Major law firms are ramping up efforts to win cannabis clients as they stake claims to an industry that could be worth $85 billion

Major law firms are ramping up efforts to win cannabis clients as they stake claims to an industry that could be worth $85 billion
cannabis suit vc

Samantha Lee/Business insider


Big law firms are ramping up their efforts to win cannabis clients.

  • Law firm giants have eyed the cannabis industry for a long time, but big names like Dorsey & Whitney and Dentons are becoming more and more vocal about their involvement.
  • In the US, the federal government hasn't cracked down on cannabis companies that comply with state laws, creating more clarity for firms, Christian Sederberg, co-founder of Vicente Sederberg, a national cannabis law firm, told Business Insider. Cannabis is federally illegal in the US.
  • Cannabis law ranges from real estate and zoning to intellectual property matters, lawyers told Business Insider.
  • Cannabis giants are seeking out big law firms that are equipped to handle the complex needs of big cannabis businesses. Law firms, in turn, are eyeing the industry as it continues to grow to a projected $85 billion by 2030, up from $56 billion now.
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Law firm giants have had cannabis clients for years now- but you wouldn't have known it until recently.

As the cannabis industry has ballooned into a $56 billion market, and startups have gone public and expanded into multiple states, they've found that they have complex legal questions that range from real estate to intellectual property to business law to zoning.

Enter law-firm giants like Reed Smith, Locke Lord, and Dorsey & Whitney, which have all formed industry teams to take on cannabis clients. Plus, boutiques like Vicente Sederberg are popping up, focused entirely on serving cannabis firms.


"The industry is expanding so rapidly that there is a need for a lot of competent lawyers to get involved," Christian Sederberg, co-founder of Vicente Sederberg, said.

The firms are aiming to win business by focusing on an industry that's projected to grow to $85 billion in the US, according to research from the investment bank Cowen.

Marc Hauser, co-vice chair of Reed Smith's cannabis law team, runs an industry-focused newsletter called "Cannabis Musings." International law firm Harris Bricken has had its "Canna Law Blog" since 2012. Locke Lord runs both a blog and a podcast about the industry.

Law firms weren't always vocal about their cannabis clients

But this wasn't always the case. The lack of clarity surrounding federal versus state regulations in the sector has previously kept law firms from being too open about their involvement in the cannabis sector.

Lawyers also aren't allowed to help clients who are doing something illegal, creating a grey area for attorneys working in cannabis, according to the American Bar Association. The ABA has called for Congress to clarify the situation so that lawyers don't get in trouble.


"We want the federal government, Congress, in particular, to step up and say, 'Look in states where it's legal, attorneys assisting in those businesses are not guilty of committing a federal crime," Michael W. Drumke, chair of ABA's TIPS Cannabis Committee and partner at Swanson, Martin & Bell, told Business Insider.

Hilary Bricken of Harris Bricken said that at the start of the cannabis boom, she saw a lot of criminal defense attorneys representing medical cannabis companies because corporate firms were reluctant to get involved.

When her firm decided to enter the space it was seen as "shocking at the time," said Bricken, one of the firm's key cannabis attorneys.

'Everyone else was a criminal defense attorney'

"Everyone else was a criminal defense attorney giving criminal advice," she added.

Bricken graduated from law school around the time the cannabis industry was beginning to emerge and told Business Insider that because she was "30 seconds out of law school," she had nothing to lose.


"I just dove right in with reckless abandon," she said. "Had I been an older attorney or a more conservative lawyer, I probably would never have gotten into this ever."

Michael Weiner, co-chair of Dorsey & Whitney's cannabis practice, told Business Insider that his firm got involved shortly after Colorado legalized adult-use cannabis in 2012.

At that point, the firm was "relatively silent" about its participation. But as time passed and the Canadian stock market opened up to both US and Canadian cannabis companies, the firm slowly began to make its ties to the sector more visible.

Thanks to its focus on the oil and gas industry, Dorsey & Whitney already had a lot of experience with cross-border securities offerings. The company has used that expertise as it focuses in on the cannabis industry, Weiner said.

Kathryn B. Ashton, co-chair of Dentons' cannabis group, said that while Dentons started taking on cannabis clients around six years ago, it is only "year over year as the firm got more comfortable with the practice and clients were getting bigger" that the firm became vocal about its work.


The firm currently estimates that it has around 50 lawyers in the US spending the majority of their time on cannabis-related matters, though there are others in their offices in Canada, Europe, and South America focused on the industry as well.

Eric P. Berlin, co-chair of Denton's cannabis group, added that when he first was advocating for cannabis legalization in 2008, he was warned it could jeopardize his career.

"Some of my old law partners didn't necessarily object to what I was doing, but told me I was ruining my career, that the stigma of what I was doing would stick to me forever," Berlin said with a laugh. "But of course, several years later when I was moving to Dentons, everyone said you're a genius who saw it from afar."

Cannabis' legal complexities

Of course, cannabis is still illegal on the federal level in the US.

Marc Hauser, co-vice chair of Reed Smith's cannabis law team, told Business Insider that because we haven't seen the federal government going after cannabis companies that comply with state laws, "we've all developed a level of comfort that this isn't going to get shut down tomorrow."


Sederberg told Business Insider that "there is more clarity today" regarding possible federal intervention in the cannabis industry than there was when he first got involved in the industry in 2010.

"There was very little paved law," Sederberg said, which meant having to look toward other regulated industries as examples while also keeping in mind the unique position that cannabis has as a federally illegal drug that has legal status in certain states.

Sederberg said that in the beginning, his firm lost several banking relationships because of its client base. The firm has since found a bank willing to work with it, he said.

Cannabis and law firms today

As the cannabis industry becomes more mainstream and there is increasing legal clarity on the federal level, Sederberg said that he is seeing more competition for clients.

He added that some bigger law firms that don't specialize in cannabis have brought his firm in to help on complicated deals.


Seth Goldberg of Duane Morris told Business Insider that the firm took on its first cannabis client in 2015 and now has a steady stream of clients.

"At this point, Duane Morris is providing the same types of service to the cannabis industry that we provide to all industries," Goldberg said. "We're doing M&A, we're doing applications for licenses, we're doing trademarks and branding, we're doing corporate structure and taxation advice and each of these areas has its unique cannabis-related issue."

Goldberg said that the cannabis industry "is far more Wall Street today" than it was in the beginning, but having cannabis clients does make his legal work more accessible to his friends and family.

"Everybody's always got some kind of pun to add to the mix," Goldberg said. "What I hear is, 'Are you going to bring samples to the meeting?"

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