How Cannabis Law Firms Are Navigating The Rough Terrain
Cannabis Law Firms
As the legalization of cannabis continues to sweep the nation, more and more opportunities are opening up for business growth. And just like all businesses, the cannabis industry has a need for lawyers. Cannabis law is a unique market, however, with many obstacles to conquer. So how are cannabis law firms navigating this rough terrain?
Here are five issues cannabis law firms deal with and solutions to overcome them:
Vague Laws and Regulations
Every state has varying marijuana laws and regulations. And unfortunately, these laws and regulations are often loose or vague. This causes many challenges for cannabis law firms.
It is important cannabis law firms are aware of and fully understand ambiguous rules because depending on how clear a state’s marijuana laws are, could determine if the firm wants to pursue cannabis law in that state.
Many cannabis law firms might deny representing cannabis businesses if the business is located in a state with murky laws and regulations.
All business regardless of the industry must deal with a broad range of financial issues, whether that be obtaining bank accounts, asking banks for loans, trying to obtain grants, meeting with investors and trying to receive other types of institutional financing.
Due to federal banking laws, cannabis businesses have difficulty obtaining financing. Cannabis lawyers must be aware of this and understand that their clients are facing financial conflicts that are most likely very different than the financial conflicts businesses in other industries are facing.
Cannabis law firms must also pay close attention to the possible difficulties that can arise surrounding tax calculations and implications associated with cannabis businesses.
Frequent Regulation Changes
Cannabis law firms are always faced with numerous state regulation changes. State agencies governing marijuana businesses are frequently amending rules and regulations.
This causes a lot of work for cannabis lawyers because it’s crucial they are up-to-speed with each change, as these regulations are essential to keeping their client compliant and ultimately in business.
As the cannabis industry continues to transition from an underground culture to a legitimate industry, there has been a significant shift in who receives the majority of the profits.
Before legalization, profits were easy to split, as there were most likely only one or two parties involved. In today’s industry, however, there are many parties involved—the grower, the business owner, the store employees, the investors, etc. And all of these parties are expecting a piece of the pie.
To combat this, cannabis law firms must be prepared for litigation, as the parties often disagree on how much money they believe they deserve.
The marijuana industry is very new, and many cannabis business owners have no prior experience running or owning a business. Cannabis law firms must be aware that their clients will often rely on them for help in all areas of the business—not just legal matters. Cannabis law firms should be willing to support their clients in all aspects, as this will help the business succeed in this highly competitive industry.