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What If You're a GC for a Cannabusiness?

By William Vogeler, Esq. on August 08, 2017 | Last updated on March 21, 2019

Marijuana tourism; it sounds like a business idea that pot-smokers dreamt up at a party.

But this is serious business with the financial potential to attract attorneys with more than the munchies. In California, one company just bought an old ghost town.

It could be part of the marijuana boom or a bust in more ways than one. In any case, here's what you ought to consider if you become general counsel to a cannabusiness:

Federal Limitations

A restless lawman in the Old West, Wyatt Earp chased down lawbreakers from town to town. A one-time federal marshal, he is most famous for the Shootout at the O.K. Corral.

Federal officers today also have the ability to cross borders to enforce the law. And no matter how many states have legalized marijuana, it is still criminal under federal law.

More than a few "legal" marijuana businesses have been raided -- and their money seized -- by federal agents. As Dirty Harry said, "a man has to know his limitations."

Jurisdiction Specific

Once your cannabis client is clear on the federal law, it's a matter of complying with the applicable state law. California, for example, has approved marijuana for recreational use.

Marijuana has been legal for medicinal purposes in the state for a decade, but recreational use becomes legal in 2018. It will take a while for government agencies to roll out the new rules.

In the meantime, companies like American Green are testing the waters for marijuana tourism in Nipton. The good news for its general counsel is, the town will likely have very user-friendly laws.

Company Town

David Gwyther, president of American Green, said his company plans to sell CBD-infused bottled water, offer CBD mineral baths and otherwise turn the ghost town into a pot paradise.

"The cannabis revolution that's going on here in the U.S., has the power to completely revitalize communities in the same way gold did during the 19th century," he told Laist.

If the the ghost town does come back to life, it will be subject to other legal challenges as a company town. General counsel will have to deal with a wide range of laws -- from federal, state, municipal, corporate and the wild, wild rest.

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