Question for Those in the Cannabis Industry

[nickdanger]

I have a question for those of you in the cannabis industry now or have been in the industry. Our state is voting in 2018 for legal medical, and there is a pretty good chance of it passing. I’ve read the proposed bill, which will probably be shredded before it gets on the ballot, however.

Some of the provisions include requirements for application to open up a dispensary, grow facility, etc. I was wondering if it would be worth the time to make application, in this case, for a dispensary. At this time, the application fee is $2500 non-refundable, plus you have to be able to show you have a certain asset level to be considered. I can meet these qualifications, but would need to do some comprehensive analysis to determine if I would want to go in this direction.

I have been self employed for the last 30+ years, so running a business is not an unknown. My hesitation is centered around the hassle of dealing with all the government regulations, fees, taxes and paperwork that would be involved in addition to just the everyday running of the business. Also, I’m almost old enough to retire, but this has piqued my interest, as I don’t plan to just sit around and grow old anyway.

I’m aware of the banking and tax implications and not being able to deduct legitimate business expenses etc because the product is still illegal on the federal level.

I’m sure there are many other things to consider, and pitfalls that aren’t on my radar. Any input would be appreciated.

 

[Tranquility]

THAT is where the MONEY will be. Figuring out the regulatory landscape. It is impossible to guess where everything will go and the issues to opening a business. And, a guess is all even an expert can give before the courts have a say. For instance, say you wanted some entity protection of your assets. Some corporation/llc/limited partnership to protect your house in case the MariBusiness gets sued. Back in school we learned to throw in the boilerplate "Or, any legal business." to a corporation's organizing documents in order to get flexibility as to what business opportunities the corporate officers could seek without the action becoming "ultra vires" and threatening the entity protection. That would not help here.

Out of curiosity, is anyone aware of a court protecting owners from liability for a marijuana corporation/llc/limited partnership? I know around here some landlords have been successful in piercing the corporate veil for past due rent for out-of-business dispensaries. As to if the contracts/leases were enforceable at all hasn't really been tested yet.