Mergers and acquisitions are complex and challenging in any industry. With the extra regulatory complexities involved in the cannabis industry, completing major corporate transactions such as these takes on extra levels of complexity.
A successful outcome greatly depends on the quality of the business advice you receive during the mergers and acquisition process.
The lawyers at Cannabis Law Solutions combine commercial sensitivity with years of experience and expertise in the cannabis industry, where businesses tend to change hands, expand and grow so rapidly.
We can help with domestic and cross-border business transactions, ensuring that your rights and interests are protected — providing a range of M&A services whether you are looking to enter the cannabis industry in Rhode Island or expand within it.
Corporate transactions for cannabis businesses
Business issues like private equity, corporate governance, restructuring, debt management, tax, and so on are by their nature complex.
So, attempting sales, mergers or acquisitions of ownership or significant assets with any business without experienced legal advice is asking for trouble.
Within the emerging cannabis industry in Rhode Island, which is so heavily regulated and fast-paced, it is particularly inadvisable. The disconnect between state and federal regulations only adds to the challenge.
Our merger and acquisition services for cannabis business clients in Rhode Island
Our cannabis business lawyers can manage the merger, acquisition and asset sale process, keeping your business compliant and managing all of the commercial, legal and financial aspects of the transaction.
We will look after the hurdles associated with the following types of corporate activities and transactions:
Regulatory compliance reviews
Financing for deals and startups
Purchase and sale agreements
Strategic advice and planning
Ownership option contracts
Debt financing, convertible debt, and other lending options
Stock and asset transactions
Mergers, acquisitions, and joint ventures
IP transactions and licensing
With a strong understanding of the most recent cannabis business laws in Rhode Island and around the U.S., we are well equipped to guide your cannabis business lawfully and sustainably towards expansion, help new entrepreneurs to enter the market here or manage a business sale.
We can advise on most domestic and intra-state activities and can usually assist in cross-border and interstate merger and acquisition transactions.
Representing your interests and protecting your business rights at every stage of the transaction, we aim to secure the best deal possible — as soon as possible — for your business.
Who do we typically represent?
The cannabis industry is broader than many people realize and involves many players. Our cannabis business lawyers support a wide range of individuals and entities in mergers, acquisitions and other related corporate transactions.
In the past, we’ve provided M&A advice and guidance for the following types of organizations:
Medical and recreational dispensaries
Cultivators, producers, processors, and vendors of cannabis, CBD, and hemp products
Raw materials vendors and other suppliers to cannabis businesses (advertising, technology, security, etc.)
Commercial real estate developers as well as investors interested in leasing properties to cannabis retail companies and other projects
Private equity and venture capital funds
Insurance companies considering the risks and legal implications of insuring businesses and other efforts related to the cannabis industry
What does the M&A Process entail in Rhode Island?
Several key steps are involved in executing a successful merger, acquisition or other business transaction — regardless of the industry that you operate in.
With the legal complexities of the cannabis industry to consider, the process needs to be handled by professionals with a deep understanding of the many associated pitfalls.
Generally, our lawyers will help you navigate each of the following stages of your business transaction:
The documentation process
At the beginning of the merger and acquisition process, there is extensive, detailed documentation to fill out.
We can assist with the meticulous process required to work through this documentation, helping you avoid the types of errors that can delay proceedings or prevent a deal from going through.
The negotiation process
Negotiation is a critical element of the merger and acquisition process.
Our experience in doing the necessary homework, understanding the true valuations of cannabis businesses, and negotiating the right deals for our clients can help negotiate the terms and structure of your deal. We will ensure that your best interests are served in the event of successful negotiations with the other party or parties.
It takes legal experience to navigate the restrictions imposed by agencies for cannabis business transactions and to ensure regulatory compliance with state and local agencies.
A successful M&A process with our Rhode Island cannabis attorneys…
The booming cannabis industry in Rhode Island has a lot to offer but it’s important to get the right advice before you set up and as you expand and grow.
We have been active participants as the cannabis industry has grown around the U.S. and have helped many entrepreneurs not only set up but flourish in their state.
The strongest cannabis businesses in Rhode Island will be those that have planned, prepared and protected themselves when conducting the business transactions necessary to become established in the industry here.
For informed legal advice, call 866-329-0729 for a consultation with a knowledgeable cannabis attorney at Cannabis Law Solutions.
How will our cannabis and psychedelic business services help you
Cannabis & psychedelics business entity formation
Whether you are looking to form a limited liability company (LLC) or a corporation, our experienced business lawyers can discuss the pros and cons of both and help you incorporate your business with the optimal structure to achieve your goals.
Cannabis & psychedelics business licenses
If you want to run a cannabis or psychedelics business, you will need a valid business license issued by your state authority as well as local permits. Eligibility criteria are likely to be stringent and we can help you navigate the often-complex license application process.
Cannabis & psychedelics corporate documentation
Whether you need to prepare for a license application, transfer of business ownership, change of corporate structure, transfer business location or another business process, we can help you identify and draft the documentation you need to operate legally in your state.
Cannabis & psychedelics administrative law
State authorities watch licensed and unlicensed cannabis and psychedelics businesses closely. If you violate regulations, you could face an administrative penalty. Our attorneys can provide representation or help you prepare for an administrative hearing, settlement conference or appeal.
Cannabis & psychedelics disputes and litigation
Whether you have a dispute with another business, a legal issue with one of your partners or a licensing or administrative issue, you may need legal assistance to help resolve it. We are adept at alternative dispute resolution methods as well as civil litigation.
Cannabis & psychedelics regulatory compliance
As the cannabis and psychedelics industries emerge in states around the U.S., they are more heavily regulated than most other industries. We can help your business navigate the red tape and plan to stay on the right side of the regulatory authorities in whichever state you are based.
McKenzie and her firm were definitely awesome. She was conscientious of my money, and made efforts to let me help to decrease the expense of my case. I was not confident about my chances of success before hiring her, but once I did, I slept so much better. Definitely the best choice (and I met with a few!)
These guys rock!!! Met with McKenzie about an issue I needed some help on. She was honest, professional and gave great direction that was easy to follow and solved the problem! Legal Solutions of New Mexico conduct themselves unlike any other lawyers I’ve ever seen – starting with their website, all the way through to the personal attention they provide! They are direct and get the job done while keeping their clients interests at heart. 10/10 would recommend to anyone needing legal help.
“One of the best for sure”
McKenzie St.Denis is THE best! She’s very thorough and listens to you. She gives the best recommendation based on YOUR needs and wants. She genuinely has the clients best interest at heart—no doubt. I definitely recommend her as she has integrity—super sharp! One of the best for sure. Thank you so much, McKenzie!!!
Opening a successful and legal marijuana dispensary begins with hiring a knowledgeable cannabis attorney and learning all that you can about this industry and the applicable laws. The next step is to set up a corporate business structure and create a retail business plan, which an attorney can also help you with. You will also need to research potential locations for your business to find out where licensing is legal.
Next, obtain the necessary licensing to operate your cannabis business and ensure that your operational infrastructure follows all laws and regulations. If you are not growing or producing your products yourself, you will need to contract with cultivators and product manufacturers to supply your business.
Before you begin the process of applying for a cannabis license, you need to establish a business from which to apply. The state will not consider an application from an individual; instead, the applicant must be a business entity in good standing with the state.
Your business will begin when you choose a legal entity and file the appropriate paperwork with the Secretary of State. After that, you will file with the IRS and obtain a taxpayer identification number.
You would start with articles of incorporation and include other key corporate provisions in the bylaws that state how your company will be governed. If your business is a partnership or limited liability company, you will need an operating agreement. Depending on your line of business, you may also need other licenses to operate.
In addition, you will also need other corporate documents that the Department of Health will want to see when they are considering your cannabis application. Of importance here, your application would ask you to provide:
Your articles of incorporation
Certificate of good standing
An attorney can help you both choose the appropriate business entity and draft and file any necessary documentation. When you are seeking to enter the cannabis field, it is important to get your business formation process right to make the best possible impression on the Department of Health. Doing so will allow you to devote as much time as possible to your cannabis-related business arrangements.
As a precursor to even being able to apply for state approval of your cannabis business, you must have a properly formed business entity. As a result, the first documentation you must file is the documentation establishing your business.
Next, you will need to obtain a tax identification number by registering with the IRS. In addition, the licensing application also asks you to provide your current state business license registration.
Beyond your general business licenses, you would also need specific permission to operate a cannabis business. This involves a very strict registration process where the state will closely scrutinize your application. You can expect the state to review each of the licenses that they request since it wants to be sure that your business complies with laws before they are granted the right to operate in the cannabis industry.
Compliance means making sure that you follow the myriad of laws that apply to your state’s cannabis businesses. Further, the regulatory landscape is fast-changing as the state gains more experience overseeing the businesses.
What this means for you is that knowledge is one of the most important things that you can have. Not only do you need an expert in the current laws, but you also need to be able to anticipate future changes in the law. This means that each business needs an expert who understands the laws and can advise them as to the best means of following them.
Also, compliance also means that you have sound policies and procedures in place that govern your business. The Department of Health is already looking at your policies when they evaluate your initial application. However, they reserve the right to audit and inspect your business to verify that you are complying with the law. You should always be ready for an inspection by documenting how you are following the regulations.
The best way to show compliance is by keeping your paperwork organized and conducting your own internal audits. The Department is interested primarily in your safety procedures, so you should be ready to show how you are following your own procedures. Further, you should always reevaluate your own policies to see if there are any weaknesses or changes that can be made to strengthen them.
The major thing that the Department of Health is interested in is the safety of both the product and the operation. As a baseline, the state wants to know who all of the owners are and the people who will be working in the operation.
While there are common documents among all the application classes that the Department is seeking, there are also special requirements for each of the categories.
For example, when the Department is evaluating a manufacturing application, it will pay close attention to measures that your business takes to ensure proper hygiene and testing methods. The Department also will pay attention to the manufacturer’s procurement practice and the security of its inventory.
With regard to laboratory submissions, the focus is partially on the testing processes and equipment that the business will use. The Department wants technical, scientific details of the exact tests and the quality control that the laboratory will use for testing. The emphasis is on ensuring product safety.
For courier businesses, the Department will scrutinize the safety and security of the delivery process, including the vehicles and the delivery routes that are used. The emphasis is on the safety of qualified patients, primary caregivers, and courier staff in light of the product being delivered. In addition, since there is interaction with patients, the Department wants to see how the applicant plans on protecting patient privacy.
Cannabis legalization often works in a series of steps. Broadly speaking, cannabis policy reform occurs in the following stages:
Prohibition: Criminal penalties apply for the possession or use of cannabis.
Decriminalization: Low-level criminal penalties are removed for cannabis usage (e.g., personal possession) and criminal penalties may be replaced with civil fines.
Medical legalization: Full medical legalization with commercial licensing and testing may come straight away or in a series of stages.
Legalization: State laws are changed to make any cannabis activity a crime no longer. Cannabis must be removed from the Controlled Substances Act and new rules added for the legal commercial cultivation, distribution, testing, and sales of cannabis.
Oregon and Colorado states have decriminalized the use, sale, and possession of psilocybin, which is the active ingredient in “magic mushrooms” and has been shown to have great value in treating certain medical conditions, like depression, anxiety and life-threatening cancers.
Besides these states, the cities of Oakland and Santa Cruz in California as well as Washington, D.C., Somerville, Cambridge and Northampton (Massachusetts) have all decriminalized psilocybin.
It should be noted that all psychedelics are illegal in the United States under federal law and drugs like MDMA, DMT, ketamine, LSD and psilocybin are Schedule 1 controlled substances. This means they are viewed as having no medical purpose and no legitimate commercial application