It was not long ago that large law firms avoided working for cannabis entrepreneurs, particularly those whose companies were not licensed to provide products to medical patients.
How times have changed.
Lawyers at many Vancouver law firms say cannabis-sector companies are their fastest-growing source of new business.
Some firms have attracted work by promoting their expertise in cannabis-related law; others have gained clients seeking legal help in areas as diverse as human resources, intellectual property and securities.
“Because we were the early movers, it gave us experience that nobody else had,” McMillan LLP partner Desmond Balakrishnan told Business in Vancouver.
His firm started to work for cannabis-sector clients in 2014 when it helped OrganiGram Holdings Inc. (TSX, Nasdaq:OGI) go public on the Toronto Stock Exchange through a reverse takeover. McMillan’s recent work for OrganiGram included helping it go public on Nasdaq on May 21.
McMillan counts 12 other lawyers in Vancouver who have a significant workload related to cannabis-sector clients.
“We’ve acted on the largest IPO of a Canadian licensed cannabis producer – the Green Organic Dutchman [TSX:TGOD],” said Balakrishnan, who co-chairs his firm’s cannabis practice group with James Munro.
“We acted on the only hostile takeover bid in Canada – Aurora [Cannabis Inc. (TSX:ACB)] taking over CanniMed [Therapeutics], and in the largest merger or acquisition transaction of any cannabis company – the Aurora-MedReleaf deal that was worth $3.2 billion.”
He added that McMillan, like much larger firms, provides a wide range of services to cannabis companies.
Stephen Robertson, a partner at Vancouver’s second-largest law firm, Borden Ladner Gervais LLP (BLG), said that for his firm, getting cannabis-sector work “was definitely intentional.”
“The firm saw an opportunity,” Robertson said. “Our cannabis-law group was formally established in 2017, but we have had people who have been looking at [cannabis law] even beyond that.”
BLG has 57 lawyers countrywide who count cannabis as a significant part of their caseloads, Robertson said. That includes 13 of the firm’s 125 lawyers in Vancouver.
“We approach things from a multidisciplinary point of view,” he said.
“We have lawyers, like myself, who are doing things such as corporate or securities work, helping cannabis companies raise money and go public on the exchanges that allow them to do that. We also provide regulatory work, tax work, intellectual property work, real estate work, marketing and, advertising, labour and employment, and, most important, litigation, for people in the cannabis industry.”
Fasken Martineau DuMoulin LLP, the only firm that has more Vancouver lawyers than BLG, according to BIV's 2019 list of largest law firms in Vancouver, counts seven lawyers who have a significant workload for cannabis-sector clients. Its cannabis practice is led out of the firm’s Toronto office, but Vancouver lawyers in a range of practice areas are seeing more work for cannabis companies, said Fasken partner Andrew Jackson.
“These are businesses, and they are going to have to follow the same path as any other business in a regulated industry,” he said.
“They’ll have employee issues, regulatory-oversight issues, city-bylaw issues. It will be boring. Suddenly, they are no longer the grey area.”
While Fasken has been discreet about its cannabis-law group – it removed reference to it on its website because of potential trouble for its lawyers when crossing the U.S. border, according to Jackson – other firms actively market their growing cannabis-law teams.
Alexander Holburn Beaudin + Lang LLP has 12 Vancouver-based lawyers who largely focus on the cannabis-law sector, while McCarthy Tétrault LLP has two Vancouver-based lawyers who are involved significantly with cannabis-related work as well as lawyers from Toronto who visit Vancouver often.
Dentons’ cannabis-law practice is also based outside Vancouver, but the firm last summer brought on Shea Coulson to head the Vancouver branch of its cannabis-law group. Coulson is well known in legal circles for work on cannabis and for high-profile alcohol-related cases, such as the Comeau case, which went to the Supreme Court of Canada.
The firm now counts seven partners and 15 associates countrywide who have caseloads that are primarily cannabis related. Five of those lawyers are in Vancouver, Coulson said.
With cannabis edibles set to be legalized by October and an entirely new field of law being introduced, all of these firms are expecting cannabis-law groups to expand.
“On the less positive side, you’re also going to see some bankruptcies coming up,” Robertson said. “That will keep people in the financial-services group busy.” •