Colorado Psychedelics Business Formation Attorney

With the passing of the Natural Medicine Health Act in Colorado and regulations outlined for the emerging psychedelics industry in the state, a rush of new applications to form business entities is expected.

The business opportunities are considerable and, during these exciting times for researchers, entrepreneurs, investors, clinicians and manufacturers, new psychedelics businesses need a trusted partner to help them get established and position for success.

The most successful businesses are likely to be those that are formed and structured correctly from the beginning, adhering to the strict compliance rules set out by Colorado’s legislation.

Our psychedelics business formation attorneys are experienced in starting businesses in challenging industries, having helped many cannabis businesses get set up in multiple states. We have the knowledge required to advise and manage your psychedelics business formation and compliance.

Business formation services in Colorado

The business formation phase is often fraught with issues, especially in a controversial sector like psychedelics. Our experience of past scenarios in the cannabis industry will help you prepare to meet future business goals.

Our psychedelics business attorneys will help you structure and ready your new business to meet the regulatory requirements of the licensing process by executing corporate documents, leases, and other documentation. Services include:

• Entity selection and registration: limited liability company, corporation or other structure.
• Preparing documentation for regulatory compliance and licensing (federal, state and local government).
• Preparing articles of incorporation, partnership agreements, certificates of good standing, etc.
• Preparation for corporate bylaws

Structuring your business correctly and preparing it for licensing is a crucial element of a long-term success strategy. We can also help you obtain your Colorado psychedelics business license to commence operations.

Our attorneys have helped many businesses across multiple states meet the challenging requirements of obtaining cannabis business licenses. This expertise now extends to the psychedelics industry, which is similarly competitive and has the same type of stringent regulations.

Our in-depth insight into how to get set up and obtain a license can save you time, money and headaches. We can also assist nascent psychedelics businesses with the following business services:

• Financing and capital contribution negotiations to improve the financial strength of your business.
• Corporate governance and business operations (how your business will be run and overseen).
• Preparing agreements such as commercial contracts to safeguard your business.
• Employment contracts that look after your most important asset—your people.
• Intellectual property protection to help you protect your ideas, products and ingenuity.

What type of psychedelics business can you start in Colorado?

Under Colorado’s Natural Medicine Health Act, there are opportunities for entrepreneurs, health practitioners and investors to:

• Open and operate healing centers where psychedelics are used to treat patients
• Cultivate natural psychedelics for use in healing centers
• Manufacture products for use in healing centers
• Open and operate testing facilities for psychedelic products

These are the four categories of licenses covered in the Natural Medicine Health Act. Regardless of the psychedelics business type that you intend to start in Colorado, the licensing requirements will be stringent and the startup costs may be high for certain types of businesses.

Mistakes are likely to be costly. Our skilled psychedelics business formation attorneys can help you prepare your licensing application and navigate the complex compliance regulations and legal hurdles during the early days of your business and beyond.

Why should psychedelics businesses form LLCs?

Most aspiring psychedelics business owners in Colorado will need to choose between forming a Limited Liability Company (LLC) or a corporation.

To select the best structure for your business, you’ll need to consider all of the relevant factors relating to your specific circumstances, the number of business owners/investors, your business goals, tax requirements, etc.

LLC is the most common structure, with owners rather than shareholders, greater decision-making and operations flexibility than corporations and fewer formalities. As well as these benefits, LLCs also offer the following:

• Protection from personal liability from creditors
• No board of directors, stockholders or annual meetings are necessary
• Less paperwork to complete
• No restrictions on the number of owners allowed

When is forming a corporation best?

Psychedelics business owners might consider forming a corporation if there are tax advantages associated with doing so (this is sometimes but not always the case).

It’s important to understand the differences between the two different types of corporations…

S-Corps vs C-Corps

An S-Corporation (S-Corp) and a C-Corporation (C-Corp) are taxed differently by the Internal Revenue Service (IRS).

C-Corps

• Most common corporation type
• Protects against personal tax liability
• Tax is paid by the company and individual tax is paid on salaries and dividends for the owners (“double taxation”)

S-Corps

• No protection against tax debt for owners/shareholders
• Tax reported on personal tax returns
• No personal income tax is reported so the “double taxation” scenario is avoided

So, ultimately, S-Corps may offer potential tax benefits but raise the risk of liability for the business owners.

Establish your psychedelics business in Colorado

Finding the necessary legal expertise in the field of psychedelics to start your business on the right footing can be challenging.

But it’s essential to seek reliable upfront advice on business entity formation for the long-term financial health of your business.

Whether your intended business is in research, development, commercialization or medical practice involving psychedelics, our psychedelics attorneys possess the knowledge and insight required to help your Colorado psychedelics businesses become established and grow:

Call 866-329-0729 for a consultation with a knowledgeable psychedelics attorney at Cannabis Law Solutions.