Asset Protection

Los Angeles Asset Protection Attorney

The federal government has become increasingly aggressive in misusing seizure and asset forfeiture laws as an enforcement tool. Our Los Angeles marijuana dispensary attorneys continue to work with medical marijuana growers and business owners throughout Southern California to protect their rights and to protect their investment.

The U.S. Department of Justice continues to issue letters threatening property seizure to those renting to legitimate medical-marijuana businesses, according to Americans for Safe Access. The organization says the Drug Enforcement Administration has issued hundreds of letters to landlords who rent to collectives throughout California, including Los Angeles, Santa Barbara, Santa Cruz, San Mateo, San Francisco, Alameda, Marin, Sacramento, and Mendocino counties.

However, ASA reports only one known instance where the feds have been even partially successful in an asset forfeiture case against a third-party landlord. In such cases, the government must prove the landlord knew the actions of a tenant were illegal and did not take reasonable measures to stop them. Proceeds from seizures generally pour back into law enforcement coffers, which is enough to often ensure aggressive application of seizure powers.

Seizure Help for Marijuana Dispensaries and Landlords

While the federal government continues to target landlords, owner-operators of farms and dispensaries may be at highest risk for seizure and asset forfeiture.

Investors and others engaged in building legitimate medical marijuana enterprises, must concern themselves with more than simple compliance with the Compassionate Use Act of 1996 (Prop 215), and the Medical Marijuana Program Act (Senate Bill 420). City and county bans abound and more than a decade of case law now forms the leading edge of California's medical-marijuana industry.

Asset Protection for Marijuana Dispensaries

Business Formation: Sole proprietorships, partnerships, S-corps, limited liability corporations (llc) and other legal structures offer varying degrees of protection. All new business ventures are best served by legal guidance at formation. The specter of seizure and asset forfeiture in the medical-marijuana trade makes such planning all the more critical.

Operation: Engaging an experienced medical-marijuana business attorney will help ensure your business is being operated in compliance with the laws of the state. Proving compliance with state law may be critical in defending an asset forfeiture. After all, we can't very well argue what you were doing was legal under state law if you are not in compliance.

Trusts, LLCs and Asset Protection: Using sound financial planning can help protect assets from creditors or other seizure or enforcement action. Such structures can make it more difficult, expensive and time consuming for creditors to locate and seize assets.

Financial Management: As the feds continue to pressure banks or use the Internal Revenue Service to make it more difficult for legally operating dispensaries to remain legitimate, having a legal plan in place to handle the finances may ultimately save the entire enterprise. Those lamenting the differences in state and federal law should not forget the financial challenges. For instance, California law requires marijuana collectives to operate as non-profit enterprises. However, applying for non-profit status with the IRS would be tantamount to an admission to federal drug violations.

Estate and Taxes: Staying on the right side of the IRS is important in any business. But never is that more true than if your business is medical marijuana. Real estate trusts and others tools of probate or investment may also afford additional protections under the law.

Proactive Defense: If your business is medical marijuana in California, you better have an experienced marijuana dispensary defense law firm protecting your rights. Those most assertive in defending themselves may well enjoy the most success.

At the CANNABIS LAW GROUP, we are committed to protecting your investment. Call 719-937-2050 for a private consultation.

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