Feb 19, 2018 - Blog by |

It was only a matter of time before the worlds of franchising and legalized marijuana intersected. According to Blue MauMau, Colorado-based Green Man Cannabis has announced plans to open 50 new outlets through franchising within the next three years:

“Christian Hageseth, the seasoned entrepreneur behind Green Man Cannabis, touts his dispensaries to be the best in the nation. He says Green Man is well known for its connoisseur grade craft cannabis and many Cannabis Cup wins. The business owner says he is now focused on building the world’s most powerful cannabis business franchise system under his new brand, One Cannabis. He touts that he has more than 20 years of experience in the business world and nine years in the cannabis industry. . . . One Cannabis, based in the founder’s home state of Colorado, expects to have 50 locations within the next 36 months.”

Legal Considerations for Cannabis Dispensary Franchisees

It appears that One Cannabis will initially be focusing its franchising efforts in Colorado, which has one of the most-favorable recreational marijuana laws in the nation. However, with the Justice Department’s rescission of the well-known (and heavily-relied-upon) Cole memo in January 2018, the future of recreational marijuana in the United States has shifted back to a greater level of uncertainty. State authorities in Colorado and other states have publicly opposed the Justice Department’s decision and indicated that they will not be revisiting their enforcement policies. But, the fact remains that marijuana is a Schedule I drug that is illegal to grow, sell and use at the federal level.

With a marijuana franchise, who is responsible for ensuring legal compliance at the state level, and who can face exposure to federal prosecution? Almost unquestionably, these burdens will fall on the franchisee. As a franchisee, you are an independent business owner operating under a licensed business system and brand. While franchisors may provide “guidance” and “recommendations” regarding best practices for legal compliance, a well-written franchise agreement (from the franchisor’s perspective) will fall short of interjecting the franchisor into franchisees’ business operations in a way that creates exposure for the franchisor.

Understanding the Terms of Your Cannabis Dispensary Franchise Agreement

Along with the legal issues that are unique to the recreational marijuana industry, dispensary franchisees must also be cognizant of the issues that come with the territory in buying a franchise. This includes issues such as:

  • Initial and ongoing financial obligations
  • Conditions on transfer and renewal
  • Default, termination and liquidated damages provisions
  • Operational standards (including system updates over time)
  • Territorial rights and restrictions
  • Exclusive supplier provisions
  • Choice of venue and mandatory arbitration

Our firm offers three tiers of fixed-fee franchise review services; and, with over 30 years of experience in franchising, attorney Jeffrey M. Goldstein can explain everything you need to know. For more information, please contact us to schedule a free initial consultation.

Schedule a Free Initial Consultation at the Goldstein Law Firm

If you would like to speak with franchise attorney Jeffrey M. Goldstein about your cannabis dispensary franchise opportunity, please call (202) 293-3947 or contact us online. With offices in Washington D.C., we represent new and existing franchisees nationwide.

Esteemed Lawyers of America Logo

Esteemed Law Firm Complex Litigation

Global Law Experts Logo

Recommended Firm in Franchise Litigation

Who's Who Attorney Logo

Top Attorney USA – Litigation

Avvo Franchise Lawyer Symbol

Superior Attorney in Franchising

Avvo Franchise Lawyer Symbol

Superior Attorney in Antitrust

Finance Monthly Global Award Winner Logo

Franchise Law Firm of the Year

Lead Counsel logo

Chosen Law Firm for Commercial Litigation

BBB of Washington DC

A+ Rated

Washington DC Chamber of Commerce

Verified Member

Lawyers of Distinction logo

Franchise Law Firm of the Year


Best Law Firm for Franchise Disputes in 2017

Law Awards Finanace Monthly

Franchise Law Firm of the Year

Top Franchise Litigator for Franchisees and Dealers

Top Franchise Litigator for Franchisees and Dealers

2017 Finance Monthly Award

2017 Finance Monthly Award

Contact Us

Goldstein Law Firm, PLLC

1629 K St. NW, Suite 300,
Washington, DC 20006

Phone: 202-293-3947
Fax: 202-315-2514

Free Consultation

Free Consultation