Even in states where it’s legal, selling cannabis and related products is sticky business — sticky icky icky. By closely adhering to state and local laws and keeping a low profile, however, entrepreneurs can greatly reduce the risk of losing their livelihood (and freedom, in cases of imprisonment) to the federal government, according to Asheville attorney and author Rod Kight. He’ll discuss his new book, Cannabis Business Law: What You Need to Know, at Malaprop’s Bookstore and Café on Sunday, Sept. 13, at 3 p.m.
“Cannabis is illegal under federal law,” the marijuana proponent writes, weighing the book’s opening sentence down with reality. “Unless and until Congress changes the law, operating a cannabis business is a federal crime. Period.”
Still, hoards of dispensaries, grow operations, special bakeries and more are cropping up in cities that permit such activities. What recourse do these entities have from the threat of inconsistent laws? Preparation, it turns out.
Chapter by chapter, Kight delves into a list of pertinent considerations facing all current and prospective cannabis business owners: federal law concerns; leasing premises; banking, finance and other money issues; tax and accounting issues; employment issues; intellectual property and trade secrets; business structures; emerging issues; closing thoughts; and frequently asked questions.
Instead of serving as a complete guide to avoiding legal woes, the slim book introduces many areas of concern that merit further attention and that can potentially aid management in attracting as little attention as possible.
Locating the venture in a state that establishes and vigilantly enforces stringent regulations is, perhaps counterintuitively, the best tactic for preventing second glances from the feds, Kight says.
Leasing retail space is also a common challenge for prospective owners, because landlords are liable to have their property seized. For many real estate managers, a steep premium on rent doesn’t outweigh the sky-high risk. Accordingly, Kight educates readers on limiting factors to choosing a space — city bans, zoning ordinances, proximity to schools and residential areas, public sentiment — that vary geographically and, thus, must be evaluated on a property-by-property basis by the prospective tenant.
Throughout the work, the attorney plots how legalization has evolved and sometimes flip-flopped over time, but Kight’s citations of specific legislation are used sparingly and explained pithily. Sometimes his no-nonsense tone manifests as tough love.
“Tax issues can be boring and tedious,” Kight writes. “But understanding them is crucial to the survival of your cannabis business. So pay attention.”
An advocate for legalization of personal and medicinal use, Kight is actively involved with organizations like the National Organization for the Reform of Marijuana Laws and Women Grow. Cannabis Business Law, at the intersection of Kight’s personal and professional interests, represents one additional way to advance a movement he believes in.
“Although the cannabis industry grows at an unprecedented rate and the ‘green rush’ is discussed in major media outlets on a daily basis, the law lags behind,” reads a release from Kight’s team. “As a whole, the cannabis industry faces contradictory laws, unfair tax treatment, litanies of overlapping regulations, an inability to participate fully in some forms of federal intellectual property protections and limited access to banking services, among other hurdles. Joining the industry without a strong understanding of the law is risky at best.”