I recently spoke with a lawyer who was newer to representing cannabis clients. The lawyer asked me to describe the biggest legal mistakes I see for cannabis businesses. Over the years, our cannabis lawyers have seen cannabis businesses make just about every mistake in the book. Today though, I want to talk about what I think are some of the most common legal mistakes for cannabis businesses from a corporate governance and operational standpoint.
Legal mistake #1 – hiring a cannabis lawyer and ignoring their advice!
A lot of folks in the cannabis industry don’t quite understand the role of a cannabis lawyer. I wrote about the nature of that role in dealmaking here for what it’s worth. But these types of folks seem to think a lawyer’s job is to rubber stamp whatever they want to do. Maybe the goal is to have someone to blame if things go wrong, but who knows. Businesses looking for a legal rubber stamp will eventually get upset when it’s not forthcoming. And in many cases, those businesses may ignore what their lawyers said and move forward anyways. Not good!
If a lawyer says “don’t do X” or “if you do X then