Cannabis

Overview

In a rapidly growing industry, nothing matters like experience.

Across the U.S., voters and legislators have enacted state laws that legalize the medical and recreational use of cannabis. For states, this provides a pathway to more effectively regulate what was previously an underground industry and creates a new source of tax revenue. For investors and business owners, this presents a rare opportunity to help build an industry from the ground up.

It is an era of significant change in this emerging industry, and with rapid growth and a host of unknowns come a number of legal concerns — not the least of which is the federal prohibition of marijuana possession, cultivation, and distribution. At times such as these, there is simply no substitute for experience. And when it comes to the cannabis industry, few law firms have a team with as much history and breadth as Honigman.

Advisors of choice to legislatures, municipalities and businesses.

The Honigman cannabis industry team is not an ad hoc group assembled to exploit this emerging opportunity. Rather, our attorneys have years of relevant experience. We offer full-spectrum, sophisticated, and coordinated counsel to participants across the cannabis industry.

Our attorneys have significant experience serving clients in the cannabis industry. As medical marijuana legislation was being developed, debated, and refined in the state legislature, members of our Government Relations and Regulatory practice group helped draft the Medical Marijuana Facilities Licensing Act, as well as a number of key amendments to the Michigan Medical Marijuana Act. We have served as ballot counsel to several ballot initiatives, including drafting an initiative for the recreational use of marijuana, and have worked with numerous cities, villages, and townships to draft and advocate for municipal ordinances related to cannabis.

For business owners and investors, we draw on our experience representing clients in other heavily regulated industries, such as financial services, liquor, insurance and gaming, to provide cannabis-related companies with guidance on state and local administrative and regulatory requirements. As industry thought leaders, we also meet frequently with interest groups, trade associations, and state and local legislative bodies to discuss cannabis-related issues and proposals.

Beyond regulatory guidance: full-service legal counsel to industry participants.

Government relations, legislative advocacy and regulatory compliance counsel are important services, but they are just a portion of what we offer. As a full-service law firm, we can — and have — advised cannabis-related enterprises on almost every major business issue they face. Among other areas, our multidisciplinary cannabis team offers sophisticated counsel in the following areas:

Entity Formation and Investment Guidance

Our Corporate department has a number of attorneys with extensive experience in entity formation, corporate governance, securities and finance, and business transactions. By marrying this general experience with particularized knowledge about the cannabis industry, our attorneys are able to assist cannabis-related clients in strategically structuring entities to minimize tax burdens and ensure compliance with relevant regulations. We also have wide-ranging experience working with investors in cannabis-related endeavors, including creating investment vehicles, conducting due diligence on transactions and drafting private placement memoranda.

Mergers and Acquisition

Attorneys in our Corporate department also have extensive experience handling a wide variety of corporate transactions representing clients in all aspects of the mergers and acquisition transaction lifecycle. We can provide a comprehensive array of services for all phases of a transaction from helping to select the deal team and due diligence through closing. Our clients value our ability to work pragmatically and cost effectively.

Labor and Employment

Employers in the cannabis industry face the typical slate of labor and employment issues — and then some. Attorneys from our Labor and Employment department help business owners and managers develop, implement, communicate, and enforce a full range of employment policies designed to ensure the privacy and safety of medical marijuana patients while remaining in full compliance with federal, state, and local employment laws.

Litigation

Business disputes are not inevitable, but they are always a possibility. Attorneys in our Litigation department represent clients in a full range of commercial and complex litigation, and regularly represent clients before regulatory agencies and administrative bodies.

Real Estate and Zoning Services

Honigman’s Real Estate department is nationally recognized for its skill and experience in real estate transactions. Our attorneys have assisted cannabis-related clients in complex purchase agreements, and, as local ordinances are enacted, are well equipped to assist with zoning issues, including obtaining approvals and variances, and challenging local regulations and decisions.

Taxation

Attorneys from our Tax department work with clients to ensure compliance with state and local tax laws, including timely reporting and payment of relevant taxes. We also advise clients on the implications of Section 280E of the U.S. Internal Revenue Code, which deals with business expenditures related to the sale of substances controlled by the federal Controlled Substances Act.

Trademark Protection

Honigman’s Intellectual Property department has extensive experience working with businesses to protect their names, logos and brands. Despite the lack of federal protections, a few states, including the State of Michigan, grant state trademark protection for marijuana-related goods. Our attorneys utilize their wide-ranging experience and knowledge to assist clients in registering and enforcing trademarks.

Representative Matters

  • Helped to draft and advocate for the passage of Public Act 512 and Public Act 514 of 2011, which amended the Michigan Medical Marihuana Act.
  • Helped to draft and advocate for the Medical Marihuana Facilities Licensing Act, 2016 Public Act 281, which created a licensing and regulatory framework for medical marijuana businesses in Michigan
  • Drafted and advocated for 2016 Public Act 283, which remedied the effect of a Michigan Court of Appeals case and allowed Michigan medical marijuana patients to lawfully possess and use marijuana-infused products
  • Helped to draft a ballot initiative for the recreational use of cannabis in Michigan
  • Served as ballot counsel to several ballot initiatives related to cannabis in Michigan
  • Provided government relations support on behalf of a seed-to-sale tracking company
  • Helped to draft and advocate for the passage of a number of municipal ordinances across Michigan
  • Advised a number of clients on marijuana-related administrative rulemaking
  • Assisted clients in forming business structures related to marijuana-related entities
  • Advised a client on the formation of marijuana-related private equity fund
  • Assisted numerous financial investor clients, including a New York based private equity client, in the structuring and execution of majority and minority equity positions in cannabis-related entities
  • Assisted clients with intellectual property matters related to cannabis-related entities
  • Advised clients on compliance with the Michigan Medical Marihuana Act