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Tag: Legal Advice

  • The Best Advice For Starting A Cannabis Business

    The Best Advice For Starting A Cannabis Business

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    Consumers continue to drive an ever expanding marijuana industry and new opportunities appear at every turn.  While the market is involving, there is still opportunities to make money and start a successful business.  Public opinion is pro-legalization and it is just a matter of time before the government reschedules driving more growth. If you are considering it, here is the best advice for starting a cannabis business.

    Lonnie Rosenwald is a partner in Zuber Lawler’s cannabis practice group and shares some valuable insight into starting a business. In the rapidly growing cannabis industry, small business owners face a myriad of challenges, ranging from the typical complexities of business structures and investment to navigating the particular nuances of cannabis contracts, banking, and real estate. Establishing a successful cannabis business requires careful consideration of these areas of law to ensure compliance, mitigate risks, and foster growth. Here’s a brief guide for small cannabis business owners on five key areas for your focus: legal entities, investments, contracts, banking, and real estate. 

    Photo by Luis Llerena via Unsplash
    1. Legal Entities

    Choosing the right legal entity is crucial for cannabis businesses. Each state’s cannabis program differs from all other states, and the legal entity you need may be required by your state’s program. Additionally, each structure has advantages and disadvantages. Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations all offer distinct benefits. For example, LLCs are popular structures for new cannabis businesses due to the liability protection they provide their owners (called “members”) while maintaining flexibility in management and favorable tax treatment. Some sophisticated investors prefer corporations. A sole proprietorship is not an entity, but it is simpler than the other business structures in that you, and only you, control the business, but you do not have liability protection.  Partnerships are just that:  a number of partners work or invest together in the business. A joint venture is a type of partnership whereby the partners are committed to a common goal; general partners may not be protected from liability; limited partners typically are.  Corporations have limited liability for the shareholders and employees. A decision on your business entity structure should be made with advice from your attorneys and tax professionals familiar with cannabis other applicable laws and regulations. Your business may also be required to comply with the U.S. Corporate Transparency Act with respect to reporting to the Financial Crimes Enforcement Network (FinCEN) certain information regarding the beneficial ownership of your entity (effective as of January 1, 2024).   Whether you are required to report should be a topic of conversation with your attorney.  

    RELATED: Guess What Is Gumming Up The Marijuana World

    1. Investments:

    Securing funding by private capital raises, financial institution lending and/or friends and family commitments is often a crucial step in the growth journey of a small cannabis business because of the significant costs of real estate, equipment, and employees. Investors, whether individuals or venture capital firms, are attracted to businesses with a solid legal foundation, clear growth strategies, and compliance with laws and industry regulations. Business owners should be prepared to present potential investors and lenders comprehensive business plans, showcasing not only the financial viability of the venture, but also a deep understanding of the legal and regulatory landscape. The U.S. and state securities laws typically apply to offerings of securities in cannabis entities notwithstanding that your state may have a cannabis program and that cannabis is illegal at the federal level.  These laws are particularly complex, so before issuing shares or member or partner interests in your cannabis business, please seek legal advice from securities-competent counsel.   Businesses should have an attorney review all investor materials to avoid problems down the road. 

    5 Amazing Things To Know About CBD Was And Shatter
    Photo by Cappi Thompson/Getty Images
    1. Contracts:

    Clear and comprehensive contracts are the foundation of any successful business. In the cannabis industry, contracts play a vital role in clarifying and documenting relationships with suppliers, distributors, employees, investors, lenders, and partners. Ensuring contracts comply with state cannabis regulations (as well as other applicable laws and regulations) is critical to avoiding the potential that the contract is unenforceable or worse, illegal. We frequently see clients desiring to buy or sell a cannabis business, obtain loans or investments, and those entering into complex contracts regarding real estate or equipment leases, cultivation, manufacturing, transport, marketing services agreements, and partnership agreements.  Many of these contracts are lengthy, and of course, use legalese that you may not understand.  Some include complex rights and responsibilities, as well as how the parties will calculate various fees and expenses relating to the contract. Seeking legal advice during the contract drafting and negotiation stages is a prudent step. 

    RELATED: The Most Popular Marijuana Flavors

    1. Banking:

    Accessing banking services remains a significant challenge for many cannabis businesses as the sale and consumption of cannabis remains illegal under federal law, and most financial institutions (banks) are regulated by the U.S. and are required to follow certain regulations applicable to their operations. While some banks are cannabis-friendly, business owners must establish relationships with banks that have experience in the cannabis industry and that understand and comply with state-specific cannabis regulations. It is imperative to maintain meticulous financial records. Exploring alternative financial service providers, such as credit unions or specialized cannabis banking services, can help businesses navigate the financial landscape. Financial institutions such as banks will want to see what collateral your business has, such as ownership of real estate (a lease typically won’t work here), to secure your promises to repay a loan. Most banks will not lend to plant-touching cannabis businesses (even those with real estate assets), nor will they even process your deposits, debits or credits.  Ask cannabis leaders in your state for cannabis bank referrals; caution, most banks doing business with cannabis businesses don’t publicize that fact!   

    RELATED: Science Says Medical Marijuana Improves Quality Of Life

    1. Real Estate:

    Cannabis businesses must carefully consider real estate issues, including zoning, building, health and safety and other applicable laws and regulations, lease and lending agreements, and compliance with state, county, and municipal property laws, as well as owners associations’ regulations. Zoning regulations can significantly impact the location of cannabis operations, making it crucial to choose properties where cannabis activities are permitted under local ordinances. Often, the cannabis business’ compliance with local zoning codes requires a lengthy and time-consuming review process with a substantial amount of documents, plans, specifications and other costly information, as well as public hearings and numerous conferences with planning staff. Leases should address cannabis-related activities explicitly by including cannabis use (for cultivation, extraction, retail, etc.) in the permitted use provision, permitting limited access to the facility by landlord (and its lenders), allowing early termination in the event of a change in cannabis law prohibiting a cannabis use, and the like, also ensuring alignment with both state and local regulations. Engaging with real estate professionals and attorneys familiar with the intricacies of the cannabis industry can streamline the process of finding and using suitable properties. 

    RELATED: California or New York, Which Has The Biggest Marijuana Mess

    Small cannabis business owners must be thoughtful and proactive in choosing suitable legal entities, negotiating enforceable contracts, accessing banking and investment and acquiring real estate. Navigating the complex regulatory landscape requires collaboration with legal and financial professionals who specialize in the cannabis industry. By establishing a solid foundation in these five key areas, small cannabis businesses can position themselves for sustainable growth and success in this dynamic and challenging industry. 

    Lonnie Rosenwald is a partner in Zuber Lawler’s cannabis practice group. Ms. Rosenwald  is located in Seattle, WA. These comments are general and not specific to your particular business or business situation; these comments are not intended to be legal advice, nor is Ms. Rosenwald or her firm representing you.  We encourage you to seek qualified legal counsel to represent you or your business especially with respect to a cannabis (touching or not) business.  

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    Terry Hacienda

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  • AI’s Growing Impact on Marketing in the Legal Industry | Entrepreneur

    AI’s Growing Impact on Marketing in the Legal Industry | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    The legal space is ultra-competitive. Attorneys and legal professionals will already know this not-so-secret fact. Marketing yourself and your team is vital to attract clients to your firm/organization.

    Historically, the legal space has been dominated by bombastic personalities taking to television and billboards that line the busy highways of America. While both methods have their positive attributes, a trend has begun to emerge throughout the industry; the rise of AI integration into general marketing.

    AI‘s growing prevalence in the industry and the general public has confused many people. So let’s start here, what exactly is AI?

    Artificial intelligence (AI) is defined by Britannica as “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.”

    Related: Small Businesses Can and Should Consider Investing in AI Technology — With a Cautious Approach

    AI has long been a staple tool among professionals in the legal field. Many law firms or legal organizations feature an AI chatbot on their homepage and landing pages. These bots assist with the intake of new clients. The bots are trained to collect relevant information and direct clients to helpful links and pages on a firm’s site.

    AI bots like ChatGPT or Google’s Bard primarily sparked the current buzz surrounding AI. Both of these AI bots are conversational AIs. Both have shown to have extensive ability to generate content quickly. Savvy marketers know that content plays a significant factor in converting potential clients and helping drive you up the Google rankings.

    Some marketing professionals use Bard and ChatGPT to transform how they generate content internally. VentureBeat’s editorial director Michale Nuñez recently disclosed that his team is using AI to assist in content generation. The exact details of the full scope of AI-generated content were not fully explained.

    Deep conversations regarding its ethical framework are emerging with the prevalence of AI-generated content. Concerns regarding plagiarism and misinformation are among the most common points of contention. Is it ethical to eliminate the human element associated with written content? How deep is the oversight on this content before it’s published? Can AI show an inherent bias?

    The debate on the ethical ramifications is still ongoing and unclear. However, this is not stopping many marketers from dipping their toes into the pool. Beyond Google Bard, the company wants to integrate AI assistance into general searches.

    Google has been very active in looking to integrate AI into more aspects of its services beyond Bard. In the company’s own words, they are “supercharging” searches. Through the integration of generative AI, Google is working to simplify searching; one way is by suggesting questions related to the topic.

    Related: Why AI is Changing the Future of Personal Branding

    Currently, Google is allowing users to experiment with AI in searches. Upon searching a term in the experimental new system, users are given the option for AI to suggest content based on their inquiry.

    If a potential client were to look up a search term like “How much does a personal injury lawyer cost,” they would likely see a list of local PI attorneys optimizing for that content. The AI-empowered may suggest an inquiry like “How much does a PI attorney charge?”

    The AI bot will pull a snippet from a website with relevant inquiry to the search and attempt to answer the question without users having to click the link. In this case, it will be pertinent regarding the cost of attorneys. However, they are encouraged to follow the link if the inquiry is sufficient or need additional information.

    For marketers working in the legal field, this is especially interesting. Take, for example, a search for a local personal injury lawyer. In the trial, we tested this by searching for a PI lawyer near me. The AI suggested a handful of local attorneys and a follow-up question for the inquiry, which would offer more content.

    Some marketers may question how different this is compared to already existing searches? In short, they’re different. Comparing a search of the same topic in the AI-recommended environment versus the standard search shows two different results in the featured snippet and several ranking pages for the search term.

    This isn’t always the case, though. Searching for “PI lawyers near me” in the AI search generated similar results from the traditional search, which featured the Map Pack at the top.

    There is concern about whether an AI-powered bot can decipher content to determine fact or fiction. The more these new AI-powered tools are used, the more they will learn and grow.

    Factual, informative, and educational content may be critical if AI prioritizes learning. The best advice for creating high-converting content may be to write from an expert point of view.

    Related: What Happens When Self-Driving Cars Crash? The Legal Ramifications of Automation

    As AI becomes increasingly integrated into the daily activities of marketing professionals, the narrative and scope of how to optimize content will surely change. Already, AI is being used to optimize content for search engines, moderate chats, create web pages, and even more.

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    Hank Stout

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  • Uncertainty On Protection For Some Attorney-Client Communications

    Uncertainty On Protection For Some Attorney-Client Communications

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    As a general matter, communications between attorneys and their clients are “privileged,” meaning they don’t have to be handed over to the other side in litigation relating to the matters covered in the communications. That process of combing through and handing over (or refusing to hand over) documents is called discovery. Wars over discovery often consume tremendous time and effort in the early stages of major litigation.

    The attorney-client privilege has been part of American law for centuries. It seeks to encourage clients to obtain legal advice as they go about their business.

    In the last few decades, as complex litigation has exploded and with it the importance of the discovery process, a huge body of law has developed on the scope and limitations of the attorney-client privilege. As one theme in that body of law, the courts have often said the privilege applies only to communications whose “primary purpose” is for the attorney to provide legal advice. On the other hand, communications that are merely about tax advice or business advice can’t benefit from the privilege.

    Many in the business and legal world believe the “primary purpose” test is too strict and jeopardizes the privacy of attorney-client communications that should remain private. Instead, those people favor a “significant purpose” test: as long as legal advice plays a significant role in the communication, it’s privileged.

    Federal courts had reached varying conclusions on these issues, perhaps applying varying tests. As a result, the United States Supreme Court agreed to hear a case that would have resolved these issues. The case, In re Grand Jury, involved an unnamed attorney who didn’t want to hand over information from his or her files for a grand jury investigation. According to federal law in the Ninth Circuit (California and some other western states), if a communication relates to legal matters but also business or tax matters, the court needs to evaluate all the purposes of the communication, and then protect it only if the legal purpose is at least as significant as any nonlegal purpose.

    In January 2023, the Supreme Court heard oral argument in the case, with a spirited discussion of what the law ought to be and whether existing law works adequately. Instead of deciding the case, though, the Supreme Court changed its mind about even hearing the case, and dismissed the order that had granted a Supreme Court hearing. That leaves the law where it was: somewhat muddled, but perhaps not so bad that the Supreme Court felt the need to do anything about it.

    The federal courts in some parts of the country will continue to apply the “primary purpose” test. Others will apply the “significant purpose” test. Or maybe the two tests aren’t all that different.

    In any case, attorneys and their clients should continue to watch out for “dual-purpose” business (or tax) and legal advice. If a communication contains both, one cannot assume it is protected just because it has some legal advice in it. Counsel may want to provide legal advice in communications that are separate from other forms of advice or communication. If counsel provides both types of advice in the same communication, even the legal advice should be written with an eye toward how it might look if it ever appeared in litigation.

    Also, clients often think that if they include an attorney as a recipient of any email, then the email automatically qualifies for the attorney-client privilege. Actually, that is not true at all.

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    Joshua Stein, Contributor

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  • 3 Legal Mistakes Avoid When Starting an Online Business

    3 Legal Mistakes Avoid When Starting an Online Business

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    If you’re thinking about starting a business, attorney Berkley Sweetapple wants to help you avoid making expensive legal mistakes. She sat down with Jessica Abo to discuss how she helps clients through her practice and legal template shop.

    Jessica Abo: Berkley, you are the founder of a legal template shop and of Berkley Sweetapple Law. Tell us a little bit about your business and your practice.

    Berkley Sweetapple:

    I have a legal template shop where I offer affordable, downloadable, fill-in-the-blank legal documents, like contracts and website policies, to creative entrepreneurs. I also have a law firm where I work one on one with online business owners. I mostly handle trademarks, contracts, copyright and website policies.

    All very important things. Did you always want to be a lawyer?

    When I was five, my dad, who was an attorney, told me that the only way I would be able to get the pot-belly pig that I wanted as a pet was to become a lawyer and fight the city that I lived in to change the local zoning ordinances.

    Did you get the pig?

    I did not get the pig, but I knew that I wanted to be a lawyer just like him so that one day I could grow up and fight for things like having pet pigs. I went to law school after college but never felt like the traditional law firm path was right for me. After I graduated from law school, I created a lifestyle blog as a side hobby and decided that I wanted to monetize the blog and create a business out of it. I joined online courses and ended up meeting other creative entrepreneurs who needed legal advice about the online business/blog space. I really enjoyed working with entrepreneurs who had online businesses and began to educate myself in that area of the law, while working full-time as a litigation attorney. Seven years after graduating from law school, I stopped practicing litigation to pursue my template shop and law firm full-time.

    Who are some of your clients and how do you help them?

    My clients are primarily coaches, online course creators, website designers, copywriters, graphic designers, and other online business owners. My favorite practice area is trademarks, which involves helping business owners secure the exclusive right to use their business name, slogan, or logo in their industry. Because trademark law is federal, I have clients with online businesses in all 50 states.

    You’ve been at this for a while. What would you say is the most expensive legal mistake you have seen someone make?

    The most common and expensive legal mistake I see business owners make is using a business name without first making sure it’s available first. If you’re starting a business, it’s important to make sure someone else hasn’t trademarked the name first, so that you don’t get a cease-and-desist letter from their attorney and are forced to rebrand. Changing a business name after you’ve launched, along with the branding, packaging, and web design that comes with the business name, can be frustrating and expensive. It’s also important to trademark as soon as possible so that no one does it before you. If you’ve been using the name and competitor trademarks first, litigation can get very expensive trying to enforce your rights.

    And that of course can be a total business nightmare. What are some of the legal boxes entrepreneurs should be checking?

    First, make sure your business name is available before you invest in any kind of branding or web design, or before you get too attached to the name. Hire an attorney to do a comprehensive trademark search. Make sure it’s available and trademark it. Second, have website policies. If you have any kind of website, like a blog or an e-commerce store, you need a couple of legal documents on your site. First, you should have terms of use, which is basically your contract with anyone who comes to your website or purchases from your website. A terms of use will contain necessary disclaimers, your refund policy, and intellectual property clauses. A privacy policy is legally required if you’re collecting any kind of consumer data. Finally, make sure you have contracts with your one-on-one clients as well as any independent contractors you hire.

    How do you make all of this less overwhelming for your clients?

    In my template shop, I try to make it as easy as possible. I’ve created contract templates tailored to different kinds of service providers, that can be downloaded and filled in within twenty minutes. For one-on-one work, I try to make the client experience as easy and efficient as possible. For example, for trademarking, I work on a flat fee model so that clients aren’t ever worried that costs will add up. I handle everything in the trademark process, from the application to Office Actions, so that clients don’t have to worry about the legal stuff and can focus on doing what they love.

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    Jessica Abo

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  • Babkes & Associates Shares Expert Insight on Negotiating With Prosecutors

    Babkes & Associates Shares Expert Insight on Negotiating With Prosecutors

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    South Florida Traffic-Related Offense Law Firm, with Nearly 40 Years of Experience, Advises on Legal Matters

    Press Release
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    updated: Aug 29, 2016


    PLANTATION, FL, August 17, 2016 (Newswire.com)
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    ​Babkes & Associates, a South Florida-based traffic violation law firm, offers expert advice on negotiating with prosecutors.

    “Prosecutors assume that the information provided by the police is true and accurate,” said James Babkes, Attorney and Partner of Babkes & Associates. “Simply claiming that the police are lying or misrepresenting the facts of the case will not in and of itself be sufficient. The question a prosecutor will ask is why would an officer who never had dealings with the defendant, who is trained and licensed by the state, falsely claim information concerning the defendant. Concrete evidence is required, such as eyewitnesses or videos that challenge the police version of an incident.”

    Prosecutors are aware of the complex maze of rules and regulations that apply in a criminal prosecution of a citizen and they expect the defendant to be as well. Defendants who represent themselves are held to the same standards as a licensed experienced lawyer. If there is in truth a legal challenge to the case against the defendant, it is incumbent upon the defense to know and present it to the court.

    Furthermore, judges and prosecutors will not openly say it, but it is perceived to be a sign of disrespect for a defendant who is unfamiliar with the legal intricacies to appear in court and simply announce that they are innocent.

    The law firm of Babkes & Associates expertly defends all traffic cases, including accident, criminal, D.U.I., and suspended licenses. In addition, they offer a “no points or your money back” guarantee.

    About Babkes & Associates

    Babkes & Associates was established in 1978, and is focused on Traffic Tickets and Traffic-Related Offenses. The law firm’s services range from assisting with Suspended Licenses, Traffic Criminal Tickets, Speeding Tickets, D.U.I, Misdemeanor/Felony, Reckless Driving, Accident Cases, and much more. With collectively over 100 years of experience in assisting clients to navigate through the complex legal system, Babkes & Associates Law Firm is fit to assist anyone throughout the South Florida area from: West Palm Beach, Palm Beach, Boynton Beach, Deerfield Beach, Fort Lauderdale, Miami, and surrounding cities. If you are in need of legal assistance regarding Criminal Charges, Traffic Tickets and Traffic Related Offenses, let the Babkes & Associates team be of assistance to you.  

    For more information, call (954) 452- 8630, or request a free consultation online and save 12 percent at http://www.babkeslaw.com/contact.php.

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    Source: Babkes & Associates

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