With the number of states that have recently approved initiatives for legalized recreational use of marijuana, and the laws passed in other states permitting the medical/medicinal use of marijuana, producers and retailers of marijuana are quickly growing. Accounting professionals and CPAs serving marijuana businesses are tasked with navigating the often ambiguous and sometimes contrarian state and federal legal information that affect this, albeit growing, niche.
In light of the ease of forming a corporation or limited liability company (“LLC”) in Colorado, most cannabis entrepreneurs elect to conduct their business via a corporation or LLC. Another option is to form a partnership. In practice relatively few cannabis businesses or organized as partnerships due to the potential for enhanced liability of a general partner.
Additional considerations for clients, who are encouraged to work closely with attorneys and accountants when incorporating, include the importance of following corporate formalities, organizational document drafting (and potential pitfalls), raising capital, avoidance of undisclosed ownership interests, consequences of violations, IRS Code Section 280E and income tax deductions, etc.
Garrett Graff is an Associate at Hoban Law Group, where he practices corporate and transactional law, real estate law, regulatory/compliance law and civil and commercial litigation. Though born and raised in Lakewood, Colorado, Garrett graduated from the Thomas R. Kline School of Law at Drexel University in Philadelphia, Pennsylvania, earning his J.D. cum laude in May 2014, and graduating from the law school’s Business and Entrepreneurial Law concentration with honors. Garrett received a B.S. in Business Administration, as well as an International Business certificate, from the University of Colorado-Boulder’s Leeds School of Business in May 2011. Prior to graduating law school, Garrett gained valuable experience as a law clerk with Hoban Law Group, and practicing insurance defense in Philadelphia and as a judicial law clerk for the Honorable David L. Shakes in the Fourth Judicial District in Colorado Springs, Colorado. Garrett also has extensive experience in real estate and property issues, given several years working with a real estate brokerage and property management firm. During law school, Garrett served as an Associate Editor of the Drexel Law Review, was selected to compete with Drexel’s Transactional Lawyering Team in a national transactional lawyering and negotiation competition in February 2013, and served in leadership capacities in multiple student organizations.
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