This two-part blog will highlight significant issues attorneys and their clients face as a result of the emergence of legalized marijuana. In this Part I, we’ll consider the challenges posed to banks and other businesses, as well as the ethical obstacles confronting lawyers. In Part II, we’ll look at employment law issues related to marijuana’s legalization.

The U.S. Department of Labor has recently issued a document (Administrator’s Interpretation No. 2015-1) that offers business owners additional guidance for properly classifying an “employee” vs. an “independent contractor.” The historic “economic realities” test, widely used by courts when determining a worker’s classification, consists of a number of factors that have over time been applied inconsistently and with certain factors given substantial weight over the others. The Administrator’s Interpretation does not change or reject the economic realities test, but rather sheds light on proper application of the test based on the circumstances. 

Setting up an LLC can, of course, offer many advantages. Chief among those advantages is an LLC’s flexibility. With less stringent requirements for compliance and less necessary paperwork than S-Corps and C-Corps, LLCs are easier to form and easier to keep in good legal standing.

The flexibility of an LLC, however, is not permission to be informal in its creation or operation. Consider the recent case before the 8th Circuit Court of Appeals, Robl Construction, Inc. v. Homoly.