Robert McVay, Partner at Canna Law Group
In the past few weeks we have been working with a number of cannabis clients in similar tough spots. They didn’t want to spend a lot of early money on lawyers, so they negotiated some service contracts on their own. These contracts are generally with “cannabis consultants” to help in the financial space — either providing CFO-level support or brokering investments or fixing up the company books. These are the type of business tasks for which a number of cannabis businesses hire outside cannabis expertise. Just like any arrangement, these deals can and often do go south. The investment broker doesn’t produce, or the outside CFO that presented as an expert turns out to offer subpar performance. The cannabis business is then looking at a contract calling for huge payments to an individual that is not providing the level of service the business wanted. It’s tempting to ignore the problem, stop paying on the contract, and hope the consultant goes away. But they never do. They come back and demand money despite their own lack of performance, and they threaten to sue.
How can you avoid this?
Read Robert McVay’s article at http://www.cannalawblog.com/cannabis-consultants-the-gift-that-keeps-on-giving/
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