Over the years in my practice, including several instances in the past six months, I have advised cannabis business owners when a former partner has come back to haunt the business operations, usually looking for some type of payout based on a prior conversation or an agreement originally inked upon a lost napkin or envelope.
If You Haven’t Completed Your Partnership Agreement, You’re Not Unusual
In a perfect world, business partners would agree to all of their business terms, form an entity, sign an operating agreement, give copies of everything to their attorneys, and unswervingly abide by their original agreement. I do not practice law in a perfect world, and business owners almost never do things in the “right” order from a legal perspective.
Your cannabis business is often developing organically, and no one wants to slow down and spend money to put things on paper that you all agree on. I get it. I have had dozens if not hundreds of conversations with business owners early in the business formation, midstream, or at the end of a business when a final sale is on the horizon or the company is significantly altering its ownership structure.
Ignoring Your Agreements Won’t