Structuring Enforceable Contracts in the Cannabis Industry


CLE credits earned: 2 GENERAL (or 2 LAW & LEGAL for WA state)

We will examine contractual enforcement issues presented by the conflict between the legalized use of marijuana in many states and its treatment as a controlled substance under federal law, and guide counsel through structuring contracts with marijuana-related businesses (MRBs). Unique considerations and legal risks facing MRBs and their partners, identifying specific techniques counsel should consider when entering into marijuana-related contracts, and providing hard-earned insights for drafting contractual terms that lead to high-yield, low-risk cannabis business arrangements.

Key topics to be discussed:

•   What are the risks of entering into a contract in the cannabis industry?
•   What are the practical implications of federal and state law conflicts?
•   What are the primary marijuana-related contract enforceability issues?
•   What are the specific techniques counsel should employ when drafting arbitration clauses for cannabis businesses?

Date / Time: June 28, 2019

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

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•   Live Video Broadcast/Re-Broadcast: Watch Program “live” in real-time, must sign-in and watch program on date and time set above. May ask questions during presentation via chat box. Qualifies for “live” CLE credit.
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Original Broadcast Date: April 29, 2019

Katy M. Young, Esq.
Partner – Ad Astra Law Group

Katy represents both plaintiffs and defendants in business disputes and real estate claims, including matters for cannabis industry litigants. For cannabis businesses, she handles mostly partnership disputes and breach of contract matters, including leases. She graduated from University of the Pacific cum laude where she played water polo on scholarship and then she received her law degree from University of San Francisco where she graduated magna cum laude. She has been named a Northern California Super Lawyer Rising Star for 2014 through 2019. In 2018, she was named to Benchmark Litigation’s top 40 under 40 list. She also the President of the National Cannabis Bar Association.

Kathryn McCall, Esq. focuses on helping early stage and mature companies, as well as family-owned and life-style businesses, succeed. Her clients appreciate her pragmatic and strategic advice regarding their entity formation, business financing, and operational concerns. As outside general counsel for many of her clients, Ms. McCall advises businesses on a wide variety of corporate and other legal matters. In addition, she has extensive experience counseling businesses in all aspects of the business life cycle from the initial structuring and formation of the business to financing that business; hiring employees; corporate governance; day-to-day operations; negotiating licensing and other commercial agreements; equity incentive plans; and liquidity events. She advises corporations, boards of directors, investors, CEOs and CFOs, and business owners on a wide range of corporate and securities transactions, including mergers and acquisitions, securities offerings, venture capital, joint ventures, and corporate finance. She has worked with clients in a variety of industries, including: media; technology; internet of things; education; internet-based products, services, and applications; consumer products; retail; publishing; and health and fitness.

Ms. McCall also assists businesses in the cannabis industry develop the necessary infrastructure and organization to succeed while remaining in compliance with the complex legal and regulatory framework burdening the industry. Working with other members of the firm’s well-rounded cannabis industry team enables her to create a strategic and coordinated approach to not only business structuring, organizational, and regulatory matters but also intellectual property, tax, estate planning, and business and criminal litigation issues.

Ms. McCall is a mentor at Draper University advising budding entrepreneurs regarding the legal aspects of starting and running a business. She also speaks regularly at Draper University on legal issues facing startups.

Prior to joining Sideman & Bancroft LLP, Ms. McCall was Of Counsel with Carr & Ferrell LLP in Menlo Park, California.

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Section I. Risks of entering into a contract in the cannabis industry

Section II. Federal law enforcement policies and state law conflicts

Section III. Cannabis-related contract enforceability issues

Section IV. Recent judicial decisions

Section V. Specific techniques counsel should consider when drafting arbitration clauses for cannabis businesses
a) Preliminary statement
b) Express acknowledgment of marijuana illegality
c) Subject matter description and contract invalidation
d) Choice-of-law, venue and conflict-of-law provisions
e) Severability terms
f) Independent consideration
g) Remedies
h) Arbitration and mediation clauses
i) Best practices for different types of cannabis-related contracts

Section VI. Additional legal considerations for counsel representing marijuana businesses