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Considering diversifying with a high-risk investment? Heard the lure of the “green rush” toward a possible $100 billion legal marijuana industry?

Before you write that check:

  • First, research the company, related persons, and the business, industry and legal risks.
  • Next, if you decide to make the leap, consider having legal counsel assist you in documenting your equity position.

Pressing escape or reboot can be difficult, after you have already signed documents. If you’re investing in a partnership or limited liability company, state law imposes default rules, unless you have an agreement modifying them. If the business — or you — fail to comply with the state’s rules on ownership and investors, the state regulator may impose penalties including cancellation or suspension of license and fines.Continue Reading High Stakes: Investing in a Legal Marijuana Business

Over the last year, the Washington state marijuana industry has anticipated the transition from an unregulated medical marijuana market to an integrated, medical-recreational market on July 1, 2016, under the Cannabis Patient Protection Act.

A month before the roll-out date, a medical doctor and marijuana patient sued the governor and others to block the merger.  On June 30, the federal court refused to stop the merger. The doctor and terminally-ill patient argued that the new rules will chill their medical communications in violation of the First Amendment. But the court validly rejected their request for an injunction on jurisdictional grounds. They had no private claim under the Controlled Substances Act, First Amendment and Supremacy Clause. The doctor and patient also failed to establish injury supporting a pretrial injunction.

Find more information on the history of the two merged industries, the recent suit and some takeaways.Continue Reading Court Declines to Prevent Merger of Washington Medical and Recreational

Monday, June 20, 2016, was summer solstice. But in Washington, there were two other things to celebrate: a day to recover after the Fremont Solstice weekend, and, for legal marijuana businesses, the first day for the licensed marijuana industry to obtain funds from out-of-state financiers under the new rules from the Washington State Liquor and Cannabis Board (WSLCB).

This post describes the regulatory framework governing loans to Washington-licensed marijuana businesses and the penalties for noncompliance.Continue Reading Out-of-State, Non-Bank Financing Becomes Available for Washington State Licensed Marijuana Businesses