Recent Federal grand jury subpoenas make it clear that the cannabis industry isn’t “out of the woods” quite yet when it comes to the enforcement of Federal law. Clients, therefore, need to fully understand the risk they take by entering the cannabis industry by virtue of “marijuana’s” scheduling under the Controlled Substances Act. While there’s no complete safeguard against Federal enforcement, here are some tips to protect your clients:

1) Ensure strict compliance with state and local law. This may sound like a given, but authorities aren’t only interested in blatant illegal activity such as selling across state lines–they have also taken interest in systematic and repetitive violations of state law in the not so distant past. It’s not enough to hand a SOP that you wrote to a client and hope for the best, either.  Be sure to follow up and actively monitor the implementation of any suggested operating procedures. 

2) Vet any new partner, vendor, or other third party your client considers doing business with. Outside third parties are an otherwise compliant operator’s Achilles heal. Perform extensive due diligence into the status of any third party’s corporate entity and license, as well as the entity’s overall reputation in the community. Remember: even if a third party is above board in the context of a contract with your client, that doesn’t mean your client’s name won’t be dragged through the mud if the third party operates illegally in it’s other dealings.  


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