Today’s guest is James Rieger, partner at Tannenbaum Helpern Syracuse & Hirschtritt LLP. He’s also the Founder and Chair of its Cannabis Industry Practice Group. James has over 25 years of experience with a broad corporate and securities law practice with a focus on the cannabis industry. He is the current Chairman of the Mergers and Acquisitions Committee of the Business Law Section of the New York State Bar Association. He is also a contributor to Bloomberg Law’s cannabis page and is a frequent lecturer and author on cannabis-related matters. Listen in as James shares his views on the cannabis space and where it’s headed. There has been quite a bit discussed on this topic, and you’ll be interested to hear some of the legal hurdles that face this relatively new Industry.
You will want to hear this episode if you are interested in…
- Jame’s path to becoming partner at Tannenbaum Helpern Syracuse & Hirschtritt [2:25]
- 10,000-foot view of what’s going on in the industry and where it’s headed [6:27]
- Why is the cannabis industry such a controversial one from a legal perspective? [8:42]
- How does illegality affect banking operations in cannabis companies? [12:22]
- Where it industry is headed from a legislative standpoint [16:04]
- As an attorney, what’s James’ involvement with those in the cannabis space? [18:44]
- Are alcohol and tobacco industries working to snuff the cannabis industry? [21:26]
- Hurdles entrepreneurs and investors face getting into the cannabis industry [23:35]
- Changes coming that may impact the cannabis industry in a big way [30:01]
- What James did today that put him in the right mindset for success? [35:52]
An ever-changing fast-paced industry that’ll keep you on your toes
The cannabis industry is relatively new and growing quickly. The fact that cannabis is illegal on the federal level, but states are deemed illegal within their borders makes for an interesting legal conversation, which James is helping to shape. He is a key person in helping companies that are in or looking to join the industry and stay compliant while doing it.
James says he feels very blessed and lucky that he can play even a small part in this fascinating industry. It moves at lightning speed and the rules change all the time. What’s going on right now is a bit of a scramble for licenses and market share. Canada made cannabis use federally legal a couple of years ago but it was a slow rollout and companies that raced to go public have performed poorly, consistently missing earnings estimates. The excitement in the industry now is here in the United States.
Challenges for companies trying to build national cannabis brands
Companies called MSOs, multi-state operators, are working with licenses from multiple states. Those companies are in a race to scale and get licenses across many different states to gain a foothold and have operations in those states. Branding for better, or for worse, is not a big thing right now in cannabis because the rules don’t allow you to get a federal trademark that relates to marijuana. There are some brands on the west coast that have started to become known but it’s hard to bring those when you don’t have interstate commerce.
You’ve got markets across the United States where you’ve got to grow cannabis in that state, process it in that state, and sell it in that state. You can’t move it from state to state. That also makes it hard to establish national brands at this point.
Entrepreneurs trying to get into the cannabis industry
Entrepreneurs looking to get involved in the legal cannabis business face a lot of hurdles. They’ve got to have a robust licensing and regulatory team. First focusing on where they’re going to operate and what the rules are there. Taxes are a big challenge, this industry gets hammered with taxes. There is a tax code called 280E, which means that cannabis companies cannot deduct anything other than the cost of goods sold. With no write-offs, they’re paying big-time taxes. With the 280E there is a lot of opportunity for error leading to tax trouble so James tells people to stay away from LLC and go with C Corp structuring to protect themselves as an individual.
Connect with James Rieger
James Rieger is a partner at Tannenbaum Helpern Syracuse & Hirschtritt LLP, New York, NY, and the founder and Chair of its Cannabis Industry Practice Group. Tannenbaum Helpern is a 40-year-old general practice law firm centered on providing solutions to entrepreneurs, investors, and institutions. James has over 25 years of experience with a broad corporate and securities law practice, with a focus on the cannabis industry, and represents public and private companies, hedge funds, merchant banks, private equity funds, exchange-traded funds, venture capital funds, investment banks, underwriters, and private investors in many types of transactions, including public and private debt and equity offerings, credit facilities, mergers, acquisitions, fund formation, activist investments, restructurings and divestitures of assets and divisions.
James is the current Chairman of the Mergers and Acquisitions Committee of the Business Law Section of the New York State Bar Association. James is a contributor to Bloomberg Law’s cannabis page and is a frequent lecturer and author on cannabis-related matters.
Guests on the Mitlin Money Mindset Show are not affiliated with CWM, LLC, and opinions expressed herein may not be representative of CWM, LLC. CWM, LLC is not responsible for the guest’s content linked on this site.
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