Why Small Businesses Need a Cannabis Attorney

The cannabis industry in California has been growing at a rapid pace ever since recreational usage was legalized. A rising number of investors, growers, sellers, and couriers are trying to carve out a niche or expand their brand to a broader customer base. It may be tempting to try to keep costs lean by avoiding experts such as lawyers and trying to wade through the process alone. Even small businesses, however, are likely to hit legal and regulatory snags, and they can be susceptible to mistakes that open them up to liability and threaten the longevity of their business. Read on to learn how a California cannabis business lawyer can help your boutique cannabis company.

Myriad state and local business and licensing laws

All businesses are subject to local, state, and federal regulations. Cannabis businesses have the added burden of dealing with licensing and regulatory schemes that are changing by the month. Even larger businesses are struggling to keep pace with the changing rules surrounding the growth, sale, and distribution of marijuana. Cannabis business must deal with regular reporting and inspection requirements, communicating with and following rules issued by an alphabet soup of California regulatory agencies. Beyond that, local cities and counties issue their own rules, and many localities still restrict or prohibit the distribution of marijuana for recreational use.

If you are trying to keep your cannabis business afloat, you need to ensure that you are in perfect compliance with state and local business and cannabis licensing, that you follow all of the reporting requirements under local, state, and federal laws, that you are in compliance with federal and state labor laws, and that you are on top of all of your relationships with the various state and local agencies. On top of that, you must ensure that your business was properly formed in the first place. Dealing with all of these legal complexities can end up taking all of your time and effort, and without legal experience, you are likely to run afoul of one requirement or another sooner or later. It is much cheaper and easier to retain a cannabis business lawyer to ensure that your business is formed correctly, that you are in compliance with all reporting, regulatory, and employment requirements, and that you are regularly adjusting to changes in the law. Meanwhile, you can devote your valuable time to running and growing your business.

Dealing with tax issues

We’ve talked about it before, but it bears repeating: Business taxation is complicated at the best of times, and the cannabis industry has it worse than most. Cannabis is still illegal under federal law, creating a host of complications for cannabis businesses operating legally under California state law to comply with their federal tax requirements. Federally-insured banks do not want to lose their policies by supporting an “illegal” business, meaning cannabis companies have to keep an unusual portion of their proceeds in cash. Paying taxes in cash comes with heavy penalties and creates risks of other liability. A cannabis attorney can help you sort out your finances and tax obligations to ease your burdens as much as possible.

Call a California Cannabis Business Lawyer

If you are interested in setting up a marijuana business or are dealing with taxation, licensing, copyright or other legal issues with your cannabis business in Los Angeles or Southern California, call McReynolds Vardanyan, LLP, in Glendale at 818-855-2115. Our California cannabis business lawyers will work with you to get your budding business off the ground efficiently, effectively, and legally.

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