The California cannabis industry isn’t immune to cutthroat capitalism. Virtually every industry that has taken off at meteoric speed has its tales of business partner betrayals. Usually one partner somehow casts the other aside and goes on to make an obscene amount of riches.
In the budding cannabis industry, such stories are beginning to crop up, with matters more complicated thanks to the patchwork of of state and local laws that continue to skirt around the fact the drug is still illegal federally. This underscores the need for everyone entering a Los Angeles marijuana business partnerships to discuss business plans, structure, employee contracts, taxes and more with a dedicated California marijuana business lawyer.
One case out of Maryland reported by The Baltimore Sun illustrates the point. After medical marijuana was legalized by state voters in 2014, a physician eager to launch a cannabis company flew to a business conference in Colorado, where he met another doctor and entrepreneur from Minnesota who shared the same goals for opportunity in his home state. The Minnesota doctor founded one of just two companies approved to produce and sell medical marijuana there in 2005. Two months later, the Maryland doctor founded his own company, making the Minnesota doctor’s firm a majority partner. The company won preapproval to cultivate and process the drug in Maryland – and later the Minnesota doctor’s firm forced the founder of the Maryland company out. Continue reading