Similar to the dot-com boom in the late 1990s and the real estate explosion in the early 2000s, the burgeoning marijuana industry--especially marijuana dispensaries--has been skyrocketing. The marijuana industry is thriving, and with it comes the opportunity for many people to prosper.
We have noticed an influx of new companies that are popping up in order to get in early on the legalized marijuana industry. With rapidly growing new markets, such as marijuana edibles, marijuana accessories, cannabis research and development and various cultivation methods, the expansion of this new “Wild West” industry, has limitless potential in states where marijuana has been legalized.
However, as with any new industry, many of these new start-ups will flourish while others won’t last more than a couple of years. One significant but often overlooked element can determine the longevity of any start-up company: investors.
There are many investors just waiting for the next exciting, profitable business prospect who want to invest early in order to maximize their return. What attracts potential investors? A great product, of course, as well as a sound business plan.
Another good way to attract potential investors is by filing the company in the state of Delaware. Delaware continues to be recognized around the world as the best state in which to incorporate a business.
Some potential investors are more likely to invest in a startup when it’s a Delaware corporation. In fact, most venture capital firms will only consider investing in a startup company that is a Delaware corporation. Why not raise your company above the competition, making it as enticing as possible, by setting it up in the state of Delaware?
Four states--Colorado, Washington, Oregon and Alaska--have legalized marijuana for both medicinal and recreational use; several other states have legalized marijuana for medicinal use only but decriminalized it. It is very likely that more states will be following one or both of these trends in the near future. However, as of today, non-medical marijuana is still illegal in Delaware, so the use of the word “marijuana” is not permitted in corporate names.
If you have any questions about forming your new Delaware corporation or LLC through Harvard Business Services, Inc., reach out to one of our friendly customer service representatives today at 800-345-2677. We’re ready to help.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.