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Choosing the Right Entity for a Cannabis Business: Alternative Business Types


One of the most important decisions a new cannabis business can make is what form of entity it will use. In fact, one of the first questions businesses ask is whether the right entity for a cannabis business is a limited liability company (LLC), a corporation, or something else. Like virtually all other legal analysis, the answer depends on many company-specific factors. In this series, I detail some of the key points to consider when determining the right type of entity for a cannabis business. In my last two posts in this series, I looked at companies and LLC. In this third and final article in this series, I’ll take a look at some of the alternative business types we’ve seen or heard of.

A Note on Limited Liability

For those of you who haven’t read my other two articles in this series, I want to define the concept of limited liability. Limited liability is one of the fundamental characteristics of certain types of businesses. If a person owns a corporation with limited liability protections, the person is generally not personally liable for debts, liabilities, etc. of the society. Except in a few limited scenarios, if the company is sued and loses,

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