Cannabis Practice

We understand that while the cannabis and hemp industries are new the complexity is high and the mistakes are costly. Our goal is to reduce the risk and increase the likelihood of success for our clients.

We help the following industry participants:

  • Cultivators,
  • Manufacturers,
  • Distributors,
  • Testing facilities,
  • Dispensaries, and
  • Ancillary businesses

We also regularly work with the following:

  • Vertically integrated regional players,
  • Multi-state operators,
  • Investors, and
  • Lenders

For more information please contact:

Kresimir Peharda, Partner, Chair of Cannabis Practice
kpeharda@yklaw.us
213-401-0970

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Capital Raising and Finance

Cannabis companies have fewer options when raising capital than their non-cannabis counterparts.  For most plant-touching clients bank financing is not an option.  Furthermore, fewer institutional investors are open to investing in plant-touching companies.

We assist clients with:

  • Letters of intent
  • Convertible debt
  • SAFEs
  • Stock purchase agreements
  • Investor disclosure documents
  • Promissory notes
  • Loan agreements
  • Security agreements
  • Blue Sky-securities filings

Commercial Agreements

Commercial agreements are the lifeblood of any business.  Cannabis companies especially have another reason to have clear written agreements-regulatory audits by state or local governmental authorities. YK Law helps cannabis companies to protect their interests and minimize risk.

We advise on the following:

  • Cultivation agreements
  • Manufacturing agreements
  • Licensing agreements
  • Distribution agreements
  • Vendor agreements

Corporate and Corporate Governance

Successful cannabis companies require careful planning and ongoing assistance with corporate governance.

We assist clients with:

  • Formations
  • Organizational structure
  • Board of Directors issues
  • Related party transactions
  • Managing affiliated entity relationships
  • Joint ventures
  • Strategic alliances

Employment

The cannabis industry has an additional level of burden when it comes to its relationship with its workforce.  Whether it is specialized training for their workers or agreements with unions, cannabis companies must comply with all of the relevant industry rules and regulations.

We advise on:

  • Employee handbooks
  • Employee training
  • Employment agreements
  • Employment practices
  • Separation agreements

General Outside Counsel Service

We offer our clients the chance to have a more intimate relationship by selecting us as their outside general counsel.

Intellectual Property

Intellectual property (IP) has increasingly become something of value in the cannabis and hemp industries.  Unfortunately for cannabis companies, courts and federal agencies have been reluctant to protect the IP of cannabis companies.  This reluctance has caused tremendous hardship to the industry and has emboldened bad actors.

We assist clients with:

  • IP strategy
  • Federal and state trademarks
  • Patents
  • Licensing agreements
  • Non-disclosure agreements
  • Trade secrets

Hemp & CBD

While not as regulated as the cannabis industry, hemp and CBD still have their own peculiarities and challenges. We work with growers, extractors, distributors, and food, beverage, and supplement brands.

We advise on:

  • Agreements with growers
  • Processing agreements
  • Manufacturing agreements
  • Licensing agreements
  • Sales agreements

Licensing and Regulatory

For the cannabis industry licensing and regulatory issues are paramount.  We advise everyone from single location owners to public companies and investors on licensing and regulatory matters.

We assist clients with:

  • Obtaining city and state licenses
  • Preparing license applications
  • Amending licenses
  • Regulatory filings such as changes in ownership
  • Compliance audits

Litigation

Like any other industry, cannabis and hemp have their fair share of disputes.  The risk of Federal criminal prosecution created a legacy of poor or non-existent documentation in the industry making it ripe for disputes of every kind.

We advise on:

  • Pre-litigation matters
  • Binding arbitration
  • Traditional litigation in state court

Mergers and Acquisitions

Mergers and acquisitions activity has historically been dominated by Canadian public companies.  We see increased interest in M&A activity involving private U.S. based companies driven in part by events on Wall Street.

We represent the following:

  • Legacy operators and new entrants buying single and multiple location licensed businesses
  • Private equity and institutional investors acquiring multiple licensed entities
  • Vertically integrated regional players selling or buying licensed entities
  • Sellers of legacy branded businesses

Real Estate

Due to the licensing requirements, the real estate component of a cannabis business cannot be an afterthought.  We view real estate through a regulatory lens to make sure that problems are avoided.

We advise operators and landlords on:

  • Lease agreements
  • Purchase and sale agreements for real property
  • Property due diligence

Tax

Due in large measure to Section 280E of the IRS Code, cannabis businesses must take great care in how they are structured and how they operate.

Clients seek our assistance in structuring their entities and operations in a manner to legally reduce their tax liabilities.

We also advise on the most tax favorable approach to business combinations and M&A.

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