Business Tax Cannabis Tax Advising Growing Like Weeds
Business Tax Cannabis Tax Advising Growing Like Weeds –
In the past, lawyers who represent criminals advised cannabis businesses. However, other lawyers are now realizing that advising in the area has evolved from a “compliance and regulatory role” to a more comprehensive need, counseling on intellectual property, corporate issues, contracts, transactions, tax matters, and employment issues, Rachel K. Gillette of Greenspoon Marder LLP said.
Gillette began advising the industry in 2010, when Colorado first licensed cannabis businesses. Fewer than five lawyers outside criminal tax were involved with the businesses then, and big firms didn’t want to represent them and have them as clients, Gillette said.
Over the last two years, several large law firms have developed cannabis business advising as a subspecialty, and some midsize firms may be joining in soon, according to Jordan S. Zoot of Abizinabox Inc., which provides tax advice to the California cannabis industry. Zoot also recommended that a cannabis business “go looking for a firm that has a good commercial practice” because a criminal lawyer would not be helpful with completing a business deal.
Professional associations of lawyers focusing on the legal marijuana industry are also seeing an increase in their ranks.
The National Cannabis Bar Association, founded in 2015 in San Francisco with about 10 attorneys, now has 350 members with “a large number that are at least peripherally aware of tax issues,” Executive Director Christopher J. Davis told Tax Analysts. He added that basic knowledge of section 280E “is pretty much a prerequisite to being an attorney in this industry.”
The Colorado Bar Association’s Cannabis Law Committee has seen its membership rise to 134 lawyers since its formation in early 2015.
And although the State Bar of California doesn’t have a similar group, it is considering and seeking public comment on rules of professional conduct for cannabis advising.