Bridge West Consulting had an opportunity to speak with Sahar Ayinehsazian, Partner at Vicente Sederberg LLP. As a senior member of the firm’s corporate group and the co-chair of the firm’s Banking and Financial Services Access Group, Sahar guides multi-state operators in the cannabis industry in their expansion into new markets across the U.S. and advises businesses, investors, and other law firms on the nuances of executing corporate transactions involving licensed and ancillary cannabis companies.
Read on to learn many best practices and insights from a true cannabis industry expert!
What types of corporate services should a cannabis company consider at various lifecycles and stages?
Sahar said, “It is essential for cannabis operators to properly form their entities, which will reduce your personal liability. As a cannabis entrepreneur, you want to spend your time building your business, not having to fight lawsuits because you’re personally liable.”

Operators must also ensure their governing documents are in place. Potential investors or partners will request to see the foundational documents at the very beginning, and you want to show that “you have all your ducks in a row.” You will need to prove that your entity truly owns everything and there’s no need for a massive corporate clean-up before anyone else can join you.
Sahar continued, “Depending on your business goals, you may also need to explore other types of documents and agreements, especially if you’re trying to build a brand. For example, next you would want to focus on ensuring that you have proper intellectual property protection, so you know everything under your brand is well-protected.” Sahar also recommends that operators not sign any agreements as individual entrepreneurs, even if you’re at the very start.
What are the next essential steps?
Sahar recommends that after the legal documents are filed and branding is established, operators should think about the best routes for fundraising. When bringing in a partner or choosing fundraising, Sahar said that it is important to ask yourself critical questions, including:
- Do you want to bring people in for equity?
- Do you know true partners that can come in and provide either funds or services in return for equity in the business?
- Do you want to have a debt round to keep your equity?
- Since you must pay that debt back, what will the terms look like?
- Do you want to explore a bridge round versus take on more long-term traditional debt?
Additional vital questions to ask include:
- What will this look like if you bring in an equity partner?
- How much of the day-to-day operations do you want to keep control over, and how much do you want to share or give away?
As you get further into the company’s lifecycle, what issues should operators consider?
Sahar said, “As your company grows, you may want to investigate opportunities to be acquired or merge into a larger company.” At this stage, she recommends asking more questions such as:
- Do I have everything that a potential acquirer will look at for due diligence?
- What will an ideal acquisition look like for me?
- Am I ready to give up complete control of the company, or do I want to remain involved?
Given that this is the cannabis industry, are there different or unique considerations?
Sahar commented, “You always want to consider the ‘cannabis side of things,’ whether you want to pursue a merger or acquisition, or instead you want it to be an option, especially regarding the loan, or bringing in partners.”
She continued, “Generally, if you’re a license holder and if you’re a plant-touching entity, there is a whole ‘other wrinkle’ of what is it going to look like on the regulatory side. Sahar recommends asking:
- Do I need to get pre-approval or post-approval?
- Is there a moratorium on being able to change owners?
- Can I sell my license like an asset, or do I need to do an equity transfer?
- Do I need to stage equity transfers, or can I do 100% transfer?”
Are there any additional essential considerations?
Sahar said, “Another important consideration is your entity’s social equity element, which needs to be heavily considered, so it’s not just corporate. There are a lot of regulatory considerations that will help frame what the ultimate transaction ends up looking like and an additional tier of tax that will be added to everything.”
She explained, “It is imperative to address tax considerations very early, even at the start-up stage when you’re just starting to form your entity. You will want to talk to an experienced cannabis industry accountant or tax consultant, who can ultimately provide you with the various considerations that go into the kind of entity you wish to form.” Sahar continued, “It is imperative to understand the protections that are afforded with certain entities and the taxation rates that come with that kind of entity. Cannabis operators need to continue working with tax counsel and solid accountants and advisors who understand the cannabis industry and especially the tax and 280E. This is very important and goes hand-in-hand with having good corporate counsel.”
Sahar recommends proper preparation and planning for all business owners, especially in the cannabis industry. She said, “Preparation and planning are key to a successful business. The clearer, and more organized and well thought out your structure and business is upfront, the more time and in turn money, you save will down the line. As your business continues to grow and expand, you will have more assets. If you don’t have a clean structure right off the bat, it gets to be more complicated to clean things up.”
Can you share any additional strategies for operators who want to take the M&A route?
Sahar explained that when it comes to M&A, traditionally the target has due diligence performed on them. Still, the target should also perform due diligence on the acquirer. This is primarily the case if the M&A deal consists of partial cash and partial stock, which tends to be ‘par for the course’ for cannabis. Sahar said, “Indeed, stocks are often considered for M&A deals and other types of transactions. If you are taking stock in an acquirer, you want to make sure that you’re comfortable with the stock, and it is a company in which you believe.”
When looking at cannabis companies, Sahar recommends ‘doing your homework’ by researching their history, and it is crucial to see how they have been operating. She said, “Look at their existing portfolio, and make sure that you fit in well with the rest of their portfolio. Make sure that they have the proper experience to be able to continue to run and grow the company that you have worked so hard to build.”
Sahar said, “Companies cycle through these stages at different rates, and the trajectory looks different depending on various factors, especially in the cannabis industry.” She explained that it is very quick, and corporate attorneys who aren’t accustomed to the cannabis industry look at transactions, especially matters like financing and M&A, and they’re surprised by how quickly things move. She also expressed how involved and multifaced these kinds of transactions tend to be in this industry.
Do you have any predictions or forecasts for the cannabis industry for 2022?
Sahar commented, “I think we’re going to continue to see the industry rising to the top. We’re going to continue to see who the powerhouse players are. One of the exciting things about what 2022 will hold is that these powerhouse players will hopefully really include equitable representation. I think that we’re going to see more and more representation of what the cannabis industry truly has been built on, and I’m really, really excited for that.”
What do you think of women emerging and coming to the top in this industry and at Vicente Sederberg?
Sahar said, “Change begins at home, and if we want to be able to see this kind of change in the industry and we believe in ourselves as one of the leaders of the industry, we have to lead by example. And I do think we {at Vicente Sederberg} do an excellent job of that. But, you know, we are always looking to grow and improve. If you say to yourself, I always get it right, you don’t have any room for improvement, and we certainly are constantly looking for ways to improve.”
In closing, do you have any hobbies or interests that you enjoy in your free time?
Sahar enjoys visiting museums and she is a fan of collecting Salvador Dali’s illustrations of Dante’s Divine Comedy.” Sahar said, “It is an ultimate luxury to explore museum exhibits, take my time, and roam around. I love not setting any time limits and ‘getting lost’ reading and learning about artists and their work.”