Cannabis
Sarah Westby, Chair of Shipman's Cannabis practice, discusses how you can take advantage of the opportunities for growth in the rapidly expanding cannabis industry. She answers questions and covers many of the emerging complex legal, regulatory and competitive issues that position business leaders to claim their place in this new environment.
The cannabis industry has grown dramatically in recent years as more states have legalized it for medical or recreational use. Global sales of cannabis products are expected to increase from $13.4 billion in 2020 to $33.6 billion by 2025.[1]
While investors, growers, distributors, retailers and other entrepreneurs rush to take advantage of this growth opportunity, however, they still face many complex challenges, including an ever-changing legal landscape. While most states and the District of Columbia have legalized some form of cannabis use and the federal government has decriminalized the possession, use, distribution and sale of hemp, cannabis remains a controlled substance under federal law, and the use of cannabidiol (CBD) in consumer products is a gray area of FDA regulation.
That’s where the team at Shipman comes in.
With years of experience in the cannabis industry, we understand the complex legal, regulatory and competitive issues cannabis businesses face right now. Our lawyers have years of experience counseling startups and emerging-growth companies as they establish and expand businesses in highly regulated industries.
We can help cannabis-industry business leaders navigate the challenges of - and claim their place in - this new environment. We offer broad, detailed counsel on state and local laws regulating cannabis-related business activities, including:
- Forming and structuring a cannabis business
- Applying for a cannabis license, whether as a general applicant or a Social Equity Applicant
- Investing in cannabis-related business ventures
- Establishing and siting a cannabis business
- Operating a cannabis business
- Resolving business-related disputes
- Obtaining appropriate zoning and environmental permits
- Navigating various federal, state, and local environmental regulations
- Advising on the creation and implementation of Workforce Development Plans and Social Equity Plans
As the legal cannabis industry grows and matures, those who want to capitalize on that growth will need to remain agile and equipped with the most up-to-date legal counsel possible. Let the experienced team at Shipman guide you as you claim your part of this exciting opportunity.
In addition to cannabis-industry clients, Shipman advises businesses in banking and finance, health care, laboratory testing, employment, education, manufacturing and other sectors on issues related to the legalization of hemp and cannabis, including:
- drug testing and other policies relating to employees using prescribed medical marijuana,
- lending risks associated with the conflict between state and federal laws, and
- data security matters relating to software developed for and used by cannabis companies.
[1] https://www.statista.com/statistics/1005176/global-legal-cannabis-market-size/
Investing In, Establishing, and Siting a Cannabis Business
Connecticut has established specific procedures and requirements for operating a cannabis business in the state. These unique issues arise in addition to traditional investment, startup and business-formation concerns. We provide sophisticated, knowledgeable legal guidance on the following:
- Applying for and maintaining applicable licenses
- Forming a legal entity, drafting organizing documents, and structuring joint ventures
- Obtaining seed and early state financing and angel investments
- Social Equity Applicant criteria and disqualifying conditions
- Creating security, social equity, and workforce development plans
- Creating and implementing effective compliance programs
- Establishing investment, transaction and business-relationship structures that meet relevant state requirements
- Negotiating supplier and vendor contracts
- Identifying and protecting intellectual property
- Obtaining local zoning and land use approvals
- Negotiating real estate acquisitions, leases and construction agreements
- Pursuing Opportunity Zone and other tax incentives
- Advising and commenting on legislative and regulatory proposals
Operating a Cannabis Business
Once a retail structure has been put in place, businesses will face a broad spectrum of day-to-day compliance and operational concerns. Drawing on our experience in similar regulated industries, we can help clients make effective, strategic decisions that protect their investments and support long-term objectives. We regularly advise clients on:
- Labor and employment matters, including hiring, contract, termination and promotion, and development of employment policies and manuals
- Data privacy and information security
- State tax reporting and compliance
- Ongoing compliance matters, including internal audits, product testing, labeling requirements, and other agricultural and production facility reporting requirements
Dispute Resolution
Our litigation team has extensive experience handling commercial and criminal disputes at trial, at the appellate level, and in settlement negotiations and alternative dispute resolution. We recognize the friction between state and federal cannabis laws and seek to assist clients to achieve an appropriate resolution whenever possible. We represent clients in the following areas:
- Data breaches and cybersecurity incidents, including disclosures and public relations
- Government investigations
- Product liability
- White-collar criminal defense
- Regulatory enforcement actions
- Intellectual property
Primary Contacts
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