Cannabis

Client Challenges and Opportunities

While opportunities abound, the current conflict between federal and state laws and local regulations (including the federal Controlled Substances Act, which makes it a criminal offense to manufacture, distribute, dispense, or possess marijuana, even where state or local law authorizes its use) presents considerable challenges to individuals and businesses in the cannabis industry, as well as those intersecting with or affected by the growing number of cannabis enterprises and users. Snell & Wilmer attorneys from across various practice areas bring significant experience in regulatory and compliance, employment, intellectual property, real estate, tax, banking and finance, mergers and acquisitions and more to bear in helping clients find their footing in this complex and uneven landscape.

Areas of Service

Snell & Wilmer’s interdisciplinary cannabis group has a strong understanding of cannabis laws and regulations, as well as the unique needs of cannabis industry clients. In addition, our attorneys help employers and others navigate issues consequent to doing business in states where various medical and adult-use cannabis scenarios exist. Our services include:

Licensing and registration
Local government land use approvals and special use permits
Intellectual property, patent protection and research considerations
Real estate purchases, dispositions and leasing
Local, state and federal taxes
Employment and workplace consulting related to cannabis, including drafting drug testing policies
Financings, joint ventures, and mergers and acquisitions
Litigation services
Counseling on banking and financing issues
Immigration concerns
Corporate structuring and governance
Cannabis-related investing
Partnership and operating agreements
Supply and distribution agreements
FINRA- and securities-related impacts
Potential liabilities for Insurance companies covering cannabis-related businesses

Clients We Serve

Cultivators, manufacturers, processors, distributors and dispensaries of cannabis and related products, such as hemp, CBD and hash
Suppliers to the cannabis industry, such as raw material vendors, and technology, advertising, security and consumption goods companies
Commercial real estate developers and investors focused on cannabis properties and companies
Broker-dealers and private equity and venture capital funds
Family offices and institutional investors intersecting with the cannabis industry
Employers negotiating the complexities of cannabis in the workplace
Insurance companies assessing the impact of covering cannabis-related businesses and projects

Why Clients Select Us

With attorneys from many practice areas focused on evolving cannabis laws and regulations, our group has the breadth of knowledge and industry insights to assist our clients in whatever ways they interact with the cannabis industry. Our team is well-versed on the most current federal, state and local laws, regulations and guidance including the Controlled Substance Act (CSA), Agricultural Improvement Act of 2018, Bank Secrecy Act, anti-money laundering (AML) statutes and the various applicable regulations and guidance from the Drug Enforcement Administration (DEA), Department of Agriculture (USDA), the Food and Drug Administration (FDA) and the Bank Secrecy Act, among others. Snell & Wilmer attorneys frequently publish and speak on the topic, including regarding how civil rights laws impact employee cannabis use, and the interpretation of changes in law in various jurisdictions.

Experience

Investment Transactions

Representation of a Canadian public company in secured royalty investments in various U.S.-based cannabis companies
Representation of a cannabis hardware company in its acquisition by a Canadian public company for nine figures
Representation of the majority ownership group of a cannabis company in a lawsuit with its minority owners. The representation included vetting potential buyers and negotiating the exchange of due diligence materials and the timing of a sale.
Representation of client in connection with proposed business combination with publicly traded cannabis company, and in connection with related Hart-Scott-Rodino antitrust filing
Representation of a client in connection with multiple acquisitions of dispensaries, cultivation facilities/operations and/or related management companies throughout the United States (including in Arizona, Illinois, Maryland, Massachusetts, Michigan, New Jersey and Ohio), involving a variety of transaction structures depending on applicable regulations and business/economic terms and other considerations
Representation of a client in connection with multiple joint ventures throughout the United States (including in Arkansas, Maryland, Massachusetts, New Jersey and Ohio) that, in turn, acquired cannabis businesses or applied for dispensary, cultivation and/or other cannabis-related licenses. Matters involved negotiating and documenting business/economic terms, related equity and debt financing arrangements, and key performance milestones.
Representation of a client in connection with “roll-up” of various minority business partners in joint ventures and other enterprises.
Representation of a client in connection with Hart-Scott-Rodino antitrust filing in connection with proposed acquisition of large, privately held cannabis company
Representation of a client in connection with sale of Arizona dispensary management company (and related dispensary management services agreement) to publicly traded cannabis company. Matter also involved negotiating a new cultivation services agreement and a consensual change of control of the Arizona nonprofit corporation that holds the dispensary license.

Financing

Representation of multiple CBD extraction and product companies in capital-raising transactions structured as private placements under the securities laws
Representation of a client in connection with its acquisition of farms to be converted to hemp growing and CBD processing facilities
Representation of a vape pen manufacturer in multiple private equity financing transactions
Representation of client in connection with multiple equity and debt financing transactions, including private placements of equity securities under Regulation D of the U.S. Securities Act of 1933, as amended, and secured and unsecured loan arrangements with both institutional and private lenders.

Employment

Representation of employers as to drug testing and employment decisions (including terminations) related to employees who test positive for marijuana
Representation of employers with drafting and enforcing medical marijuana and drug testing policies

Real Estate and Leasing

Representation of multiple property owners in structuring and negotiating leases to cannabis operators

Agreements

Representation of a client in negotiation of supply and distribution agreements for various parties in the cannabis supply chain
Representation of a cannabis client in connection with negotiation and drafting of various management services agreements relating to cannabis dispensary and/or cultivation operations

Litigation

Representation of a cannabis client in connection with multiple litigation matters involving a wide range of issues, both as plaintiff and as defendant

Business Operations

Representation of a cannabis client in connection with various corporate and business matters, including formation of new entities, review and negotiation of operating agreements and other contracts, and work on potential acquisitions
Representation of a client in connection with various corporate and business matters, including formation of new entities, review and negotiation of operating agreements, employment agreements and other contracts, trademark/intellectual property matters, labor and employment matters, tribal law matters, and leasing/real estate matters

Immigration