Legal Issues in Cannabis (2022 Update): Contracts, Real Estate, Taxation and NFTs

Rachael Z. Ardanuy, Esq.
Jonathan Bench
Frederic Rocafort
Arlo Kipfer
Robert B. Lamb
Jim Thorburn
Rachael Z. Ardanuy, Esq. | RZA Legal
Jonathan Bench | Harris Bricken
Frederic Rocafort | Harris Bricken
Arlo Kipfer | Harris Bricken
Robert B. Lamb | Harris Bricken
Jim Thorburn | Thorburn Law Group LLC

Live Video-Broadcast: May 27, 2022

Legal Issues in Cannabis (2022 Update): Contracts, Real Estate, Taxation and NFTs
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Program Summary

Session l – Cannabis Contracts - Rachael Z. Ardanuy, Esq.

The state-legal commercial cannabis industry continues to expand rapidly across the United States, even though marijuana remains a Schedule I drug under the federal Controlled Substances Act. With 18 states and 4 territories currently allowing adult-use cannabis cultivation, manufacturing, and sales, and 37 states and 4 territories currently allowing medical cannabis cultivation, manufacturing and sales, the burgeoning commercial cannabis industry needs professional and legal guidance. Cannabis industry participants are subject to significant regulations, and as a result, the contracts used in the cannabis industry must account for the various laws, regulations, and limitations that come with the fact that cannabis suffers a bifurcated legal nature among federal, state, and local law. As an industry that has been relegated to operating in the legal shadows for about 70 years, there can be an aversion from attorneys to assist with cannabis contracts, and an aversion by industry participants to document their cannabis transactions. However, as lawyers, we know that to protect our clients’ rights in the commercial context of providing products and services, solid contracts are necessary. This presentation focuses on the different types of contracts you will encounter when representing a cannabis business, as well as drafting tips and potential pitfalls for the cannabis-curious legal transaction practitioner

Key topics to be discussed:

  • Types of commercial cannabis contracts
  • Common contract clauses specific to the cannabis industry
  • Drafting tips
  • Potential pitfalls

Session ll - Cannabis NFT's, Web3 and Crossover - Jonathan Bench, Frederic Rocafort, Arlo Kipfer and Robert B. Lamb

Web3 law is an emerging practice area and an umbrella term that encompasses a variety of established legal practices. Fundamentally, anything that touches blockchain technology is a part of Web3 law. This includes (a) cryptocurrencies such as Bitcoin and Ethereum that fit into the larger “DeFi” (decentralized finance) movement; (b) NFTs (non-fungible tokens) and their derivatives; (c) DAOs (decentralized autonomous organizations); and (d) smart contracts.

Both technology and vocabulary in the Web3 space continue to proliferate, and jurisdictions around the world have only begun to decide how to grapple with Web3 concepts that impact many areas of law, both domestically and internationally: corporate formation and governance, finance, securities, employment, and intellectual property, as well as the crucial underpinnings of every legal transaction: contracts and dispute resolution.

In Part 2 of this series, attorneys will learn about DAOs in-depth: how they are formed, what domestic and international jurisdictions are doing to deal with their decentralized nature, and the securities implications of DAOs issuing various types of tokens to their DAO members

Key topics to be discussed:

  • Cryptocurrency
  • NFTs
  • DAOs
  • Smart contracts

Session lll - Cannabis Real state and taxation - Jim Thorburn

Since 1996, the states and the federal government have been in a dispute over the legalization of cannabis. Thirty-six states have legalized cannabis in some manner, while the federal government has been adamant it is federally illegal. The most effective weapon the federal government has utilized in the dispute is Section 280E of the Tax Code – denying all deductions and credits to state-legal cannabis businesses. This CLE will discuss how the IRS utilized Section 280E and the current defenses and successes which have been utilized.

Due to the federalism dispute, the use of real estate for cannabis business has numerous pitfalls. Find out how to safeguard against the most common dangers.

Key topics to be discussed:

  • The federalism dispute rages. Just because cannabis is state legal does not stop federal enforcement attempts
  • Costs of goods sold are constitutionally protected under the Sixteenth Amendment. There is numerous way to reduce tax liability using this constitutional protection.
  • Non-compliance with state law by a cannabis tenant may subject the landlord to federal drug violations
  • The landlord must consider remediation costs when renting to a cannabis tenant

This course is co-sponsored with myLawCLE.

Date / Time: May 27, 2022

  • 12:00 pm – 4:00 pm Eastern
  • 11:00 am – 3:00 pm Central
  • 10:00 am – 2:00 pm Mountain
  • 9:00 am – 1:00 pm Pacific

Choose a format:

Live Video Broadcast/Re-Broadcast: Watch the Program "live" in real-time, must sign in, and watch the program on the date and time set above. May ask questions during presentation via chat box. Qualifies for "live" CLE credit.

On-Demand Video: Access CLE 24/7 via the on-demand library and watch the program anytime. Qualifies for self-study CLE credit. On-demand versions are made available 5 business days after the original recording date and are viewable for up to one year.

Closed-captioning available

Speakers

Rachael Z. Ardanuy_myLawCLERachael Z. Ardanuy, Esq.| RZA Legal

Rachael Z. Ardanuy, Esq., is a Cannabis Business Attorney licensed in Colorado Florida, and New Jersey. In 2015, Rachael founded RZA Legal, a boutique law firm specializing in cannabis business law and estate planning, and has dedicated her career to advising, educating and advocating for entrepreneurs, business owners, investors, landlords and anyone else involved with the cannabis industry. Rachael has served as an expert witness involving Colorado’s commercial cannabis regulations and is a frequent presenter on legal cannabis topics such as avoiding pitfalls when entering the cannabis industry, considerations for buyers and sellers of cannabis businesses, the intersection and importance of business succession, estate planning and cannabis, and planning a successful exit strategy from the commercial cannabis industry. When she isn’t advising clients, Rachael enjoys playing with her young children, hiking with her husband, attending concerts with her friends and teaching dance fitness classes in her community.

 

Jonathan Bench_myLawCLEJonathan Bench | Harris Bricken

Jonathan Bench is chair of Harris Bricken’s corporate practice group, where he helps public and private companies with international and domestic business transactions. His clientele includes companies from Asia, Europe, Africa, and the Americas. Jonathan has worked and consulted in the U.S., Asia, and South America and is fluent in Chinese and Cantonese.

He regularly presents to business owners and organizations regarding international business transactions, particularly foreign direct investment and the emerging Web3 developments: decentralized autonomous organizations (DAOs), decentralized finance (defi), cryptocurrencies, non-fungible tokens (NFTs), and smart contracts.

Jonathan co-hosts Harris Bricken’s Global Law and Business podcast, which covers legal and economic business developments around the world. He is a regular contributor to the award-winning China Law Blog and the award-winning Canna Law Blog, where he shares his practical insights into doing business internationally and in the cannabis and other emerging industries.

 

Frederic Rocafor_myLawCLEFrederic Rocafort | Harris Bricken

Fred Rocafort chairs Harris Bricken’s international practice. He also advises companies doing business overseas on legal and regulatory matters, from company formation to import/export compliance. In particular, he helps businesses protect and monetize their intellectual property at home and abroad. In addition, Fred co-hosts Harris Bricken’s weekly Global Law and Business podcast, where he regularly interviews business and legal actors from around the world and is a regular contributor to the award-winning China Law Blog.

 

Arlo Kipfer_myLawCLEArlo Kipfer | Harris Bricken

Arlo advises clients on Web3, Latin America and China business issues. Arlo lived in China for almost two decades, guiding the development and compliance efforts for multinationals in Asia, and also in Europe and the Americas. In addition to his wide-ranging international practice, Arlo spends much of his time helping Web3 clients navigate the rapidly evolving legal frameworks and regulations surrounding emerging technologies and systems built on blockchains.

While in China, Arlo worked extensively with companies, international nonprofits and educational organizations. He is a strong negotiator in Mandarin and English, even in environments that strongly favor the “home team.” Having been immersed in Chinese law and culture for so long, Arlo is especially adept at helping foreign and Chinese businesses communicate with each other as clearly and effectively as possible.

 

Robert B. Lamb_Harris Bricken_myLawCLERobert B. Lamb | Harris Bricken

Robert is a corporate transactional attorney with a specific focus on international trade finance, joint venture structures, and cross-border and domestic M&A. Robert has represented clients on deals involving some of the best-known brands and innovative concepts and technologies in the world. Over the last twenty years he has traveled extensively, lived and practiced in remote corners of the globe, and represented clientele from Asia, Europe, the Americas, and the Middle East. Robert is fluent in Mandarin Chinese.

As a finance attorney, Robert has recently adapted to clients’ demands and needs in the Fintech and Blockchain space. He is quickly becoming an expert on all matters relating to Decentralized Finance, and lending his well established expertise in Offshore Formation and entity strategy to Blockchain investment. Already well versed, with deep expertise in Anti-Money Laundering (AML) Compliance, Know-Your-Customer (KYC), and Foreign (offshore) Regulatory Adaptation, Robert is applying these skill sets and knowledge base to the benefit our Decentralized Finance and Blockchain clients.

When he is not working, Robert enjoys travel, baseball, and literature. He has five children who are following their father’s passion for exotic travel and challenging new languages.

 

Jim Thorburn_myLawCLEJim Thorburn | Thorburn Law Group LLC

Jim Thorburn has been an attorney since 1991. He is a founding partner of Thorburn Law Group LLC located in the Denver Tech Center, Colorado.
Jim’s primary background is commercial litigation in both state and federal courts. Prior to entering the cannabis practice, his primary focus was litigation in the real estate and construction fields. Beginning in 2012, Jim began emphasizing cannabis tax controversy law, taking on some of the most notable cannabis tax controversy cases in the nation. This experience made Jim a formidable force in cannabis tax controversy.

Jim’s most recent success is obtaining a Statement Opinion from Justice Clarence Thomas in his advocacy of Standing Akimbo, LLC v. United States, 141 S. Ct. 2236, 2237 (2021)(Thomas, J.), Justice Thomas questions whether the federal government has exceeded its commerce clause powers by continuing to ban cannabis on a federal level. As msn.com noted: “ Legal experts were quick to take note of Thomas’ statement as a harbinger of the imminent demise of federal authority to regulate marijuana.” Jim was the lead litigating attorney for Alpenglow Botanicals v. United States, 894 F.3d 1187 (10th Cir. 2018) where the Tenth Circuit Court found that exclusion of costs of goods sold from income is constitutional right. Also, Jim had the honor of arguing the Feinberg v. Commissioner, 808 F.3d 813 (10th Cir. 2015) in front of now Justice Neil Gorsuch. The published decision has been described as a “technical loss but an artful win for the cannabis industry.”

Jim is on the forefront of the current federal and state issues affecting dispensaries and works hard to achieve successful outcomes for his clients. Jim works with state and national legislators to effect positive legislative change for the cannabis industry. He helps dispensaries, grow facilities, and other businesses navigate through complex federal legal issues including tax court and IRS audits. In addition to Section 280E issues, Jim also provides real estate, land use, construction law, and general business representation, and helps dispensaries comply with the regulations under state cannabis laws.

As a result of Jim’s national recognition, Jim speaks on marijuana legal issues across the country. Jim is a featured expert for the National Cannabis Industry Association. Jim has been featured in all the major networks, Forbes Magazine, INC. Magazine, MJ Biz Daily, HBO (Vice News), Denver Post, Law360, Yahoo Finance, National Law Journal, The Cannifornian, and others.

Jim received the coveted 2019 National Law Journal Cannabis Law Trailblazer Award.

Jim is also actively involved in motorsports and is the Past President of the Rocky Mountain Region Porsche Club of America. He is also a PCA trained high-performance driving instructor. PCA is a Porsche enthusiast club with over 120,000 members nationally, making it the largest single-marque car club in the world. Rocky Mountain Region PCA is the sixth largest PCA region in the United States with over 3200 members.

Agenda

Session l – Cannabis Contracts | 12:00 pm – 1:00 pm

I. Types of commercial cannabis contracts | 12:00 pm – 12:15 pm
II. Common contract clauses specific to the cannabis industry | 12:15 pm – 12:30 pm
III. Drafting tips | 12:30 pm – 12:45 pm
IV. Potential pitfalls | 12:45 pm – 1:00 pm

Break | 1:00 pm – 1:10 pm

Session ll – Cannabis NFT’S, Web3 and Crossover | 1:10 pm – 2:10 pm

V. DAO formation basics | 1:10 pm – 1:25 pm
VI. U.S. jurisdictional viewpoint on DAOs | 1:25 pm – 1:40 pm
VII. International jurisdictions welcoming DAOs | 1:40 pm – 1:55 pm
VIII. Securities ramifications of DAO token issuances | 1:55 pm – 2:10 pm

Break | 2:10 pm – 2:20 pm

Session lll – Cannabis Real state and taxation | 2:20 pm – 4:00 pm

IX. The federalism dispute rages. Just because cannabis is state legal does not stop federal enforcement attempts | 2:20 pm – 2:50 pm
X. Costs of goods sold is constitutionally protected under the Sixteenth Amendment. There are numerous ways to reduce tax liability using this constitutional protection. | 2:50 pm – 3:20 pm

Break | 3:20 pm – 3:30 pm

XI. Non-compliance of state law by a cannabis tenant may subject the landlord to federal drug violations | 3:30 pm – 3:45 pm
XII. Landlord must consider remediation costs when renting to a cannabis tenant | 3:45 pm – 4:00 pm