Fox Rothschild is a US law firm with over a century of practicing law, and is now ranked in the Am Law 100. The national, full-service firm with 22 offices coast to coast provides services in more than 60 practice areas.
They write …Our clients are individuals and businesses — public and private companies — ranging from startups and family-run businesses to multinational corporations. We also represent nonprofits, charitable, medical and educational institutions in the United States and more than 50 countries worldwide.
Here we talk with partners, William Bogot and Joshua Horn about their developing national cannabis practice.
When did you first think about getting into the market?
We formally launched our Cannabis Practice Group in 2016, but there were attorneys at the firm, including Bill Bogot and Donna More in the Chicago office, who had been doing work in the space for several years. That’s really what spurred the firm into formalizing a distinct practice group. We recognized an opportunity to get in on the ground floor of a rapidly expanding area of the law. It was an entrepreneurial decision, which aligns with our firm’s business model.
What Were Your Original Thoughts For Focus
Timing was a major consideration. When we were developing our plan, Pennsylvania was saying it would allow medical marijuana, and the rules of professional conduct around the country were changing to allow lawyers to provide legal advice on the topic. The cannabis industry saw Pennsylvania as an attractive market for medical marijuana, and the state’s new law generated a lot of interest. We saw the opportunity to grow the practice in Pennsylvania and expand it nationally. We now have people in each of our 22 offices nationwide who touch on some aspect of the cannabis sector.
How long did it take to get the practice to a point you could take it out to clients and start pitching to prospective clients?
It probably took about a year after we formally launched the practice. We had already been doing some work in the cannabis space, but it took time to work on concepts and build our brand. Some of that involved preparing for concerns from existing clients with misgivings about their firm doing cannabis work, but those concerns never materialized. At a large firm such as Fox, with about 800 attorneys, job one was to put together a roster of all the attorneys who were already doing cannabis-related work and to develop a list of their marijuana-related matters. We quickly learned that we already had lawyers who were well-versed in and working on a wide variety of issues connected to cannabis. The issues were varied and touched a number of different practice areas: real estate and zoning, intellectual property, corporate and nonprofit law, banking, tax audits, the list was extensive. To set ourselves apart, we came up with an interactive survey of all the cannabis laws across the United States that we update on a weekly basis. That was one of the ways we formally rolled out the group and drew attention.
What are your main areas of focus?
Josh – At first it was pretty limited. I was helping a client with a securities offering and raising funds for their business, but it has grown into much more than that. Now I’m working on licensing applications, real estate issues, corporate issues and more. It really runs the gamut, and also allows me to get my colleagues involved. I’ll match clients up with intellectual property, or wherever there’s overlap between cannabis and other areas of the law.
Bill – I’ve had a similar experience. With my background in gaming law, and as a former state regulator, I initially got involved in Illinois assisting with cultivator and dispensary applications, and general regulatory matters. However, like Josh, my focus is now more varied, and I’m working with clients on the West Coast, East Coast and places in between, on a multitude of issues, often acting as a conduit to match clients with the right regional specialist.
How many practitioners within in the firm and practice areas are they working in?
There are close to 40 attorneys who are members of the practice group, and each is working in different departments such as corporate litigation, labor and employment, tax, real estate and others. The cannabis practice is represented in all of the firm’s major groups. Then there are subgroups within those areas such as securities on the corporate side. We’re represented in many of those as well. I find it interesting that the cannabis coverage spread to all areas of the law so quickly and significantly. There is a preconceived notion of what cannabis law is, but it’s actually a sophisticated and highly regulated business with sophisticated legal work being done.
Are you able to work in all states – if not can you give an idea where geographically you are doing most of your work?
As a practice group we are doing work from coast to coast. Right now, Bill and I are doing a lot of work in Pennsylvania, although clients are working with attorneys across the country on cannabis matters wherever they are based or the business interest exists. That includes our offices in Colorado, California, New York, Nevada, Illinois, the District of Colombia and Florida. It’s very important to have an attorney on the ground who understands an individual state’s rules of professional conduct and local regulations. For example, we recently had a group that joined Fox Rothschild in Seattle and I’d expect they’ll send clients that they may have referred out in the past, directly to us.
Are you dealing with private wealth clients in the main with regard to investment – company / grow compliance etc?
Yes, there is a lot of capital on the sidelines looking to be deployed in this industry, which many see as a potentially lucrative place to invest. We’re doing a lot of work with venture capital funds, accredited investors, public companies, consultants and more. Whether it’s the medical marijuana side or recreational usage, they’re showing investment interest wherever they think offers the best opportunity to make money.
Where do you see growth moving forward?
I think it’s going to be exponential. The investment research team at the financial services firm Cowen and Company, for example, predicted that in the next decade this is going to be a $50 billion global business. The prediction for the U.S. in 2017 is $17 billion. So, I just see this moving forward and, like any rapidly growing industry, it will require sophisticated legal services.
Are you looking outside the US – Canada?
I’m not aware of anyone in our firm working on cannabis matters in Canada. We are working with a client in the Netherlands who is developing a business there and hoping to bring it to the United States at some point. We have another client we are assisting with a matter in Latin America.
Where do you see your skill base lie in comparison to other firms?
We’re among the best in terms of depth and sophistication, which means we can handle all of our clients’ needs in house. We’re doing cannabis-related work in so many different areas; real estate and real estate finance, publicly traded companies, banking, tax law, the list goes on. We have an attorney in our Denver office who has 50 percent of her practice dedicated just to IRS audits for cannabis companies because it’s a cash business; about half her practice. We have a pre-eminent banking lawyer handling banking concerns in the cannabis space. Our venture capital lawyers are putting together funds and deploying capital. There are a growing number of firms in the space, but we can do everything and not have to refer work out. That’s a real benefit to our clients. Remember, our firm has one of the largest and most established gaming practices in the country, so we were already ahead of the curve with AML and FinCen compliance, licensing and regulatory compliance and zoning issues for what some may perceive as a “regulated sin.” We have people here who have either the direct experience or the necessary skillset for the industry.
Education, Knowledge, tech etc. – does the practice, firm have a philosophy there to help train internally and educate the clients and the markets across disparate jurisdictions
Clearly, every state is its own separate world when it comes to laws and regulations. One of our best tools to keep clients and attorneys up to date is the interactive National Survey on Marijuana Laws and Regulations, which we update each week for every state in which some form of cannabis is legal. The survey lists the state law, applicable regulations, names of licensees and their successful applications so people can see what is working for others. We also have an extremely active blog on cannabis topics—In The Weeds—which allows us to get cannabis news, and Fox attorneys’ names, out into the public domain.
We’ve gotten a lot of interest from existing Fox clients who contact their attorneys to tell them they want to get into the space. That’s when we reach out them about our practice, to educate them about our capabilities and discuss the specific issues they are facing from a federal and state standpoint. Getting into the cannabis business is complicated. It can be highly technical and very involved.
Anecdotally, in Pennsylvania some license applications can be 300 pages long, even longer in other states. Often people are surprised to see how closely the industry is regulated, and how much information they will have to disclose about themselves and their business partners. In many regards, it is even more regulated than gaming, so for our gaming practitioners there is generally little learning curve. Still, part of the education process is making sure people are comfortable with the level of scrutiny because you really have to put a lot of information out there when putting together an application.
Any other knowledge information you’d like to impart about the practice, practitioners
I think the big message in regard to the firm’s cannabis practice is that the small but rapidly growing field of cannabis law really lines up with Fox Rothschild’s entrepreneurial spirit and vision. We like to get in on the ground floor of a burgeoning area and put the right resources behind the effort to become a leader in the field. You can really see that in the commitment and knowledge of our practitioners across every facet of the cannabis space.