Cannabis Business Formation and Public vs. Private Entity Selection

Video Description

Overview: The rapid growth of the cannabis industry has revoultionized the way that lawyers and business owners view corporate formation and governance. Cannabis businesses face unique questions and challenges at their outset. This panel discussion, from September 2016, features four corporate law experts well versed in the cannabis industry as they discuss the differences between LLCs, S-Corps and C-Corps.

Learning Objectives

  • Understand the advantages and disadvantages of LLC versus S-Corp election for cannabis businesses

  • Discussion of how corporate formation should be planned for cannabis companies planning to go public in the future

  • Discussion of hemp vs. marijuana businesses and the impact of 280E on the two different cannabis business models

  • Understand the reasons for a C-corp election for possible venture capital opportunities

  • Understand member voting, dispute resolution and transfer of membership interests and how these considerations impact entity formation

Presentation By: Tae Darnell, Esq., Brent Johnson, Esq., Dennis Brovarone, Esq., Larry Mishkin, Esq.

Presenter Bios:

Dennis Brovarone is a Senior Attorney at Hoban Law Group where he continues his 30 year legal practice in Colorado specializing in corporate finance, governance and securities law. Mr. Brovarone received his J.D. from the University of Denver College of Law in 1986 and his B.A. in political science from the University of Colorado in 1978. Mr. Brovarone has served entrepreneurs and investors with his deep experience in capital formation at all levels, corporate transactions and federal/state compliance, including the new option of crowd-funded investment.

Tae Darnell is an attorney and cannabis entrepreneur and he is Counsel to Hoban Law Group. In addition to the practice of law, Tae currently serves as the President of Sensi Media Group. Prior to joining Hoban & Feola, Tae co-founded the Cannabis Law Center where he was one of Colorado’s, and therefore the nation’s, first full time Cannabis lawyers. His firm has represented over 500 dispensaries, cultivation premises and infused product manufacturing companies in addition to playing a pivotal role in Colorado’s rise from operating under a Constitutional Amendment to outright regulated legalization. Tae also wrote the original draft of the medical marijuana legislation recently passed in the state of Hawaii. Tae’s clients represent the definitive leaders in the Cannabis industry and include companies and individuals considered to be the future of the industry. He is also an active member of the National Cannabis Industry Association and sits on the esteemed board of the National Hemp Association.

Brent Johnson is a member of the Hoban Law Group Executive Team and specializes in the representation of closely-held entities and emerging growth companies through the whole business life cycle, including entity selection, formation, equity and debt financing transactions, acquisitions and the eventual transfer or sale of the business.  In addition, Mr. Johnson acts as general counsel to clients and supports ongoing operations, including commercial transactions, contract drafting and negotiation, intellectual property, employment, governance and general business matters.

Brent has over 20 years of legal, finance and executive level management experience.  He’s held key leadership and general counsel roles at numerous small and mid-sized growth companies.  In addition to his role as Of Counsel at the firm, he acts as EVP, Managing Director and General Counsel of First Capital Ventures, a leading management services provider and fund management company.  Prior to that, he was EVP, CFO & General Counsel for Atrium Capital Management Group, where he was responsible for strategic planning, execution, management and compliance across multiple business units.  Brent was previously Associate General Counsel for a leading restaurant franchise company during its aggressive growth phase where he managed corporate legal matters, including debt and equity financing transactions, franchise matters, acquisitions, intellectual property, corporate governance and commercial transactions.

Larry Mishkin is Counsel to Hoban Law Group and a partner in the Northbrook, Illinois law firm of Silver & Mishkin which represents entrepreneurs and small to mid-size businesses.  A lawyer for 28 years, Larry has traditionally focused his practice on assisting his clients in state and federal litigation, appellate and administrative matters including alternative dispute resolution options (arbitration and mediation) when appropriate.

In 2013, Larry expanded his practice to include representing groups seeking marijuana dispensary and cultivation licenses in Illinois as well as business interests ancillary to the medical marijuana market.  Since that time, Larry's cannabis based practice has greatly expanded to now include representations of third party providers to Illinois cultivation centers and dispensaries, Illinois health care professionals, Illinois patients, cannabis based investment funds and holding companies, the International Cannabis Association (General Counsel), cannabis industry business consultants, and My Compassion (Legal Counsel), a Michigan based patients advocacy group committed to educating local residents and health care professional on  their rights, duties and risks under the Illinois cannabis Pilot Program.

Larry also regularly consults with and counsels persons and groups looking for entry into the medical cannabis industry.  As a regular presenter on the cannabis business conference and trade show circuit, Larry has developed a strong network of connections with persons in all parts of the legal cannabis industry throughout this country and in Canada and parts of Europe.