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Critical ways cannabis companies can protect themselves

On Behalf of | Jan 4, 2024 | Cannabis Business

Cannabis companies have many regulations to ensure they comply with. Because this is such a new type of business venture that’s still subjected to a lot of controversy and scrutiny, they must ensure they protect themselves.

There are a few ways they can do this. Whether they’re a brand new company or one that’s established, these points can help to minimize the chance of a legal issue.

Consider the business structure 

The business structure plays a primary role in protecting it. Setting the business up as a limited liability company places a barrier between the company and the owner. If the company is sued, the owner’s personal assets will remain protected. 

Obtain proper insurance

Cannabis companies should have proper insurance to offer some protection. This is a high-risk business, so be sure the coverage is sufficient for potential legal action against the business. 

Set and comply with employment policies

Labor law applies to all cannabis companies, so it’s critical to have everything set for employee pay, rest breaks and meal periods. In California, workers are entitled to a paid rest break for every four hours or the majority of that time that they work. They’re also entitled to a 30-minute unpaid meal period if they work six hours. Employees who work longer hours may have additional requirements. Overtime is another consideration for employees who work more than 40 hours in a work week.

A cannabis business that learns it’s facing legal action should ensure they have someone on their side who’s able to help them learn their options. Ideally, this will be done swiftly to minimize the effects of the incident.