Cannabis Practices Grows As Big Law Firms Follow The Money
Large, notoriously risk-averse law firms are creating cannabis practice groups as a growing number of states legalize recreational and medicinal use, even though the drug remains largely banned under federal law.
Cannabis practitioners come from a variety of specialties, reflecting the range of issues their clients face. Lawyers need to be flexible in this rapidly evolving field, as voters and lawmakers act to advance – and sometimes fight – legalization.
“It’s not for the faint of heart,” said Eric Berlin, who co-leads the Dentons cannabis practice and helped develop and pass the medical cannabis laws in Illinois and the United States. ‘Ohio. “You have to face a level of uncertainty there.”
Cannabis companies need advice on intellectual property, employment, taxes, licensing and regulatory compliance, lending and financial transactions, mergers and acquisitions, and a host of other specialist practice areas. It creates rich veins for lawyers to tap into billable opportunities.
âThe law comes first. The expertise comes first and then you serve this industry with that. That’s what makes you a good advocate for the industry, knowing what you’re talking about and applying it to the nuances of the industry, âShabnam Malek said. The intellectual property attorney co-founded the Brand & Branch law firm in Oakland, California, and is the founding president of the International Cannabis Bar Association.
The legal vacuum has been a stumbling block for law firms.
Lawyers “aren’t really known for their high appetite for risk,” said Kathryn Ashton, a partner at Dentons in Chicago who started the firm’s 50-lawyer practice group.
This risk aversion is waning now that 19 states have passed laws allowing recreational and medicinal cannabis and 34 allow medical use. In addition to attractiveness, the global legal cannabis market is expected to reach $ 91.5 billion by 2028, according to Grand View Research.
The U.S. market is expected to grow 21 percent per year and will reach $ 41.5 billion by 2025, cannabis market research firm New Frontier Data said. Sales of medical cannabis in the United States are expected to reach $ 16.3 billion by 2025, and regulated sales for adults are expected to exceed $ 25.1 billion.
The growth potential led Akerman to launch his cannabis law firm seven years ago, said firm chairman Jonathan S. Robbins.
âIt’s a big company. It is a former firm, an AmLaw 100 firm, and a firm that has its roots in the South. This is important because when we started the practice in 2014 there was no cannabis law, âRobbins said.
It starts with a call
Denton’s Ashton is a financial attorney specializing in tax exempt organizations and healthcare. She came to the field in 2014 when a client applied for a medical cannabis license in Illinois.
Cannabis, like health care, was going to be a highly regulated market, an interesting practice, and would become a “huge American industry that grew state by state in the face of the federal ban,” said Ashton, who saw an opportunity “for Big Law to have a role because it is a multi-faceted industry”.
The burgeoning area of ââpractice is just one segment of the services that most cannabis lawyers in large firms provide to clients. Ashton continues to represent a wide range of clients in healthcare, retirement homes and banking, while Akerman’s Robbins advises brokers and other financial service providers.
Dentons has a dozen American lawyers who devote all or most of their time to issues related to cannabis. Ten other lawyers devote a lot of time to these matters and about 30 to 40 more are regularly involved. In total, around 100 U.S. Dentons attorneys have touched the space, Berlin said in an email.
âI’m a business lawyer, M&A, corporate transactional lawyer by profession,â said Joseph Bedwick, co-chair of the Cozen O’Connor’s Cannabis Industry Team in Philadelphia. Commercial cannabis customers “have the same needs as anyone, except that they are part of a regulated industry which happens to be federally illegal.”
For cannabis firm Fox Rothschild co-chairman William Bogot, the creation of the firm’s 70-lawyer firm came from the game. Bogot served as legal counsel and interim counsel to the Illinois Gaming Board for seven years.
âI didn’t fall into cannabis, it took me,â Bogot said. The state’s competitive bidding process for cannabis is “roughly modeled after the 10 Illinois casinos.”
âBoth are highly regulated and the two are totally different in every state. The only difference is that gambling is not illegal at the federal level, âBogot said.
Foley & Lardner associate James McKee, a commercial litigator, also “got a call out of the blue” in 2015 as Florida began licensing medical cannabis. This initiated the company’s foray into representing cannabis customers on regulatory and other matters.
âEven now, I would say 50-60% of my practice is probably in the work of regulating marijuana, even though I cut my teeth on constitutional issues,â McKee said.
The growth is visible in Foley, which from FY2019 to FY2020 saw a 63% increase in cannabis collections / revenue, company spokesperson Shannon Reith said.
Duane Morris has built his firm of 50 to 60 attorneys with attorneys “who regularly work on cannabis issues in their various areas of discipline, be it business, litigation, regulatory, intellectual property, tax, âand other lawyers supporting the core group, said partner Seth Goldberg.
âAnd we’re certainly looking forward to continuing to develop as the industry grows,â Goldberg said.
A lawyer by another name
The rapidly changing laws and regulations for legal cannabis demand that lawyers be quick.
In California alone, cannabis operators must navigate 18 agencies to obtain cultivation or manufacturing licenses, including state and local entities, said IrÃ¡n Hopkins, an Akerman real estate partner in Los Angeles.
âToday it is the most regulated industry in the world. Anyone who engages in cannabis doubles their homework, âsaid Hopkins.
Just as the legal industry was slow to venture into cannabis practices because lawyers said it was fear of offending other clients or doing business, lawyers slowly embraced the mantle of “cannabis advocate”.
âI have long resisted the label of cannabis lawyer,â said Joshua Ashby, a Fox Rothschild partner in Seattle who manages transactions for a variety of client startups. âIt turns out that everyone who practices cannabis is part of a start-up industry. “
âNew areas of law don’t arise every day,â and this puts young lawyers âon an equal footing with practitioners who have practiced for 20-25 years,â said Sativa Rasmussen of Dorsey & Whitney in Seattle. .
âOverall, the cannabis law creates this opportunity for young entrepreneurial lawyers to really carve out a niche for themselves,â said Rasmussen.
As cannabis-related practices develop, poaching of lawyers from firms that have already adopted cannabis is also increasing. The big companies that are now establishing the practices “are throwing a lot of money at these lawyers,” Ackerman’s Robbins said.
âAs soon as you see the end of the federal ban, every law firm will jump in with both feet,â Robbins said. “They’re all going to be practicing cannabis.”