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The Best Advice For Starting A Cannabis Business

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1 year ago

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Consumers continue to drive an ever expanding marijuana industry and new opportunities appear at every turn.  While the market is involving, there is still opportunities to make money and start a successful business.  Public opinion is pro-legalization and it is just a matter of time before the government reschedules driving more growth. If you are considering it, here is the best advice for starting a cannabis business.

Lonnie Rosenwald is a partner in Zuber Lawler’s cannabis practice group and shares some valuable insight into starting a business. In the rapidly growing cannabis industry, small business owners face a myriad of challenges, ranging from the typical complexities of business structures and investment to navigating the particular nuances of cannabis contracts, banking, and real estate. Establishing a successful cannabis business requires careful consideration of these areas of law to ensure compliance, mitigate risks, and foster growth. Here’s a brief guide for small cannabis business owners on five key areas for your focus: legal entities, investments, contracts, banking, and real estate. 

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  1. Legal Entities

Choosing the right legal entity is crucial for cannabis businesses. Each state’s cannabis program differs from all other states, and the legal entity you need may be required by your state’s program. Additionally, each structure has advantages and disadvantages. Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations all offer distinct benefits. For example, LLCs are popular structures for new cannabis businesses due to the liability protection they provide their owners (called “members”) while maintaining flexibility in management and favorable tax treatment. Some sophisticated investors prefer corporations. A sole proprietorship is not an entity, but it is simpler than the other business structures in that you, and only you, control the business, but you do not have liability protection.  Partnerships are just that:  a number of partners work or invest together in the business. A joint venture is a type of partnership whereby the partners are committed to a common goal; general partners may not be protected from liability; limited partners typically are.  Corporations have limited liability for the shareholders and employees. A decision on your business entity structure should be made with advice from your attorneys and tax professionals familiar with cannabis other applicable laws and regulations. Your business may also be required to comply with the U.S. Corporate Transparency Act with respect to reporting to the Financial Crimes Enforcement Network (FinCEN) certain information regarding the beneficial ownership of your entity (effective as of January 1, 2024).   Whether you are required to report should be a topic of conversation with your attorney.  

RELATED: Guess What Is Gumming Up The Marijuana World

  1. Investments:

Securing funding by private capital raises, financial institution lending and/or friends and family commitments is often a crucial step in the growth journey of a small cannabis business because of the significant costs of real estate, equipment, and employees. Investors, whether individuals or venture capital firms, are attracted to businesses with a solid legal foundation, clear growth strategies, and compliance with laws and industry regulations. Business owners should be prepared to present potential investors and lenders comprehensive business plans, showcasing not only the financial viability of the venture, but also a deep understanding of the legal and regulatory landscape. The U.S. and state securities laws typically apply to offerings of securities in cannabis entities notwithstanding that your state may have a cannabis program and that cannabis is illegal at the federal level.  These laws are particularly complex, so before issuing shares or member or partner interests in your cannabis business, please seek legal advice from securities-competent counsel.   Businesses should have an attorney review all investor materials to avoid problems down the road. 

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  1. Contracts:

Clear and comprehensive contracts are the foundation of any successful business. In the cannabis industry, contracts play a vital role in clarifying and documenting relationships with suppliers, distributors, employees, investors, lenders, and partners. Ensuring contracts comply with state cannabis regulations (as well as other applicable laws and regulations) is critical to avoiding the potential that the contract is unenforceable or worse, illegal. We frequently see clients desiring to buy or sell a cannabis business, obtain loans or investments, and those entering into complex contracts regarding real estate or equipment leases, cultivation, manufacturing, transport, marketing services agreements, and partnership agreements.  Many of these contracts are lengthy, and of course, use legalese that you may not understand.  Some include complex rights and responsibilities, as well as how the parties will calculate various fees and expenses relating to the contract. Seeking legal advice during the contract drafting and negotiation stages is a prudent step. 

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  1. Banking:

Accessing banking services remains a significant challenge for many cannabis businesses as the sale and consumption of cannabis remains illegal under federal law, and most financial institutions (banks) are regulated by the U.S. and are required to follow certain regulations applicable to their operations. While some banks are cannabis-friendly, business owners must establish relationships with banks that have experience in the cannabis industry and that understand and comply with state-specific cannabis regulations. It is imperative to maintain meticulous financial records. Exploring alternative financial service providers, such as credit unions or specialized cannabis banking services, can help businesses navigate the financial landscape. Financial institutions such as banks will want to see what collateral your business has, such as ownership of real estate (a lease typically won’t work here), to secure your promises to repay a loan. Most banks will not lend to plant-touching cannabis businesses (even those with real estate assets), nor will they even process your deposits, debits or credits.  Ask cannabis leaders in your state for cannabis bank referrals; caution, most banks doing business with cannabis businesses don’t publicize that fact!   

RELATED: Science Says Medical Marijuana Improves Quality Of Life

  1. Real Estate:

Cannabis businesses must carefully consider real estate issues, including zoning, building, health and safety and other applicable laws and regulations, lease and lending agreements, and compliance with state, county, and municipal property laws, as well as owners associations’ regulations. Zoning regulations can significantly impact the location of cannabis operations, making it crucial to choose properties where cannabis activities are permitted under local ordinances. Often, the cannabis business’ compliance with local zoning codes requires a lengthy and time-consuming review process with a substantial amount of documents, plans, specifications and other costly information, as well as public hearings and numerous conferences with planning staff. Leases should address cannabis-related activities explicitly by including cannabis use (for cultivation, extraction, retail, etc.) in the permitted use provision, permitting limited access to the facility by landlord (and its lenders), allowing early termination in the event of a change in cannabis law prohibiting a cannabis use, and the like, also ensuring alignment with both state and local regulations. Engaging with real estate professionals and attorneys familiar with the intricacies of the cannabis industry can streamline the process of finding and using suitable properties. 

RELATED: California or New York, Which Has The Biggest Marijuana Mess

Small cannabis business owners must be thoughtful and proactive in choosing suitable legal entities, negotiating enforceable contracts, accessing banking and investment and acquiring real estate. Navigating the complex regulatory landscape requires collaboration with legal and financial professionals who specialize in the cannabis industry. By establishing a solid foundation in these five key areas, small cannabis businesses can position themselves for sustainable growth and success in this dynamic and challenging industry. 

Lonnie Rosenwald is a partner in Zuber Lawler’s cannabis practice group. Ms. Rosenwald  is located in Seattle, WA. These comments are general and not specific to your particular business or business situation; these comments are not intended to be legal advice, nor is Ms. Rosenwald or her firm representing you.  We encourage you to seek qualified legal counsel to represent you or your business especially with respect to a cannabis (touching or not) business.  



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Can CBD Provide Some Foot Pain Relief

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1 week ago

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February 13, 2025

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It hobbles millions – but CBD could be step in the right direction for foot pain.

Roughly 75% of people suffer some type of foot pain at some point. But can CBD provide some foot pain relief? Foot pain can be debilitating, affecting daily activities and overall quality of life. Conditions like gout, plantar fasciitis, neuroma, neuropathy, and metatarsalgia are common causes of foot discomfort. While traditional treatments often come with side effects, CBD oil has emerged as a promising alternative for managing foot pain. Here’s why CBD is gaining attention for its potential benefits in alleviating foot-related issues.

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CBD, or cannabidiol, is a non-psychoactive compound found in cannabis plants. Unlike THC, CBD does not produce intoxicating effects, making it a safe option for those seeking pain relief without altering their mental state. CBD interacts with the body’s endocannabinoid system (ECS), which plays a crucial role in regulating pain, inflammation, and mood.
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CBD has been shown to reduce inflammation, a key factor in many foot pain conditions. By minimizing swelling and redness, CBD can help alleviate discomfort associated with conditions like gout and plantar fasciitis.

CBD’s ability to modulate pain perception makes it effective for managing chronic pain. It can increase levels of anandamide, a compound associated with pain regulation, potentially reducing pain perception.

For conditions like neuropathy, where nerve damage leads to pain, CBD’s neuroprotective qualities can help mitigate symptoms. It may reduce neuropathic pain by interacting with receptors in the nervous system.

CBD products come in various forms, including topical creams, gels, and oils, which can be applied directly to the affected area. This localized application avoids systemic side effects and ensures targeted relief.

While more research is needed to fully understand CBD’s effects on chronic pain, existing studies suggest it is generally safe and well-tolerated. Common side effects are mild and include fatigue, decreased appetite, and dry mouth. The FDA has not approved CBD for pain management, but it is approved for certain epilepsy conditions, indicating its potential therapeutic benefits. As research continues to uncover the full potential of CBD, it may become a valuable tool in the arsenal against foot pain, providing comfort and improving quality of life for many.



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5 Ideas To Have A Fun Single’s Valentine’s Day

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1 week ago

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February 12, 2025

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Valentine’s Day is considered a big night for couples – but if you are single, it can be tough…here are some ways to make it fun

It is day of love, candy, silliness and more….but for some, it is a tough day emotionally. It is one of the busiest restaurant days and flowers and candy abound everywhere you look. But what if you are single or taking a break for the big night.  Just because you are single, doesn’t mean you have to hide, rather it gives the chance to do something special for yourself.  Here are 5 ideas on having a fun single’s Valentine’s Day.

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Gather your closest and/or your most fun friends and celebrate with a Guy/Galentine’s Day party. This can be a fun way to spend time with people you love and appreciate. You can play games, share snacks, and enjoy each other’s company without the pressure of romantic expectations. It’s a great way to remind yourself that you’re never truly alone on Valentine’s Day.

Treat yourself to a day of pampering. Book a spa appointment or create your own DIY spa day at home with face masks, bubble baths, and your favorite music. Self-care is essential for mental and physical well-being, and Valentine’s Day is the perfect excuse to prioritize it. Whether it’s a relaxing bath or a rejuvenating facial, make sure you feel loved and cared for by yourself.

Chill out with cannabis and let your body relax.  Watch a movie or lose yourself in music. marijuana taps into our minds in all sorts of ways, many of which seem to positively influence how we perceive things, including music. It also accesses a special neurotransmitter system, the endocannabinoid system, which regulates appetite, pain, mood and memory. The way the plant activates this system explains a lot of the unique effects. The THC in marijuana can increase dopamine release in the brain’s reward centers, leading to feelings of pleasure and euphoria.

Indulge in hobbies or interests. It can a be a chance to spend time iwth a new or existing activity you love, but might night share with others. Whether it’s gaming, cooking, or learning a new language, stepping out of your comfort zone can be incredibly rewarding. You might discover a new passion or talent, and it’s a great way to keep your day exciting and productive

Sometimes, the best way to celebrate Valentine’s Day is by taking a solo trip or exploring new places in your city. Whether it’s hiking a scenic trail, visiting a local museum, or trying a new restaurant, getting out and experiencing new things can be incredibly liberating. It’s a chance to focus on yourself and enjoy and discover new things.



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The Best Marijuana Strains For Valentine’s Day

Published

2 weeks ago

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February 12, 2025

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It is the day for lovers and/or friends…make it a little extra special with these love strains.

Friday is Valentine’s Day, one of the most fraught emotional days of the year. It is one of hte business days of hte year for restaurants, second only to Mother’s Day.  It is also given rise for singles to celebrate including the new trends of Galentine’s Day.

Candy, chocolate, and sweets are a top choice for Valentine’s Day gifts. In 2018, 63% of consumers bought candy for Valentine’s Day, but this year think outside the heart shaped box.  Here are the best marijuana strains for Valentine’s Day. Whether you’re looking to enhance intimacy, boost creativity, or simply relax with your partner, there are numerous marijuana strains which can help set the mood. 

RELATED: Couples Using Cannabis Can Increase Intimacy

When selecting a strain for Valentine’s Day, consider the desired effects and your partner’s preferences. Sativa-dominant strains like Lemonatti and Rainbow can enhance energy and creativity, while indica-leaning strains like Pineapple God and Sugar Black Rose offer relaxation. Balanced hybrids like Cereal Milk and Red Velvet provide a mix of both, making them versatile choices for any romantic evening.

Love Potion

This Sativa-dominant strain is known for its arousing effects. Love Potion enhances focus and energizes the mind, making it perfect for foreplay and deep conversations.

Lemonatti

This sativa-dominant hybrid offers a sophisticated blend of uplifting and relaxing effects, with THC levels ranging from 21-28%. Its energizing properties make it ideal for a lively (wink wink) Valentine’s evening.

Alien Cookies

This hybrid strikes a balance between relaxation and euphoria, creating a cozy atmosphere while setting the mood for connection.

Rainbow

This Uplifting strain has bright and is full of flavor, Rainbow is great for couples seeking a lighthearted, adventurous Valentine’s Day experience.

Pineapple God

This Indica-leaning is perfect for a relaxing evening, offering a stunning visual display of sticky green, pink, and purple buds. If you are spending the evening alone, this can put you in a great mood.

RELATED: The Best Tips To Up Your Intimacy Game While High

Donny Burger

This Indica is ideal for winding down after a romantic evening, providing full-body relaxation effects perfect for cuddling.

Sugar Black Rose

This Indica offers a deeply relaxing experience with a sweet, fruity aroma, making it a beautiful gift for Valentine’s Day.

GG4 Sherbet FF

This energizing strain boosts energy and creativity, perfect for romantic moments and enhancing intimacy.

Cereal Milk

This balanced hybrid promotes creativity and sensory exploration, with a sweet, dessert-like flavor that pairs well with romantic treats….could be a big winner.

Create a cozy atmosphere with dim lighting and soft music and enjoy the cannabis alongside romantic treats like chocolates or desserts.  Avoid alcohol since combining marijuana and booze my not provide the right atmosphere.

 



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