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Choosing the Right Entity for a Cannabis Business: Corporations


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’ll break down some of the key points to consider when determining the right type of entity for a cannabis business. Today, I want to focus specifically on societies.

A Note on Limited Liability

Before I get into this, I want to define the concept of limited liability. Limited liability is one of the fundamental characteristics of a corporation, LLC, and some other 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 business is sued and loses, the owner will lose nothing – except, at most, their investment in the business.

Corporations are the wrong entity for simplicity

Corporations are the classic type of business entity. The problem with

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