5 Reasons to Hire an Attorney for Your Cannabis Business

Starting a cannabis business isn’t easy. With complex and often conflicting federal and state regulations on the manufacturing, sale, and distribution of cannabis, cannabis entrepreneurs have many unique factors to consider when starting their own businesses

One crucial component to a successful cannabis business is an attorney experienced with the legislation, risks, and trends in the cannabis industry. An experienced cannabis attorney can assist in ensuring your business is adhering to complex state cannabis regulations and can advise on risk mitigation strategies. Read below to dive deep into our comprehensive list of why an attorney is essential to every cannabis business. 

1: Follow Legal Regulations

As the cannabis industry remains subject to various, and often conflicting, state and federal laws, it can be difficult for operators to navigate regulatory compliance issues. A cannabis business lawyer can assist with understanding federal and state regulations and help business owners limit legal risks. 

Cannabis companies can generally be classified into the following four categories:


Cultivation involves growing cannabis plants. Because of its need for energy and climate control systems, cultivation is a significant investment for business owners. In addition, this form of business is heavily regulated to ensure safe and effective products. 


Extraction involves various methods for the processing and extraction of individual cannabinoids from cannabis.


Cannabis companies that manufacture or infuse products with cannabis-derived materials, often for medicinal purposes. Regulating these cannabis businesses involves strict compliance with state production and labeling laws, including monitoring ingredients, nutrition labels, and consumption guidelines.


Retail cannabis businesses typically come in the form of recreational and medicinal dispensaries. These types of businesses are heavily regulated by state laws and can face many obstacles in financing and licensing.

2: Know Licensing Requirements 

There is no federal policy legalizing the opening and operating of cannabis companies. However, certain states permit cannabis businesses under strict licensing guidelines. Many states limit the number of cannabis business licenses issued in the area, resulting in short application windows, vast competition, expensive application fees, and more. 

An expert cannabis attorney can help prospective business owners comply with their state’s specific application, financing, and licensing requirements. As a result, business owners can better understand the required steps of operating a cannabis company and streamline their business opening.

3: Review Contracts; IP Protection

An experienced cannabis attorney is crucial for commercial contract and trademark review and intellectual property protection. From employee agreements to purchase agreements, cannabis business lawyers can review important contracts to protect your business from various damages and fines. Cannabis contracts have special considerations that you typically do not find in other industries.

A business attorney can also protect your business from intellectual property infringement. These professionals can guide you through the different types of intellectual property and help you decide which protection is most effective for your business.

4: Limit Business Risks

Hiring a cannabis business attorney could save your business from criminal charges, license suspension, lawsuits, and more. Marijuana is federally classified as a type I controlled substance, and therefore any company associated with the substance is at risk of potential prosecution. The cannabis industry is often a frequent target of lawsuits, particularly for labeling issues.

A qualified cannabis attorney can assist in ensuring your business adheres to state regulations to avoid license suspension or fines. In addition, your business attorney may also alert you to changes in cannabis policies so that your business can adapt accordingly.

5: Set a Strong Foundation

Regardless of the industry, laying a solid foundation for your business is essential for long-term success. For cannabis business owners, it is especially crucial to be cautious when laying your foundation. You must be aware of the legalities of your business operations and structure your business based on your state’s requirements. 

A seasoned cannabis attorney will ensure you start your business on the right foot. Before diving headfirst into the cannabis industry, prospective business owners should consult with their attorneys to establish their business structure. 

Entrepreneurs in the cannabis community should recognize the importance of hiring a cannabis attorney for their business. By partnering with trusted cannabis attorneys like Chelse Spencer, clients gain the counsel necessary to thrive in the hemp, CBD, and cannabis industries. Contact Ritter Spencer Cheng or give us a call at 214.295.5070 for more information.