In the span of roughly six years, we’ve witnessed the birth and meteoric rise of a new industry. The rate at which cannabis legalization has spread across North America is nothing short of amazing, and a clear indication of this incredible plant’s very bright future.
Along with the cannabis industry as a whole, we’ve also witnessed the rise of the cannabis professional. Attorneys, consultants, brokers, CPAs, and many other types of specialized service providers have either added cannabis to their list of industries served or transitioned totally to cannabis specialization.
While there are plenty of reputable professionals with legitimate cannabis experience and expertise in California, there are also, regrettably, a lot of imposters. The sheer newness of the industry makes it all too easy to exaggerate or embellish one’s credentials, and it’s critical that you carefully vet your service providers before signing binding agreements or contracts.
To help you through this process, we’ve put together a list of five things to consider before hiring a California cannabis business professional.
1. Consider Their Cannabis Credentials
While this may seem obvious, too many business owners simply don’t take the time to properly investigate potential service providers’ cannabis credentials. Start by asking them directly how many cannabis-specific deals they’ve brokered, or how many clients they’ve successfully helped through the cannabis retail licensing process. Then, follow up with references — they should have no problem providing you with some if they have legitimate cannabis experience.
2. Consider Their Depth of Knowledge
How much does the accountant you’re considering know about tax code 280E? What can the attorney tell you about California dispensary laws, regulations and procedures? You should prepare several specific, detailed questions ahead of your initial meeting to truly test the professional’s expertise.
3. Consider the Return on Investment
Professional services aren’t known to be cheap — at least not quality services that are backed by legitimate credentials and experience. And as with any major purchase or investment, you want to know exactly what it is you’ll be paying for when you sign a service contract.
The professional you’re considering hiring should be able to provide a detailed, enumerated list of what their service includes; any vague or ambiguous statements should be thoroughly scrutinized.
4. Consider a Background Check
Unfortunate as it is, the truth is that plenty of hardworking, law-abiding business owners have been taken for the proverbial ride by con artists and criminals posing as cannabis professionals. Any professional with true credibility should have no problems submitting to a basic background check.
While it might seem like an unnecessary expense on your behalf, think of the hit your brand could take if it comes to light that you’ve been associating with someone that’s shady or corrupt. Better to take precautions upfront and protect yourself, your dispensary’s brand, and your business at all costs.
5. Consider the Cost
Last but not least, you need to carefully consider the cost of legitimate professional services. You absolutely will pay a premium for them, so be prepared for the initial sticker shock.
In fact, you should be extra cautious of professionals who quote extremely low rates; as the saying goes, if it seems too good to be true, it probably is. On the flip side, there are plenty of unexperienced consultants charging rates that are in line with legitimate service costs, which makes it crucial for you to vet potential providers as carefully as possible.
2 Warning Signs
Along with the five considerations above, here are a couple of warning signs to watch out for when considering a cannabis service professional.
1. You know more about California cannabis compliance, laws and regulations than they do.
If you’re talking to a potential service provider who’s misquoting laws, constantly referring back to notes (or their phone) for cues, or just generally doesn’t seem to have a grasp on specific California cannabis codes that are specific to their specialization, you should consider it a giant red flag. You shouldn’t know more about their profession as it relates to cannabis than they do — though you should be educated enough to tell when they’re blowing smoke.
2. They ask you to keep things under the table, not be completely transparent, or otherwise skirt legal requirements.
A good rule of thumb here is if it sounds shady, chances are it is. And if you’re not quite sure, definitely don’t sign any contracts until you’ve had a chance to research further and find out whether they’re asking you to do something that could potentially strip you of your license or even land you in jail.
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