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Cannabis has been an ever-evolving industry since the “legalization wave” kicked off. Although illegal at the federal level, the lines are blurred among the states. Consequently, the cannabis industry remains dotted with legal liability risks for unsuspecting cannabis users or business owners.
Today, it has been legalized for recreational use in DC, the US territory of Guam, and 18 states. Cannabis has also been legalized for medical use in 38 states. However, it still hasn’t been decriminalized in federal law and in 13 states of the federation. Even in the states where it has been decriminalized, legalization comes with a broad range of overbearing regulations with significantly varying levels of prohibition.
Cannabis law has emerged as a niche area of legal practice, and cannabis lawyers are helping individuals and corporate bodies navigate the country’s labyrinthine federal & state cannabis laws while avoiding legal liability as they operate. All of these make it more difficult for cannabis-based businesses and the average cannabis user to avoid problems with the law. As you stake your share in this $25 billion industry, a cannabis lawyer can help you navigate the legal minefield.
What Is a Cannabis Lawyer?
Cannabis lawyers, also known as hemp attorneys or marijuana lawyers, help their clients stay compliant within the legal cannabis industry on matters including use of or dealing in hemp, marijuana, and cannabidiol (CBD). The bulk of the portfolio of cannabis lawyers for business owners includes helping clients advance through complex startup procedures, obtain and renew licenses, meet compliance requirements, and stay on track with the ever-shifting regulations. Cannabis regulations are generally unstable across states. The best cannabis lawyer near you must keep updated and keep clients informed about the appropriate response to certain regulatory requirements.
What Does a Cannabis Attorney Do?
The cannabis industry has grown in leaps and bounds in the few years since it was first legalized in California in 1996. Doing $25 billion in legal sales in 2021 alone, the industry is projected to grow to as high as $100 billion over the next decade. As is expected for a fast-growing, ever-changing industry, there will be a huge demand for legal services. The following are a few ways cannabis attorneys can help their clients stay compliant amidst the myriad regulations.
Business incorporation and licensing
Just as it is in all other industries, to set up a cannabis company, entrepreneurs need to follow specific legal guidelines for corporate formation. With the cannabis industry remaining highly regulated, some of the stipulations in the guidelines may be unfamiliar. Cannabis lawyers help by providing accurate interpretations and filing the necessary documents while satisfying all requirements for incorporation.
If you’re setting the business up as a partnership, cannabis lawyers near you can help draw up partnership agreements or cover everything you need for corporate structuring. As poorly drafted or executed contracts can leave businesses at risk of commercial litigation, cannabis attorneys help draft/negotiate clear terms when entering into commercial agreements with other business entities.
Also, to operate a cannabis company, a business owner needs special licenses. First, a corporate entity needs to obtain a business license from the state or county authorities. Then, as a cannabis company, you may need licenses for different activities along the cannabis value chain. Cannabis attorneys near you can advise you on what licenses you need, the requirements for obtaining them, how and when to file them, and other licensing issues that may arise.
Protecting intellectual property
As an emerging industry, the cannabis trade is packed with innovation. Cannabis companies aren’t just harvesting and selling marijuana and hemp. They also invest in research and development (R&D) departments to identify active agents, develop new extraction methods, and create new products.
Such activities require that businesses commit huge intellectual, human, and financial resources, which are protected under federal and state intellectual property laws. If you need to file patents or sue another company for violating your intellectual property rights, consider consulting with cannabis lawyers near you.
Real estate and sundry commercial leases
It is normal for businesses to lease real estate and equipment. However, for cannabis companies, there are regulations for where they can be located. To illustrate, in Los Angeles, retail marijuana businesses must be located at least 700 feet away from schools, rehab centers, public parks, public libraries, and daycare centers. With help from a lawyer for cannabis near you, you can identify the best location for your business. Also, lessor-lessee relations can potentially brew legal disputes or liability issues, which companies may be able to avoid with the help of cannabis attorneys.
Tax and compliance
Every medium to large business in the United States has staff dedicated to navigating tax and compliance issues, and the cannabis industry is not exempt. There are usually taxes at the federal, state, and county levels. Accordingly, cannabis attorneys can help businesses reduce tax liability and properly file taxes and can provide representation in the event of litigation. Regulations aren’t only crucial at the point of incorporation. Companies must abide by the rules at all stages of business growth. Cannabis attorneys can help keep owners abreast of the latest regulations while helping to maintain compliance.
Legal representation
With cannabis laws differing so widely and shifting so often, the risk of legal liability can be high. Cannabis lawyers near you can provide legal representation in your defense. The capacity for legal representation applies to both companies that have run into license or tax issues and individuals facing marijuana-related criminal charges.
Labor relations
As you build your business in an emerging market like the cannabis industry, there will be a need for employment contracts, workplace regulations, and dispute resolution. Cannabis attorneys are experienced business attorneys who are ready to help with these and other labor relations.
When to Hire a Cannabis Lawyer
At what point does a business owner need to hire a cannabis lawyer instead of other lawyers? Consider hiring a lawyer for cannabis near you when:
- You are building or are looking to build the corporate structure for a cannabis business;
- You are obtaining the licenses to operate a cannabis business;
- Your cannabis company runs into legal issues; or
- You have been arrested for cannabis-related offenses (e.g., illegal possession of marijuana).
How Do I Choose a Cannabis Attorney?
Choosing a cannabis attorney near you can be simple if you consider the following points.
Your Legal Needs
The first thing to consider when choosing a cannabis attorney is your unique needs. Are you incorporating a business, or do you need a tax issue resolved? Your specific legal needs will determine what kind of attorney you require.
Seek Referrals
It’s good practice to seek referrals from family, friends, and acquaintances who’ve required the services of cannabis lawyers near you before. This way, you can gain first-hand knowledge about the lawyer’s suitability, response rate, and success rate. You can also search for the best cannabis lawyers near you online and read their client reviews.
Weigh Your Options
When you’ve collected your options, the next step is to compare them to determine which attorney is best for you. You will want to determine how long each attorney has been practicing and his or her track record. You will also want to make sure the lawyer has experience in your specific legal issue.
Interview
When you have narrowed your options down to compare, the next step is to consult with each attorney to see whether he or she is the right fit for you. Most lawyers offer a free first-time consultation, so interviewing a few to find the right one is usually a good idea. Besides saving you money, the consultation provides the lawyer with the relevant details needed to give informed legal advice.
Establish a relationship
When you’ve settled on a lawyer for cannabis near you, discuss fee structures and payment plans—usually a retainer agreement—and formally establish a lawyer-client relationship. Besides the extra pair of eyes they can give the business owner, lawyers can help spot legal liabilities, such as legal documentation on a re-branded cannabis website that could include minors as part of the customer base, and help the business owner steer clear from those potential problems.
How Much Does the Average Cannabis Lawyer Cost?
It’s difficult to determine an average cost for the services of cannabis lawyers. In a very diverse field like the cannabis industry, finding one lawyer who can do it all is improbable. Cannabis-related matters are typically handled by law firms that delegate work to individual lawyers. While bigger firms may charge significant legal fees, lawyers from smaller firms are usually more affordable. Lawyers from bigger firms also have a comparative advantage, as they are often more responsive. Whichever cannabis lawyer you hire, prioritize competence ahead of costs when looking for a cannabis lawyer near you.
Do Cannabis Attorneys Usually Charge for Consultations?
Many attorneys do not charge for first-time consultations, but many others charge as much as $600 in fees for in-person consultations. Online consultations may cost significantly less.
Frequently Asked Questions
What are the legal risks associated with starting a cannabis company?
Despite a flurry of legalizations and increasing usage among Americans, cannabis is still a hot-button issue, both politically and legally. The cannabis legal landscape is very murky and fraught with risks that could potentially threaten business continuity or spell the end of a company, which is why you can benefit from hiring a lawyer for cannabis near you.
Can I hire a cannabis lawyer from out of state?
Even within states that have legalized the recreational use of marijuana, cannabis laws are ever-changing and can differ. Hence, an in-state lawyer will be a better choice than one from out of state. In-state lawyers have professional networks and proximity to regulatory developments within your state that help them watch for changes in local cannabis regulations—and update you on how to navigate them.
What is the difference between hemp and marijuana legally?
There’s a bit of inconsistency across state and federal laws regarding the difference between marijuana and hemp. However, as a rule of thumb, hemp is known to contain less than 0.3 percent of THC. Drawing from this, it’s safe to conclude that anything above that THC quantity should be deemed marijuana, according to federal law. State laws require a complex licensing procedure that can be simplified with the professional help of a competent cannabis attorney.