Last week, our inaugural cannabis conference took place at the Hilton Boston-Dedham hotel, and we are pleased to report that, by virtually every measure, the day was a tremendous success. This being the first conference ever put on by our group, we knew from the beginning that we were venturing into uncharted waters. But with the help of co-host Viridian Capital Advisors and our exhibitors, sponsors, and panelists, the entire affair ran smoothly and proved memorable, insightful, and enjoyable for all involved. In total, 152 investors, operators, and entrepreneurs were in attendance, and the feedback we’ve received has all been highly positive.
Over the coming weeks, we intend to recap each of the day’s panels, with insight provided by a member of Burns & Levinson’s Cannabis Business Advisory Group.
In the interim, though, we wish to extend our sincerest thanks to everyone who took part in bringing this watershed moment for our firm to fruition. We look forward to furthering the dialogue surrounding cannabis, both regionally and nationally, and are excited about all of the possibilities that next year’s conference holds.
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On July 28, 2017, Governor Baker signed into law H. 3818, “An Act to Ensure Safe Access to Marijuana,” which was passed by state legislators to update state laws governing the cultivation, sale, and use of marijuana, following voter approval in 2016. The Act was characterized as an emergency law and declared “necessary for the immediate preservation of the public convenience,” and the majority of its provisions pertain to the establishment of a five-member Cannabis Control Commission, the purpose and duties of which are relative to the regulation of the recreational and medical marijuana industries in the Commonwealth. The law additionally calls for the creation of a 25-member Cannabis Advisory Board, consisting of members chosen for their expertise and knowledge relative to the Board’s mission.
In addition to the establishment of the Commission and the Board, the Act:
– Permits a municipality to establish zoning by-laws or ordinances, which allow commercial marijuana growing and cultivation on land used for commercial agriculture, aquaculture, floriculture, or horticulture;
– Permits a city or town to impose a local sales tax upon the sale or transfer of marijuana or marijuana products by a retailer operating within the city or town to anyone other … Keep reading
As banks are learning to navigate the murky legal waters inherent to cannabis-related businesses, they are increasingly becoming open to housing cannabis-related business accounts, even with the substantial burden placed on them by the federal government to comply with their respective state laws.
In August 2013, then-Attorney General James M. Cole issued a memorandum to all U.S. attorneys, which was published by the Department of Justice, setting expectations for the federal government, state governments, and law enforcement on how to address state-implemented, legal-adult-use cannabis programs. In summary, the Cole Memo told states that, if they implement a strict regulatory framework; prevent diversion by employing a seed-to-sale tracking system to monitor the growth, distribution, and sale of regulated cannabis; and create a transparent, accountable market, the federal government will, essentially, leave them alone.
Almost six months later, Attorney General Cole issued further guidance as to how the original memo would impact certain cannabis-related financial crimes. He stated that the provisions of money-laundering statutes, the unlicensed money-remitter statute, and the Bank Secrecy Act remain in effect with respect to marijuana-related conduct, and that Section 1956 of Title 18, otherwise known as the federal anti-money laundering statute, makes it a criminal offense … Keep reading
One commonality for businesses across all industries, including those in the medical and adult-use recreational marijuana space (“cannabis companies”), is the importance of access to capital. Everyone knows that running a company requires a significant amount of money. However, cannabis companies specifically face distinct hurdles to raising capital, especially when it comes to deciding whether to go public.
The process of a private company offering and selling stock to the public typically begins with an initial public offering, which can trigger large payouts for management and ownership; a certain elevated level of credibility; and, most importantly, increased access to capital, which can better situate a company for both short- and long-term growth. For many entrepreneurs, taking a company public may be the ultimate accomplishment. However, despite the pros, there can also be plenty of cons for companies undergoing an IPO, especially those in the cannabis industry.
In general, taking a company public not only results in increased costs and more comprehensive (and burdensome) disclosure requirements, but also a much more aggressive and scrutinized focus on short-term growth for shareholders, which can limit the flexibility and freedom to which management may be accustomed. For cannabis companies, perhaps the biggest challenge … Keep reading