One of the first things you should do when starting out is find legal representation for your cannabis business.
If you see attorneys and lawyers as an expense, you need to shift your thinking. Consider the cost of getting hit with fines for improper documentation, or worse. Finding high quality legal representation can be the difference between your business sinking or floating. But, this is easier said than done.
Fortunately, we have been there, done that. Today, we are going to share our experience with legal representation, and explain why its a necessity.
Why your retail cannabis business needs legal representation from the start
We recommend having an attorney and accountant you can rely on from the start. Because cannabis is federally illegal, you cannot deduct much from your taxes. There are also intricacies in the paperwork you’ll likely overlook or be unaware of.
For example, according to IRS Code Section 280E, cannabis businesses are unable to deduct otherwise ordinary business expenses from gross income. This is because in the eyes of the IRS, income from a cannabis business is considered “trafficking”. Essentially, all you can deduct from your taxes is your cost of goods sold.
You really need legal representation right away so you can get started on the right foot, as opposed to trying to untangle the mess of your business down the road.
Hope for the best, prepare for the worst
Your attorney and lawyer can help keep you out of bad situations and make sure you are operating “by the book”. They can also come in handy should you ever get audited. This is important in any industry, but especially in the cannabis industry.
How to find legal representation for your cannabis business
If you are in a state new to legal cannabis, like most things, it will take some time for things to normalize. At first, you may have trouble finding good lawyers and accountants with experience in this industry.
Our advice is to seek out good attorneys and accountants in general first. Then, gauge their willingness to work with a business in the cannabis industry. Unfortunately, you may find that many are unwilling to help you out of fear. But, eventually, you’ll find the right legal representation for your cannabis business.
Our advice on legal representation for your cannabis business
If you are an entrepreneur, you likely prefer to be in control. Unfortunately, you are going to see that in this industry, that is not always possible.
It can be tough, but you need to check your ego at the curb. Go above and beyond when working with the government. Despite your feelings on government and business, you want to play nice. A good legal team can help you prepare the right documents, follow the right procedures, and stay on the government’s good side.
If you took one thing from this article, let it be this: find a good attorney and lawyer, and find them asap! This will help you sleep, and prevent unnecessary stress. Leave it to the experts.
What we have done for our business at Cannabis Central has worked incredibly. This is an area where things won’t vary much from state-to-state, since we are dealing with the federal government. If you want to learn more about how we went about this, reach out to me and I can help you do the same for your business.