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14 May 2020

In a Crisis, the Cannabis Industry Presents an Opportunity for Small and Midsize Firms

Early in 2020, the legalization of cannabis in a growing number of U.S. states was one of the hottest stories. The news cycle has certainly shifted since then, but the number of cannabis companies and entrepreneurs seeking legal guidance when it comes to creating their brands, marketing their products, and protecting their intellectual property in compliance with state laws continues to grow.

As many cannabis companies are small start-ups or entrepreneurs, small and midsize law firms have a unique opportunity to position themselves as an affordable, sensible option for cannabis companies to engage before major branding and marketing decisions are made. It’s not enough to pull in legal advice once trouble starts—the FDA and FTC have historically had little patience for cannabis companies who don’t follow the rules.

This is particularly true when it comes to making claims that a product treats any sort of ailment, whether that’s indicated in the product’s name, packaging or website copy. In other words, by the time a company realizes they’re out of line, it’s likely too late. Just last summer, the most valuable marijuana company in the U.S. found itself in hot water with the FDA over the marketing of its CBD products.

In the same vein, state regulations can vary on what kinds of marketing and advertising they allow cannabis companies to use. As laws change, cannabis companies will need to adapt, and having trusted legal counsel there to guide them through the process is essential. Similarly, social media’s cannabis marketing rules are a moving target, and cannabis ads on social media platforms (as well as Google™) are altogether banned by federal law.

Oh, and if you make a wrong move, the FDA can shut down your operation before you get a chance to say sorry. 

A Growing Opportunity?

While most law firms do not dabble in the cannabis industry, many do have ample experience in the corporate, real estate, employment and IP sectors—expertise that could easily be adapted to help cannabis companies. 

Dina Rollman is an attorney who started her cannabis practice in a two-lawyer firm. She now works as senior vice president of regulatory and government affairs at one of the largest cannabis companies in the U.S., Green Thumb Industries. Rollman said in an interview that just about every week, a fellow lawyer asks her for advice on how to get into the cannabis field.

The business of law can be unpredictable at times, and firms that typically rely on core practice areas as the “bread and butter” of their business may find themselves considering expanding into other areas of law to bolster revenue streams. Whether your firm is thriving or struggling, cannabis is an exploding industry that could prove fruitful down the road.

Adding Cannabis to Your Practice Mix

For firms considering expanding into the cannabis industry, they would be wise to stay up to date on the future of marijuana legalization in their state and surrounding states. Perhaps dip your toes into industry chatter by starting a cannabis law blog, or hosting cannabis-related webinars. However you decide to get the word out about your new offering, surround yourself with others who have already been successful in the industry so that you can look to them for guidance as you press forward.

Small and midsize firms are known for being nimble and efficient, a fact that remains true no matter how business is going. And for some firms, opening a cannabis practice may be just the profitable endeavor they’ve been looking for.