absolutely need to form that strategy with a cannabis lawyer. In the same way, plotting your business development and expansion with a cannabis attorney will help you guarantee legal compliance every step of the way, while still maximizing your profit and growth.
The quick answer: It varies, and it usually depends on the kinds of services they will provide and the firm they’re working with.
A cannabis lawyer from a smaller firm will likely cost less than an attorney from a bigger corporate firm. However, while it may be tempting to cut corners in this area by going for the cheapest possible option, that is absolutely not how you should decide on this matter. Take time to look carefully at who you’ll be working with, and gauge the value of your investment in your attorney. Will you get the most out of your dollar? Is your attorney competent, experienced, and well-versed in the cannabis laws of your state?
As established early on in this guide, the very beginning of your journey in building a cannabis business should involve a cannabis attorney. It doesn’t matter whether you already need an attorney’s services or not; this will keep an open line of communication to hear professional feedback from someone who can advise you on risks, potential blind spots, and practices that will help you succeed with your business goals.
As the Internet is full of cannabis lawyers, it can be overwhelming to make your decision based simply on your search results. Check out the following directories, where you will be most likely to find a cannabis lawyer who can best work with you on your business.
Step 1 : Determine what your legal needs are.
Before you even start looking for an attorney, figure out exactly what you’ll need first in terms of legal expertise and assistance. Here are some guide questions to help you:
Step 2 : Obtain referrals from trusted, credible sources.
It helps to talk to someone you trust on legal matters, like a former or practicing lawyer whom you’ve known for a long time. If you already know the kind of assistance you need, your friend can help by pointing you in the right direction. You’ll have a much better chance of finding the right lawyer than if you do research on your own (although this is an option, of course).
Step 3 : Familiarize yourself with each attorney and their law firms.
Don’t just take your friend’s word for it, though. Do your due diligence and find out as much about the lawyer and their law firm as you can. Take note of the number of years the lawyer has been practicing, how long the firm has been operating, where the lawyer graduated, or anything significant during their entire legal career. Take a look at the website or social media accounts of the attorney or the firm to get a better feel of who they are and how likely your relationship will succeed. Most importantly, check the bar website of your state to confirm whether the lawyer really can practice law in your state.
Step 4 : Schedule a consultation with your potential lawyer.
Reading about your possible lawyer can only get you so far. Schedule an initial consultation, preferably face to face, so that you can have a more in-depth discussion about what you need. Make sure, though, that you won’t get charged by the lawyer for this initial consultation! Additionally, make sure to meet at least three lawyers before you decide. Don’t just pin your hopes or settle for the first one you talk to.
Step 5 : Establish the payment structure early on.
In your meetings with possible cannabis lawyers, make sure to talk about fees and payment, especially if it seems like there’s potential for you to have a good working relationship. Clarify the fee structure (monthly, per transaction, and so on) with the lawyer, so that you can determine if your company can work within it and vice versa. It also helps to obtain bids for legal services, though secretarial time and other overhead expenses should already be included in the lawyer’s quoted hourly rate.
Step 6 : Weigh your options carefully.
Ultimately, the decision rests with you. Avoid lawyers who display red flags (e.g. they seem to be too busy, they take too long to process requirements, they seem to prioritize costly litigation over finding cost-efficient resolutions, etc.). After you speak to each of them, write down the pros and cons of each lawyer, depending on how they interacted with you and the behaviors they displayed during your meetings. Include other factors such as experience and cost as well, and you’ll be able to come up with the best decision in no time.
A final reminder: The success of your relationship with your cannabis lawyer also depends on your behavior as a client. Be open to sharing all important information with your lawyer, set clear rules and expectations regarding what you need and can expect from each other, and make sure to listen to what they say.
Building on almost 20 years in litigation, Justin’s practice specializes in regulated cannabis organizations consulting, formation, permitting, investment, expansion, and related ancillary legal services. Focusing on Cannabis law since 2016, Moriconi Flowers has successfully permitted applicants multi-state and on the Federal level. He is also co-owner of the first cannabis dispensary in Pennsylvania. Justin continues to return results in the face of adversity and against large firms for clients in all aspects of business and litigation. Justin and co-founder of Moriconi Flowers, Ted Flowers, regularly lecture on various topics on a local and national level in the commercial cannabis, security, insurance, and litigation space.
A 1997 graduate of Temple Law School, Ted’s experience in liquor licensing matters, representing hotels, bars, restaurants, distillers, and distributors through all stages of the licensing and regulatory process, made a natural transition to cannabis law practice in 2016. Focusing on Cannabis law since 2016, Moriconi Flowers has successfully permitted applicants multi-state and on the Federal level. He is also co-owner of the first cannabis dispensary in Pennsylvania. Ted and co-founder of Moriconi Flowers, Justin Moriconi, regularly lecture on various topics on a local and national level in the commercial cannabis, security, insurance, and litigation space.
40 West Evergreen Avenue, Suite 104
Philadelphia, PA 19118