TRUST ME! I'M A LAWYER.

WRITTEN BY JADE PEBWORTH

Starting your Cannabis company can be difficult. You may be asking yourself, where do I even begin? Here is a brief overview to help get you started.

Decide how to structure your company.

Apply to the Oklahoma Medical Marijuana Association (OMMA) for the proper licensing.

Continue to comply with the laws of the State of Oklahoma and the regulations of the OMMA.

Determining your company structure is the most important step because you are the only one looking out for your liability and limiting it should be your highest priority. You may operate as a sole proprietor or a general partnership but the risk to you, as an individual, is enormous and unnecessary.

Corporations. A corporation is an entity in which individuals hold shares of stock that directly correlate to ownership. To establish a corporation, you must file Articles of Incorporation with the Oklahoma Secretary of State (OK SOS), create bylaws, which will function as the rules for your company, and conduct annual meetings. Corporations provide limited liability protection to their shareholders, directors, and officers when acting on behalf of the corporation. Unfortunately, corporations are subject to double taxation which can be burdensome on a new company.

Partnerships. There are general partnerships (not good), limited liability partnerships (LLP)(pretty good), and a limited liability limited partnership (LLLP)(great). An LLP requires a filing with the OK SOS and payment of a security bond. The LLP must consist of at least one general partner and one limited partner. The general partner will be responsible for the day-to-day operation and will not be afforded limited liability protection. In an LLLP, the same filing requirements exist, but here, the general partner is afforded limited liability protection, just like the limited partner. All partnerships benefit from one layer, flow-through, taxation.

Limited liability companies (LLC). LLCs are simple and phenomenal. You must file Articles of Organization with the OK SOS and pay a filing fee, nothing more is required to start your LLC. Creating an Operating Agreement is always a good idea and can serve as your ownership disclosure documentation for the OMMA. All members of an LLC, regardless of their ownership interest, are afforded limited liability protection.

An LLC can sue, be sued, take a loan, and enter a contract. By default, LLCs benefit from one layer, flow-through, taxation. Each company is different but applying for your OMMA business license will be nearly identical for any company structure.

- Jade