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Legal Considerations for the Cannabis Industry

Entrepreneurs in Nevada who want to open cannabis businesses must take account of the legal issues that apply to the industry in their contracts, financing, and other matters. Paying attention to the legal considerations of the cannabis industry can help keep businesses from running afoul of the regulations and laws that govern this highly regulated industry. Businesses will need to do some of the same things that other types of businesses do, including choosing a legal entity structure, securing funding, and drafting contracts for their suppliers. However, they will also need to take a few extra steps because of the nature of the cannabis industry.

Preliminary Steps For a Cannabis Business

Before people engage in a cannabis business, they need to familiarize themselves with the laws and regulations that govern the industry in Nevada. People should recognize that cannabis is still illegal under federal law and ensure that they set up their companies in a way that stringently follows Nevada’s requirements to be protected. Entrepreneurs should choose a legal entity structure under which their companies will operate for liability protection. They will also need to secure all of the licenses that are required to operate the business and secure funding. Entrepreneurs will need to find banks that will agree to enter into banking relationships with them.  Many banks refuse to work with cannabis businesses, so this may take some research.

Cannabis Contracts

Contracts for cannabis businesses should include language stating that both parties understand that cannabis is illegal under federal law. The parties should agree that they will operate strictly in compliance with state regulations and laws. The contracts should also include indemnification and dispute resolution clauses and provide that the jurisdiction to handle disputes lies with the state courts to avoid the federal courts from deciding cannabis contract disputes. Contracts will need to be drafted with the company’s suppliers and distributors with a careful review by a cannabis law attorney to ensure the business is protected.  

Real Estate and Zoning Issues

If the business will acquire real estate, the owner will need to research zoning issues to ensure that the proposed location will allow a cannabis business to operate. The owner will also want to ensure that the lease term will last for the entire licensing period so that business operations will not be disrupted because of the expiration of the lease.  This process also necessitates approval from local municipalities. 

What Our Clients Say

My family and I are thankful to Maddox, Segerblom and Canepa for their assistance during a three year case regarding construction defects to our home. We are truly appreciative of their knowledge, determination and assistance during this process. They were always courteous, and available to answer any and all of our concerns and questions. Thank you for the wonderful resolution. Many thanks to you and your staff.

Frances Castelli

We used Maddox, Segerblom & Canepa to represent us in a legal suit re problems in construction on new properties that we purchased from a developer.

We were very pleased with the representation provided by this law firm. They were fully communicative, responsive to our questions and were very knowledgeable about the issues that required resolution. Even after we reached a resolution, they have been responsive in making sure to point us in the right direction for help with repairs that are required.

We would recommend them to others with similar issues that require legal help.

Atam & Margo Lalchandani

Maddox, Segerblom & Canepa did a FANTASTIC job in our construction defects case. I interacted with several people from their office throughout our 2 year litigation. Their staff is friendly, knowledgeable and always prompt about getting back to you when you have questions/comments/concerns. I especially enjoyed working with Darcy, Ardea, Eva, and Sandra. Being part of a lawsuit is no fun for anyone, but if you have to be a part of one, I can’t say enough positive things about this firm!

Victoria Fox

The law firm of Maddox, Segerblom, and Canepa were amazing to work with. They were thorough and always available for any questions we had. We worked a lot with Sandy who was always professional, friendly, always on time for appointments and just a great person to represent this firm. We have never been involved in a law suit before and they made it comfortable for us. We appreciate the hard work the lawyers and people who work for the firm did and would recommend them.

Becky Loudenburg
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