Cannabis Law Report Interview
Only 24 – 36 months ago cannabis business in the U.S was confined to a number states with semi-regulated medical markets being supplied by a few artisan vendors who were quietly trading medical marijuana products for a range of ailments on the back of hearsay and shared knowledge.
Fast forward to May 2017 and the progenitor states, Colorado, Washington, Oregon & Nevada amongst others, have developed and refined legislation to the point where the discussion is no longer, how do we do this? But rather, what can we do next to further raise our tax revenues and attract more inward investment for our state economy as well as think about exporting our newly gained knowledge and skill sets nationwide and internationally?
California, now reckoned to be the world’s sixth largest economy plans to have an integrated regulated market in place by Q.1 2018.
There are, according to procon.org, as of 20 April 2017, 29 states with a regulated medical marijuana market. Since then, recent legislation passing in a number of houses around the country have increased that number and more are on the way.
Canada will soon be a fully regulated market, the Germans have indicated their desire to do the same and Australia is tip toeing towards an imperfect but workable medical market.
Also in the pot are Israel, Ireland, Uruguay, Mexico, Costa Rica, Chile, The Cayman Islands, Bermuda.. the list goes on.
Even a British political party has , this week, mooted a fully regulated market in their upcoming general election. manifesto.
Throughout the US and Canada many SME law firms have already seen the opportunity and are growing apace. Recently at a small conference in Portland (OR) we counted 5 local law firms and all were indicating activity beyond their ability to manage the amount of clients needing advice.
Once upon a time, single state firms, such as Greenspoon Marder and the Hoban Law Group are now adding attorneys and offices, almost fortnightly, it seems. Yes, there is an element of gold rush fever and a push back from some in the political sphere, but it can’t be denied that there is a lot of space for growth in the legal sector of the industry both nationally in the US and internationally.
But where are the Am Law 100 firms, the Magic Circle ?
These are the firms with the networks and infrastructure at a local, national and international level, who have a plethora of practices and expertise to deal with this haphazard growth in an exciting new sector of the economy. They should be the practices ready to take on the challenge of research, ethics, compliance, business development, legislators and much more.
Until this point they have been nowhere to be seen.
That is, until we came across a firm who, as they say in Australia, were willing to take on the hard yards in order to create a strategy that would tackle the plethora of problems associated with developing a new practice in the cannabis sector; a sector which comes laden with many of its own peculiar challenges.
That firm is, Duane Morris based out of Philadelphia with 20 offices in the US and others in locations around the world including London, Hanoi, Shanghai & Singapore.
We learnt about the effort and energy put into building a cannabis practice at an established firm. A practice that was just a thought in 2014 and is now a fully operating national service only 3 years later.
We asked Goldberg what it was back in 2014 that created the eureka moment for making the big decision to explore building a cannabis practice?
Stats and projections was his reply, “20% of states already had some form of medical legislation, recreational use legislation was coming online in Colorado, Washington & Oregon and the projections for the industry in upcoming years was already indicated to be in the billions”
What both partners are particularly proud of is how they then decided to structure and build the nascent practice in order to create inclusivity for partners and attorneys from various disciplines within the firm and around the country.
The idea, and now an operating reality, was to build a truly national full service offering with a multi disciplinary approach so that as the cannabis sector evolved the firm could and would accommodate their existing clients as well as new ones looking for a law firm with depth and breadth in practice and advice.
Talking in terms of the Billboard charts, we asked, what would be your current leading areas of interest?
With a chuckle, this, CLR was told the following would be 2017’s top 5 pop picks
- Corporate / Private Equity / Capital Formation
- Intellectual Property
- Real Estate
- Healthcare & Life Sciences
And close on the heels of the top five is “Government” . Already active having shot up the charts over the last few months but just waiting for Washington to decide if a legislative remix can ever make it on stream.
Private Wealth inward investment into the US cannabis sector, says Goldberg, is leading the group’s current activities and not just state by state but investors are actively looking to transact across jurisdictions which is why clients see the value add in working with an established national practice with attorneys who are qualified in all states of the union as well as across a wide area of expertise.
Goldberg & Feldman indicated to CLR that it’s in the last six months that the market has really come alive with clients wanting to actively explore opportunities and those clients aren’t just confined within the US borders . Canadians, Australians and Israelis are currently heading the overseas pack looking for opportunities in the American market.
As an international firm, CLR asked if they saw any trends developing with money looking to move outside the US. In the main the answer is currently no but the Canadian market on the back of legislation going to Parliament is creating more interest within the US and international investment community.
What’s next we asked in terms of growth potential ?
Without pause, Goldberg asserted that M&A Licensing & IP would be the practice’s growth areas as the politics calms down and the sector matures, especially with respect to the medical side of the market.
Feldman also said to us that he wished to stress the importance of education both internally within the firm and externally out to investors. Both partners see it as absolutely imperative in a market still not fully regulated and understand that the creation of effective and ethical internal procedures combined with education and knowledge as the key to the practice’s success in an environment of disparate legislation, rules & regulations.
The firm, Feldman noted, had ensured that ethics always remains firmly at the top of the pyramid so that clients could feel confident in procedures across so many jurisdictions.
This is underpinned, he said, by a desire to lead in education and thought leadership about the cannabis sector to other sectors of the economy from real estate to finance, tech and beyond.
Understanding that the cannabis industry will in a number of years be spread throughout the US economy in one form or another it is imperative for the firm to be at the forefront of educational and information initiatives . This approach would provide clarity for clients and lawyers alike via the development of resources such as hosted events, regular industry alerts, blogging and content distribution via cannabis and wider media.
So, it appears Duane Morris have thrown down a challenge to their competitors . They’ve spent the time and energy needed to create a model using their existing expertise to bring many departments in the firm under one roof and create a practice based around ethics, experience & education and we’d suggest that others pay attention quickly if they don’t want to be caught floundering in the quicksands of an industry that many commentators believe is about to go through a growth spurt comparable to the tech sector at the beginning of the century.
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