Evolution To Recreational Cannabis: Maine finally launches its adult use program four years after voters approved recreational use, retail sales and taxation of marijuana in November of 2016. A legislative committee met to amend the Marijuana Legalization Act (“MLA”) passed by voters and after rewrites and two vetoes, An Act to Implement a Regulatory Structure for Adult Use Marijuana became
In today’s California cannabis-friendly environment, consumers long for social atmospheres to legally catch up with the obvious state of affairs that cannabis is a popular consumable for both medical and recreational reasons. Cannabis cafes have popped up in California and are proving popular in places like West Hollywood and San Francisco but are not yet permissible under local laws in
1. Reconsider Corporate Structure: Is the entity type right for your business? Are investors indicating different preference (e.g. a corporation instead of a limited liability company)? Consider changing things up this New Year, subject to compliance considerations and limitations around permits and licenses, to align with general preferences and limitations on liability for cannabis businesses. 2. Ensure Written Policies and
Managing all of the notifications required under applicable law to regulators for licensed cannabis companies can be challenging. Many companies aren’t aware of required timelines or events requiring notification in order to appropriately notify the applicable regulatory bodies governing their licenses. Keep in mind that any and all of the following events can trigger required notifications to regulators (this is
As we get ready to ring in the New Year, we know cannabis businesses would like to hear their cash registers ringing as well. California cannabis companies have struggled recently with over-valuations, over-promised performance forecasts and under-delivery on revenues and forecasts. Investors have struggled to fully comprehend why their investments have not panned out as expected in the emerging legal
Many cannabis companies are finding themselves strapped for cash and in need of emergency funding or interim financings between larger equity raises. Often these fast funds come in the form of loans from either existing investors or family and friends. These loans, more often than not, tend to take the form of a promissory note. Promissory notes are instruments that
Know Your Stuff. It’s crucial that you come across as competent, professional and knowledgeable. For sophisticated investors, knowledge about the business doesn’t mean only knowledge about the product and the brand; it’s likely to also encompass knowledge regarding the business plan and vision, the corporate structure and capitalization, as well as financials and forecasts. Be Succinct and Distinguishable. There’s a
Cannabis Company Valuation Challenges Valuing a company is a complex analysis. Layering on the regulatory and political uncertainty in the cannabis industry adds to the complexity for cannabis companies versus other industries. In Canada, having a public market to compare to can help give some idea perhaps of where the future of cannabis-related valuations in the U.S. may go, but
In a corporate context the Board of Directors (the “Board”) is the most important governing body for the corporation. The Board holds ultimate responsibility for the business and affairs of a company. Other than items also requiring the vote of the shareholders, the business and affairs of the corporation are managed, and all corporate powers are exercised by or under
Types of Financings for Cannabis Businesses Financings for cannabis businesses can take different forms. There are debt financings and equity financings. Debt Financings Debt financings often are documented in instruments such as promissory notes (whether simple loans with interest that accrue and mature, or loans convertible into equity on certain events or otherwise mature). Equity Financings Equity financings often are
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