Legal Insights

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

Startup founders often become swept up in the day-to-day on early product development and business development or other matters and may forget to pay adequate attention to initial company ownership and equity rights matters. It is nonetheless essential to document all equity issuances intended in real time, including documenting founders’ capitalization as soon as possible after entity formation.   A

There are many considerations that come into play with financing early stage businesses, including how to budget appropriately for the business to be successful and how to structure capital raises, among other concerns. Budgeting With Risks In Mind Early stage companies – whether in the cannabis space or otherwise – often need more frequent infusions of capital than established businesses

It’s no mystery that startups struggle to manage their budgets and company financials.  More often than not, early-stage companies have inaccurate financial forecasts; the fiscal runway isn’t long enough, and the budget falls short. The task of creating a projection at the start of a company is generally difficult for many reasons, including that the estimates used in the forecast

One of the perennial questions faced by taxpayers when forming a business is whether to incorporate it as a C Corporation or to form a flow-through entity such as an LLC, partnership, or S corporation. For most small business owners, the choice thus far has been a simple one: unless non-tax related considerations weighed heavily in favor of a C

People from the cannabis field will often ask me how practicing “cannabis law” compares to my time spent practicing “FDA” (a/k/a life science) law at two publicly traded biotechs and a global medical device manufacturer. Given the many similarities between the two industries, cannabis and life science, but with one industry firmly established on the national scene and the other

Due diligence plays an important role in many types of cannabis industry transactions.  Due diligence involves a third-party conducting a thorough review of certain documents and records related to a business.  As a best practice, cannabis companies should remain aware of the various times when third parties may conduct due diligence with respect to their business. Often investors participating in

Starting a company is intimidating for most, if not all, early stage entrepreneurs. Often founders are product-focused and put legal concerns on the back burner in hopes that they can get up and running before incurring legal expenses.  Unfortunately, in the cannabis space especially, it’s important to have legal advice at the outset of the business to avoid later excess