What is Cannabis Law?

The expanding state legalization of medical and recreational cannabis throughout the United States has led to the emergence of a new field of law- cannabis law. While a great deal of cannabis law focuses on the interpretation of and compliance with state regulations regarding recreational and medical cannabis as well as the dichotomy between prohibitive criminal use- both state and federal- and state permissible use, cannabis law encompasses so much more. Cannabis law is an amalgamation of business and corporate law, intellectual property, real estate, tax, criminal, regulatory and other practice areas.


Clearly criminal law comes into play where one operates a cannabis business where cannabis is illegal, but even where cannabis is legal, one can be subject to criminal liability if he or she fails to adhere to the applicable regulations. While both recreational and medical cannabis is legal in California (with the state currently in the legislative process to define and implement the specific regulatory framework for both), there are still a number of states that do not have either form legalized. Furthermore, marijuana is still considered a Schedule I drug by the federal government.


Accordingly, proper interpretation and compliance with applicable business regulations and underlying policies is critical in mitigating potential criminal liability. Looking at California for example, with the passage of medical and recreational cannabis laws, the entire industry will be turned upside down from a seemingly unregulated market to a comprehensive legislative licensing and enforcement framework regulating everything from cultivation, manufacturing, certification and labeling to management, investment, retail and distribution.


Thus, today, criminal law is arguably a small piece of the overall cannabis law universe. General business and corporate law can be found in virtually all aspects of cannabis law including without limitation business entity selection and formation, joint ventures, partnership / shareholder agreements, employment and contractor agreements, licensing and so forth. Capable attorneys must be experienced in these areas from both a transactional and litigation context.


Real estate law also factors prominently into cannabis law. Anyone wanting to operate a cannabis business, for instance, operator of a dispensary or cannabis cultivator, will need to purchase or lease commercial space to conduct business. Owners looking to lease space to cannabis tenants will also need to be aware of and ensure compliance with applicable laws. Such real estate is subject to regulations and zoning requirements, which can vary significantly by jurisdiction; therefore, it is crucial to have an attorney review matters in such situations.


Intellectual property law also plays a heavy role in the cannabis law world. For example, someone who has a line of cannabis products might want to trademark their brand to protect it from potential infringers. Also, licensing arrangements and business consultancy agreements are frequently utilized in the cannabis industry to protect intellectual property.


As one can see, cannabis law touches a variety of different existing areas of law. The framework of cannabis law can be challenging and is always changing. In this constantly evolving field of law, it is important to have a seasoned attorney guide you.


KHS assists clients in many aspects of the cannabis industry including without limitation business entity selection, formation and licensing; corporate offerings; joint ventures; intellectual property protection, enforcement and licensing; and real estate consultation. The firm also provides comprehensive litigation services ranging from breach of contract, trademark and trade secret infringement, unfair business practices and more. KHS also has established relationships with affiliate firms with greater expertise on criminal and tax matters.