The marijuana landscape can be synonymous with a free-spirited sense of fun, but when it comes to the legal world, marijuana is to be taken extremely seriously.
Peter Nemkov is a private practice attorney based in Denver with over 40 years of legal experience. He specializes in commercial transactions and has been working with ganjapreneurs since 2010.
Nemkov has seen several ganjapreneurs succeed in the industry, but he has also seen some nightmares unfold. Here are five legal tips for ganjapreneurs according to Nemkov:
1) Mind the terminology.
Slang and street names are no stranger to the world of marijuana. While saying “pot” and “bong” may pass at a party, using these terms in a legal setting will not suffice.
“This is a new market area and this is a new product, and they should treat it with respect. Using slang demeans the whole business,” Nemkov says.
Depending on the product, the plant itself should be referred to as “medical marijuana” or “recreational marijuana.” Smoking devices like a bong or pipe are all called “accessories.” A joint should be called a “marijuana cigarette” and dispensaries, “retail stores.”
Learning the correct terminology is a solid way for ganjapreneurs to demonstrate they take the product and the industry seriously.
2) Treat the marijuana industry like any other.
It may be a drug, but businesspeople should not treat marijuana differently than any other agricultural product. The industry is simply another facet of capitalism and should be taken very seriously.
“The organization and development of the marijuana industry is symbolic of entrepreneurial capital in the truest sense of the term,” Nemkov says.
He also stresses the importance of avoiding any kind of exposure to criminal elements like the drug cartels, illegal drug trafficking and money laundering. “Those elements are all illegal and they’re all very detrimental to the development of the marijuana industry,” he adds.
3) Know the federal legal requirements better than the alphabet.
The federal government is keeping a close watch on the marijuana industry, and the best defense against getting into trouble is a vast working knowledge of the law.
Ganjapreneurs “need to be very aware of all the legal requirements and have a strong compliance program, a lot more so than other industries,” Nemkov says. “There’s a lot more scrutiny and they should religiously follow the legal requirements.”
4) Keep finance a high priority.
When marijuana companies get in to trouble, it’s typically because they don’t account for or take their finances seriously enough. The marijuana industry is not something to haphazardly enter and treat casually.
“When they do that they’re doomed to failure and they need to view the marijuana industry like any other industry. They need to be very aware of basic business practices, especially the availability of capital and the need to manage and control their income and expenses,” Nemkov says.
Additionally, ganjapreneurs must be aware of not working with parties that have undisclosed financial interests. Nemkov has seen established businessmen face time in jail because they knowingly worked with the wrong people.
5) Be wary when choosing a lawyer.
Because the marijuana industry should be treated like any other, ganjapreneurs should find a lawyer the same way they would for any legal purposes. The most important considerations when choosing any lawyer are his or her experience, competency and reputation.
The marijuana industry is exploding and offers opportunities to many businesspeople. The most important things for ganjapreneurs to keep in mind are to treat it like any other professional industry and succinctly know the state and national laws.
Photo Credit: Mish Sukharev
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