Cannabis Deal Structure
Structuring a cannabis business sale
A cannabis deal is built around regulatory approval: control cannot pass until the regulator says so. These pages cover asset versus equity sales, approval contingencies, escrow and staged closings, management agreements, earn-outs, seller notes, reps and warranties, and the timeline from LOI to close.
Federal and state law current as of September 2026 — verify with counsel.
Asset sale vs membership-interest sale
APA or MIPA for a cannabis business? How license rules, inherited liabilities, 280E history, tax basis and contracts differ between an asset and an equity purchase.
Cannabis sale timeline: LOI to close
A step-by-step cannabis deal timeline from signed LOI to closing: diligence, purchase agreement, regulator clocks by state, local approval and closing tasks.
Earn-outs in cannabis deals
How earn-outs work in cannabis business sales: metrics, real examples from SEC filings, regulator profit-interest rules, tax treatment and seller protections.
Employee transfer and agent badges
Which cannabis employee badges survive a sale and which must be reissued, with rules from Colorado, Massachusetts, Illinois, Nevada, Michigan, plus WARN basics.
Interim management services agreements
What an interim management services agreement lets a cannabis buyer do before approval, state limits on fees and control, and fines for hidden control.
Inventory and biomass at closing
How cannabis inventory, plants, and biomass are counted, priced, and moved to the buyer at closing: target pegs, valuation bases, tracking-system rules, and tax.
NDA and confidentiality
What a cannabis deal NDA should cover: regulator-disclosure carve-outs, no-contact and non-solicit terms, track-and-trace data, public records and remedies.
Non-compete and non-solicit
Seller non-competes in cannabis deals: FTC rule removed in 2026, California B&P 16601, Colorado's 2025 minority-owner cap, scope drafting and tax allocation.
Regulatory-approval contingencies
How to draft the approval condition in a cannabis purchase agreement: which approvals to list, setting the outside date, efforts covenants.
Reps, warranties, and compliance indemnities
Cannabis purchase agreement reps and indemnities: license, track-and-trace and 280E tax reps, caps, baskets, survival, ABA 2025 deal-point norms and set-off.
Seller notes and security interests
What can secure a cannabis seller note: UCC 9-408 limits on license liens, equity pledges, Maryland and Oregon rules, and why remedies need state approval.
Staged closings and escrow pending approval
How cannabis deals split closing into stages while regulators review the buyer: escrow agents, release triggers, carve-out closings, options and holdbacks.
Transition period and owner training
How seller transition and training work after a cannabis sale: typical length, what the price includes, consulting terms, badge rules and a handover agenda.