Cannabis LLCs Need Operating Agreements

Cannabis businesses are usually limited liability companies (LLCs). There are a lot of reasons for this, starting with the fact that LLCs are more flexible than corporations, which have much more rigid rules. To take advantage of those flexibilities, and for a lot of other reasons, LLC owners (called members) need an operating agreement. Below, we’ll look at a few big reasons why cannabis LLCs need operating agreements.

Cannabis LLC operating agreements don’t need to cost a fortune!

Cannabis entrepreneurs don’t want to incur massive costs just to simply get a business on paper. The good news is that cannabis LLC operating agreements don’t need to be overly complicated. Unless a business has a very exotic setup or tons of classes of equity with different rights, they can often be pretty simple to put together. Any good cannabis attorney will have a number of templates to work from. And the simpler the LLC, the lower the cost.

The one big side note here is that like with any other contract, there are TONS of bad examples floating around online. We’ve seen tons of people try to pull LLCs from a search engine result and tweak them to fit their business.

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