- The cannabis industry is growing and has various sectors within it.
- It is an industry with complex legal processes and regulations; all requiring specific knowledge and handling.
- Law firms need to consider specializing to provide guidance and counsel to their clients in the various areas of the cannabis industry.
Complex startup procedures, licensing processes, compliance, and transactional requirements are just some of the areas that businesses in the cannabis industry need to navigate.
Unlike most other businesses, those specializing in marijuana products need the expertise of a lawyer, because, under federal laws, marijuana remains an illegal substance. Besides avoiding federal prosecution, businesses must also navigate complex state requirements that change rapidly.
In this article, we cover the seven reasons why law firms should consider specializing in the cannabis industry.
1. A new area of law specialty
Cannabis law is a relatively new practice, and the cannabis industry itself presents quite a few challenges and legal risks. In the past, legal teams and law firms mostly represented people prosecuted for the possession of cannabis. Now that it has been legalized for medicinal or recreational purposes across most states, attorneys need to focus on protecting individuals and business owners in several areas of the legal cannabis industry that includes CBD, hemp, marijuana, and their related industries.
2. Ability to offer various legal services in the industry
Not only do laws and regulations differ between states, but states also alter their laws as new legislation is passed. The approach each state adopts can vary from full legalization, medical authorization, or just decriminalization. Law firms should consider whether it is more important to specialize in the cannabis laws of their specific state or broaden their field to cover the laws and processes of several regions to best meet the needs of their clients.
3. High costs involved
Seeking licenses to establish a marijuana business can be quite costly. Most states have also placed limits on the establishment of cannabis businesses. Licenses are also often issued within a very narrow time frame. This means there is intense competition and high costs involved. The fees paid by applicants are often not returnable, and law firms need to ensure their clients meet all the regulatory and application requirements so the fees are not wasted.
4. Complex legal requirements
States also have complex requirements for proposed marijuana businesses. These include security and financial measures to safeguard the product is used for the purposes it is intended and does not end up in the black market; accidentally or intentionally. Owners and employees of these businesses also need to undergo intensive background checks before filing for license applications. It is difficult for individuals to known which requirements they need to meet and how to move forward. Specialized law firms understand the severeness of not meeting the requirements, and make sure the guidelines are followed closely so their clients can avoid fines, the revocation of their license, or facing criminal liability.
5. Understanding the processes
The cannabis industry is highly regulated. Not only are the startup procedures of a cannabis business complicated, but there are also specific transactional and compliance requirements. Licensing is very important in every area of the cannabis chain because it affects growers, extractors, manufacturing, dispensaries, and distribution.
Law firms must provide their clients with guidance and support for their marketing, labeling, packaging, finances, banking, and taxes. Thereafter, copyrights and trademarks are a vital area where law firms provide invaluable advice. Finally, new products and new strains of cannabis need to be approved before they can be distributed.
6. Expertise in the industry
Lawyers well versed in state and federal regulations in the hemp and cannabis industry can continue to offer their clients the best services and advice. As mentioned above, they also need to have a good background in protecting intellectual property and trade secrets. Other areas legal teams need expertise in are business law because they must assist their clients with corporate structuring, contracts, labor, and real estate.
7. Other qualifications
Besides offering all the above, law firms that specialize in the cannabis industry can offer their clients connections within the industry to help them achieve their business goals faster. Law firms specializing in cannabis laws can also offer more than guidance by been active in lobbying and legislative groups. This can help them keep their clients up-to-date with legal issues that may face in the future.
The field of cannabis law is set to continue changing for many years to come as state and federal lawmakers continue to grapple with various issues. It is a relatively new and exciting field in law that promises continued growth.