A client lately asked me for a lawyer referral in a state exactly where we do not have an lawyer around the ground. It was for any real estate and marijuana license acquisition handle each of the usual complications: obtaining approval from state licensing authorities and regional authorities, having money into escrow from a lot of 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 type of deal where the client wanted boots on the ground, which makes sense. So, I gave our client the name of a neighborhood lawyer we know and respect. Unfortunately, that attorney just occurred to be representing the other side on the deal and so he was conflicted out. The client asked for a distinctive referral, and, based on what we saw around, we merely couldn’t come up with one we trusted to do additional than just undergo the motions on our client’s behalf. Get extra information about cannabis lawyer
Far also several lawyers with little to no business law experience are branding themselves as “cannabis lawyers” these days just simply because cannabis is a “hot” legal area. And really couple of of those so-called cannabis lawyers meet what we think about the minimum specifications to supply competent business counsel in the legal cannabis space. Listed here are a couple of items we believe everyone hiring a business lawyer for their marijuana operations needs to be seeking for:
Criminal vs. Corporate Viewpoint: There’s absolutely nothing stopping a criminal lawyer from studying a new set of expertise and transitioning to a predominantly corporate practice, but seasoned criminal lawyers have a tendency to possess a really distinctive point of view than commercial lawyers when it comes to corporate clientele, and particularly with regards to transactional work. In Washington and California, for instance, a number of attorneys with criminal backgrounds advised their customers not to spend state taxes since they didn’t want their clients “to incriminate themselves” by admitting to cannabis sales on tax forms. That guidance may perhaps make sense when your goal should be to maintain your client from confessing to federal crimes, however it led to a large variety of marijuana firms incurring enormous interest and penalties and also a number sooner or later had to shut down because of it. We nevertheless see the impact of this poor tips when we get a brand new client who failed to spend its taxes within a timely matter be precluded from securing a license either in its home state or in a different state. A great deal of what fantastic business lawyers do will be to add transparency to cannabis businesses which can be 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 wants a sales contract, I’ve many different sales documents I use to begin the transaction. That mentioned, I then heavily customize these documents for every single individual deal due to the fact each and every deal usually demands various terms and conditions. Too many times I’ve seen documents drafted by opposing counsel who did nothing a lot more than “find and replace” for the parties’ names on a key document and then ship it out for signature. People don’t hire really serious corporate attorneys to get that type of contract, they hire Legal Zoom. And, for marijuana businesses, that boilerplate contract is risky since nine occasions out of ten it’ll not accomplish the ambitions in the parties and it could set the parties up for imminent failure within the deal. People use actual corporate lawyers since they need to have a contractual connection specific to them and to their situation, which might be wildly complex given the continual changes to marijuana regulations. For those who get the feeling that your lawyer is just filling out boilerplate forms, you have a problem.
Scriveners: Equivalent to boilerplate contracts, clients need to also be on guard for “scriveners.” These are attorneys who just translate a client’s requests, bar none, into legalese. Although that may possibly look like what a client wants, the client is not finding the full benefit of actual counsel in that interaction. Your attorney must be asking you concerns and/or pushing back on you, letting you realize no matter whether your deal points appear fair or unfair, irrespective of whether they comply with regulations, what the liability will be to you for all those terms, and no matter whether the requested terms are normal or our of the ordinary course of business. Most importantly, your lawyer must have done a lot of deals like yours that she or he can tell you about the business and legal options you may have missed and about other related deals he or she has handled. Attorneys that practice inside the corporate space day in and day out possess a exclusive point of view that may add value in negotiating the deal. If your lawyer is just transcribing your every single wish without question or simply acquiescing to all of your demands, you should be worried.
So, do not just go through the motions with your attorney and think you’re protected inside 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 before it comes back to bite you and your business.