New L.A. Bud Businesses Can’t Ignore Legal Snares

A marijuana business expo is now in its fifth year in L.A., with NBC-4 defining it as an event for cannabis growers, entrepreneurs, investors, doctors and users to gather, network and collaborate. As California is poised to become one of the biggest marijuana markets on earth, thanks to its recent legalization of adult recreational use of the drug. The expo is held until the end of the month, with booths making available a variety of businesses, services and products. Some keynote speakers have been identified as industry experts and trailblazers. marijuana lawyer

But as the market grows, our L.A. marijuana business attorneys cannot stress enough how important it is that whatever you niche, you need an attorney to help you navigate through the complex process of state law and local regulation. Failure to do so can end up costing you a substantial sum in the long run.

Although it seems everyone is finding a niche in the cannabis market, there are some main umbrellas under which most of these operations fall:

  • Cultivation
  • Infused products
  • Retail sales

Grow operations tend to be heavily regulated, require large upfront investment and horticultural background. Infused products are produced for recreational users or medical marijuana patients who may prefer edible forms of marijuana, and safety of these products is paramount. Retail service stores are often the priciest and toughest to launch, but can be among the most lucrative.

With any of these, you need to be aware of the existing regulatory environment and potential uncertainties, given the fact that marijuana is still considered a Schedule I narcotic under federal law. One most consider costs, residency requirements, impact of prior criminal records, potential risk, timing (often months for a license) and how you will structure all this with partners and investors.

One will also need to determine the type of legal structure you’re going to use for tax purposes, such as:

  • Sole proprietorship;
  • General partnership;
  • Limited liability company (LLC)
  • Corporation

Note too that Proposition 64 requires that you be totally compliant with the Bureau of Marijuana Control (responsible for licensing and regulation of marijuana businesses in California) and that you be sure your licensing and compliance is fully intact before you begin operations. Failure to do so may result not only in shut down of your business, but also potentially criminal charges. Entrepreneurs wading into the L.A. marijuana industry have invested too much of their time, their money and creativity to leave these elements to chance.

If you have a marijuana facility that was already operating in compliance with local ordinances on or before Jan. 1, 2018, you are likely allowed to continue operation until such time as your license is approved or denied, per AB No. 266.

You should also know that dozens of California cities in the last year have updated or established new local policies on marijuana cultivation, manufacturing and retail. New changes are being made constantly. So whether you have an existing marijuana business or are planning to launch a new one or are thinking of expanding, you need to consult with an L.A. marijuana lawyer in California who has been involved in marijuana business strategy and legal solutions from the very beginning.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 714-937-2050.

Additional Resources:

Budding Cannabis Business Expo Sprouts in Downtown Los Angeles, Sept. 27, 2018, By Aliya Jasmine, NBC-4

More Blog Entries:

“Think About the Children” Goes Both Ways When It Comes to Marijuana, Sept. 14, 2018, L.A. Marijuana Lawyer Blog