How Cannabis Startups Can Prevent Internal Legal Disputes

The message here is clear; the best way to prevent, avoid, or mitigate the potential negative impacts of a business dispute are to ensure that the fundamental terms and conditions of the working arrangement of the founding partners is well articulated in advance. Having official operating agreements, bylaws, and shareholder agreements are crucial, as they put in place the much-needed contours of the company structure and all associated ownership rights and responsibilities. These documents should contain detailed information concerning each individual’s official role (and what powers the individual does not have), board representation, equity interest, and employment terms. Ownership issues or disputes commonly arise as a result of the “let’s not worry about it now” syndrome, so having the tough and understandably awkward conversation in advance really is absolutely essential.