I Bet Your Cannabis Lawyer Is A Pretty Good Business Lawyer

Over the years, I've heard many variations on a certain comment I'd like to address. The comment is: "I thought of calling you for the project, but it wasn't a cannabis matter." It's a real gut shot, hearing those innocent words.

I fully understand why someone would think they need a non-cannabis attorney to handle a non-cannabis matter. The client thinks of their cannabis attorney as a specialist, while some other lawyer or law firm may specialize in "regular" business matters. In fact, it's probably my own fault clients think this way half the time. All we ever talk about is cannabis!

Chances are, however, that your cannabis lawyer is a pretty good business lawyer. Said another way, if you have a talented cannabis lawyer, you likely have a talented business lawyer. Below are a couple of reasons.

Cannabis law is business law

A significant majority of the "cannabis law" we have done at the firm is business law, with a controlled substance overlay. Just like lawyers who focus on healthcare, banking, tech, or other industries, a cannabis lawyer helps clients navigate compliance, contracts, funding, disagreements, etc.

Generally speaking, the underlying legal work done by a cannabis lawyer is the same as in other business sectors. What distinguishes cannabis law is not the type of legal skills required, but the distinct regulatory overlay. Cannabis law is dynamic and often complex, arising from federal illegality and all it entails. Attorneys who work with state-licensed cannabis businesses need to be sound business lawyers, but also flexible and creative.

Cannabis deals have range

Deal size in the cannabis space is — and always has been — especially highly variable. We have seen waves of small business activity over the years, alongside large-scale investment and a rash of U.S. companies uplisting on foreign exchanges (mostly in Canada). And everything in between.

I've had days where I worked on 100-page agreements with dozens of schedules and exhibits, involving complex indemnities and disclosures for widely-held companies, then turned to 10-page leases for mom-and-pop stores. The larger deals are more sophisticated and require heightened expertise, but the small deals are sometimes harder, due to budgetary constraints and clientele. A business lawyer who has spent enough time in the cannabis space will likely have range.

Cannabis law hasn't been around all that long

The best cannabis lawyers I know are business lawyers who started out doing something else. The first adult-use cannabis programs didn't roll out until 10 or so years ago. Most of us were doing other things before then. Business things! We were generally doing this work at other law firms, in collaboration with other business attorneys. And we've continued to do so alongside our cannabis industry work.

In the early days of adult use cannabis programs, lawyers and law firms were cautious. The pioneering attorneys had criminal law backgrounds and helped with small transactions, licensing and compliance. Some of the business advice wasn't good; some was OK. In time, more lawyers and law firms (including large law firms) entered the space, and more sophisticated deals and fights ensued. Most of the "cannabis lawyers" handling these next generation deals, came from other spaces.

It's hard to do cannabis law, only

The cannabis industry has been in the doldrums, pretty much since COVID. For this reason, industry service providers have thinned out. This includes on the legal front. The business lawyers who remain are generally strong cannabis lawyers, but are also good in other areas. To wit, in the past week I've worked on:

• An M&A deal with a sizeable A.I. company absorbing another A.I. company, through a reverse triangular merger. Nothing to do with cannabis.
• A 3PL agreement for a large apparel company, to result in commerce platforms and storefronts in and around Shanghai, China. Nothing to do with cannabis.
• Negotiation of an offer and partnership agreement for a senior lawyer to join an AM 200 outfit. Again, nothing to do with cannabis.
• Three or four cannabis business sales, and associated transactions. Cannabis law all the way.

If your cannabis lawyer can do M&A, or financing, or real estate, or litigation, or any of these things in a dicey, regulated space, then they can likely do it elsewhere. In fact, they probably already are, and were, long before they met you.

If you like working with your cannabis lawyer, and you have some other type of project or know someone who does, keep that lawyer in mind. Most cannabis lawyers are business lawyers, after all. And they are competent, creative, resourceful ones at that.