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How to Dissolve a Cannabis Entity

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The cannabis industry is in dire straits, perhaps even in a recession. Cannabis businesses cannot seek standard bankruptcy protections and are looking for creative ways to deal with the distressed market. As companies look to shake off unproductive assets, our cannabis group has fielded tons of inquiries about how to deal with depressions in the industry – so much so that we’ll be doing a free webinar on these issues next Tuesday, February 28.

One of the more common inquiries we’ve gotten concerns how to dissolve cannabis entities and what the effects of dissolution would be. So today,  I’ll look at some of the high-level issues related to winding up and dissolving a cannabis entity, and post-dissolution consequences.

The first issue may seem obvious, but it’s surprising how often it gets overlooked: simply “abandoning” a cannabis entity is not a great idea. Instead, they should actually go through the dissolution process. A business that is simply “abandoned” (i.e., the owners don’t go through the formal dissolution process and just do nothing with the business) may still accrue outstanding taxes and other liabilities. It may be administratively dissolved (depending on the state) or even fined. There are a lot of unknowns

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Harris | Bricken

Happy Holidays from The Canna Law Blog

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Wishing all of our readers, along with friends and families, the very best this holiday season.

Whether you celebrate Hanukkah, Christmas, Kwanzaa, Winter Solstice, Festivus, or something else, we hope you can kick back and enjoy this wonderful time of the year.

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How Important is the SAFE Banking Act, Anyway?

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I’m pretty sure that more ink has been spilled on the Secure and Fair Enforcement Act (“SAFE Banking”), than any other proposed cannabis law. It just won’t pass and it just won’t die. Specifically, SAFE Banking was introduced in 2017 and it passed the House seven times (seven times!) with bipartisan support since 2019. The public likes it too: here’s a November 2022 Data for Progress poll revealing that “By a +65-point margin, voters support ensuring that banks do not discriminate against legitimate marijuana-related businesses.” This bill should pass, right?

It’s getting closer. SAFE Banking will finally go to mark-up this week in the Senate Banking Committee. That Committee is preparing to vote before October 1, although what they’ll be voting on at this point isn’t entirely clear. (For some chatter on that, check out this Marijuana Moment piece from last Friday.) But let’s assume that SAFE Banking, after mark-up, holds onto its key tenets. It would prevent federal banking regulators from:

prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business); terminating or

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Employment Law Issues for Struggling Businesses

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We all know the Oregon cannabis industry is struggling. We write often about the causes on a macro level, possible solutions, and what we see as business litigators. We haven’t written much about one of the basic areas of employment law that applies to Oregon marijuana businesses: workers rights to wages and employer responsibilities. As marijuana businesses shutter, employees and employers should pay careful attention to Oregon’s wage laws. This post addresses basic things marijuana employees and employers ought to know about paying wages when employment ends.

No formal contract is required to create an employment relationship

There is no requirement under Oregon law for a formal contract to establish an employment relationship. As long as the ordinary elements of contract formation are present an employment relationship exists. Usually this means that the person for whom the service is performed (employer) agrees to have another perform the service (employee) for a certain remuneration (wages). And where the putative employer has a right of control over the services provided by the putative employee.  Typically this boils down to compensation and right-of-control.

When these elements are present an employer’s promises of wages and benefits are binding. On the flip side, the general

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