California · New York · Massachusetts · Transactions

Cannabis contracts and transactions

Supply and distribution agreements, white-label and licensing deals, M&A and asset purchases, investment documents, and the entity structure underneath all of it. Cannabis deals fail in places general transactional lawyers do not look: license transfers that need regulatory approval, ownership disclosures that trace upward, cash terms that do not work, and provisions that assume federal legality. Kocot Law handles cannabis transactions with those issues in view, drafting, reviewing, and negotiating the documents.

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Ryan Kocot · licensed in California, New York & Massachusetts. Attorney advertising. Contacting me does not create an attorney-client relationship; please do not send confidential details until we have spoken and confirmed there is no conflict.

LicensesA license may not move with the sale.Many states restrict or condition license transfers, so deals are often built around ownership changes the regulator must review or approve.
OwnershipRegulators trace ownership upward.Every state cannabis regulator has disclosure rules; the structure has to satisfy all of them at once.
FederalFederal illegality shapes the paper.IP, banking, dispute resolution, and enforcement provisions written for ordinary commerce can fail here.
ContingencyEvery contract needs a license-status clause.What happens when a party loses, modifies, or fails to renew a license mid-term decides who absorbs the loss.
Why it is different

How cannabis deals differ

A cannabis business formed casually, with a copied operating agreement, founders who never planned for investment, and an ownership structure that ignored state disclosure rules, pays for those decisions years later: at license renewal, in M&A diligence, or in an enforcement action. The contracts that run the business carry the same risk. A supply agreement that works for any other product can quietly transfer control of a license, trigger a disclosure nobody made, or leave a party with no remedy because the provision assumed federal legality.

Clean structure is not just good governance in this industry. It is a regulatory requirement. Every state regulator, the DCC in California, the CCC in Massachusetts, and the OCM in New York, has its own ownership disclosure rules, and the entity has to support those disclosures cleanly while the operating agreement supports the decisions the business will have to make as it grows.

How an engagement works

Review, drafting, negotiation, and the deal itself

Contract reviewYou have an agreement from the other side. You get a written list of the issues, proposed revisions, and which points matter most, so you can decide what to push on. Review does not include negotiating with the counterparty unless the engagement says so.
DraftingYou have agreed business terms and need the agreement. Ryan prepares it from the terms you confirm, then makes the revisions the engagement letter covers.
NegotiationRyan takes the discussion with the counterparty or its counsel and works the open issues toward resolution, within the scope set in the engagement letter.
Transactions and governanceOwnership changes, investment, acquisitions, and entity documents, with the regulatory disclosures and approvals that come with them. See entity, ownership, and governance below.

Every engagement letter states which of these are included. Ryan’s enforcement defense work shapes what he looks for in a contract: the provisions a regulator reads closely and the arrangements that come up in an investigation. A well-drafted agreement reduces risk; it does not prevent agency action or guarantee a licensing outcome.

Contracts and deals

What a cannabis contracts attorney does

Supply and distribution agreementsManufacturer-to-distributor, distributor-to-retailer, and brand-to-distributor agreements: volume commitments, pricing protections, exclusivity, regulatory compliance allocations, indemnity for product defects, and license-status contingencies.
White-label and licensing agreementsBrand licensing into other manufacturers, white-label production for retailers, and IP licensing across jurisdictions, with attention to the line between licensing IP and handling a controlled substance, which decides federal exposure.
Mergers, acquisitions, and asset salesBuy-side and sell-side cannabis M&A: stock purchases, asset purchases, and ownership-change transactions structured around state rules, since many states restrict or condition license transfers. Due diligence built around cannabis-specific risk.
Joint ventures and partnershipsVertical-integration JVs, brand partnerships, and multi-state expansion JVs, with the entity, ownership, and management arrangements structured to meet the rules of every jurisdiction involved.
Real estate and leasesCannabis-specific lease provisions: landlord consent, federal-illegality protections, premises modification rights, and license-tied termination triggers.
Service and vendor agreementsSecurity, transportation, testing, packaging, and software contracts, with attention to what it means when a vendor has access to product, premises, or data.
Employment and contractor agreementsEmployment agreements that address background checks, badge requirements, termination protocols, and employee theft and diversion; independent contractor agreements with a clean classification analysis.
Investment documentsSubscription agreements, convertible notes, SAFE adaptations for cannabis, and side letters that address regulatory disclosure. Investment structures aligned with the cap table and the ownership disclosures the regulator will see.
What we look for first

Common problems

Disguised license transfersProvisions that effectively transfer control of a license without going through the regulatory amendment process.
Beneficial ownership creepInvestment structures that trigger ownership disclosure obligations the parties did not anticipate.
Cash payment provisionsTerms that work in ordinary commerce and fail in a cash-heavy business.
Federal-illegality blind spotsIP, banking, and dispute resolution provisions that assume federal legality.
Missing license-status contingenciesNo answer to what happens if either party loses or modifies a license mid-contract.
Cross-jurisdictional trapsMulti-state deals where compliance with one state’s rules creates non-compliance with another’s.
Entity, ownership, and governance

What a cannabis corporate attorney does

Entity formationLLC and corporation formation, with the choice of entity driven by investor expectations and the cannabis rules that apply.
Operating agreements and bylawsDrafted to work for a cannabis operation: license-tied restrictions, regulatory consent requirements, ownership transfer limits that match state rules, and dispute resolution that works for a state-legal, federally illegal business.
Cap tables and equity issuancesCap table setup and maintenance, equity grant documents, vesting schedules, and issuances structured to keep the ownership disclosures clean.
Ownership disclosuresBeneficial ownership analysis and disclosure preparation for state regulators: mapping the ownership chain, identifying every disclosable interest under each state’s rules, and preparing the supporting documentation.
Member buyouts and ownership changesBuy-sell terms, member exits, and transfers between owners, with the regulatory review a change in ownership can trigger mapped before the change takes effect.
Multi-state holding structuresHolding company architectures for operators licensed in more than one state, designed for regulators that trace beneficial ownership upward and must all be satisfied at once.
Restructuring and recapitalizationsEntity cleanup, ownership restructuring, recapitalization for new investment, and conversions between entity types, with the disclosure implications mapped before anything executes.
Director and officer mattersBoard governance, officer roles and authority, indemnification, and the D&O insurance questions specific to cannabis.
Dissolution and wind-downsCannabis-specific wind-downs: license surrender procedures, asset distribution, and dissolving a federally illegal business under state law.
Why Kocot Law

In-house and private practice experience

In-house experience

Ryan Kocot built entity structures, cap tables, and governance frameworks from the ground up inside a cannabis company that grew from startup to a multinational public listing across multiple jurisdictions. The disclosure questions, the investor expectations, and the regulator’s reading of an ownership chain are things he has handled on the operator’s side of the table, not only as outside counsel.

Three states and the federal layer

Licensed in California, New York, and Massachusetts, with a federal DEA registration practice on top. A deal that touches more than one of those regimes is drafted with the conflicts between those regimes, and the federal consequences of a state license change, in view.

Deal or contract in motion?

Purchase agreements, licensing deals, leases, operating agreements, investment documents. Reviewed, drafted, or negotiated. A free 30-minute consult is enough to identify the cannabis-specific risks in what you have and what it would take to fix them. If you want help from there, you receive a written fee proposal before any work begins.

Book a free consultation Call (916) 572-6445 Send a note
Questions operators ask first

Frequently asked questions about cannabis transactions

Can I buy a cannabis license?

Often not directly. In many states you buy the company that holds it, or its assets, and the regulator reviews or approves the change in ownership; the rules differ by state and license type. A contract written as a license sale, or a management or consulting agreement that hands over control without the required approval, is a common problem and can put the license itself at risk.

My investor only wants a small stake. Does that still need to be disclosed?

Often, yes. Each state sets its own thresholds and definitions for owners and financial-interest holders, and some reach small, indirect, or convertible interests. The structure of the investment decides what has to be disclosed and when, so the disclosure analysis comes before the term sheet is signed, not after.

Our operating agreement was a template. Is that a problem?

It becomes one at the worst time: a renewal, a diligence request, or a dispute. A template does not know about license-tied transfer restrictions, regulatory consent requirements, or what happens to a member who becomes disqualified. Revising it is a defined project.

We operate in more than one state. Can one structure work everywhere?

It can, if it is designed for the strictest regulator first. Each state traces ownership upward through the holding structure and applies its own rules at each level. The structure has to satisfy all of them at once, which is why multi-state deals are built from the disclosure rules out, not from the deal terms in.

What does it cost?

A free 30-minute consult identifies what you have and what it needs. From there, you receive a written fee proposal before any work begins.

Related

License and enforcement defenseWhen the Department or your city moves against the license the deal depends on. DEA registrationThe federal registration priced on top of a state license, and what a state change does to it. Compliance and regulatoryInspection readiness, SOP review, and the records a buyer’s diligence will ask for. AB 2249 packaging rulesA supply-chain duty that lands on every link, and belongs in every supply agreement. California DEA Registrants: Review Your ContractsSupply, distribution, and licensing agreements were drafted for Schedule I. What to re-read now. Cannabis Joint Ventures: What to Consider Before Forming OneOwnership, governance, capital, licensing, exit rights, and IP before forming a cannabis JV.

Attorney advertising. This page is general information, not legal advice. Reading it, calling, or submitting a form does not create an attorney-client relationship; none is formed unless and until Kocot Law completes a conflict check and both parties sign an engagement letter. Prior results do not guarantee a similar outcome.

Have contract questions?

Free 30-minute consult: what you have, the cannabis-specific risks in it, and what it would take to fix. A written fee proposal before any work begins, if you want help from there.

Call or text (916) 572-6445 Book a free consultation
or send a note
I personally respond within one business day. Please don’t send confidential details until we’ve spoken and confirmed there’s no conflict. Attorney advertising.
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