Why Most Cannabis Businesses Should Ditch Their SOW Models

Lately, in my review of certain cannabis transactional agreements like cannabis intellectual property (IP) licensing agreements, manufacturing agreements, and distribution agreements, I’m seeing a really high number of statements of work (SOWs) attached. I’m not opposed to SOWs when they make sense. In cannabis though, nine times out of ten, a SOW model isn’t necessary, overcomplicates the parties’ performance, and creates conflicts between agreements. I think the reason I’m seeing a lot of SOW models is because licensees tend to rip their agreements from Google or just go with the flow on whatever a legalzoom style outfit tells them regarding the necessity of a SOW system no matter the industry, the regulations, or nature of the work.

You usually see SOWs incorporated with master services agreements (MSAs) or requests for proposals between vendors and their clients (think Microsoft or Apple vendor agreements, see here and here for legit SOW examples). The MSA sets forth the main legal terms and conditions between the parties (like term of the agreement, termination rights, confidentiality, representations and warranties, etc.). The SOW (or SOWs) typically controls and enumerates specific details around a given project or projects that will occur between the parties sometime during the

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