If your consultant is demanding 20% or more equity in your cannabis business, you’re being scammed.
At Canna Business Services, we frequently receive reports of consultants and law firms engaging in blatantly predatory agreements with cannabis business owners. We’ve seen groups get taken for a ride, only to look up and realize they relinquished 30%, 50%, 70%, and even upwards of 90% equity, and rev share of their own business! Heck, we’ve even seen firms take small amounts of equity to stay under the radar, but offer virtually no assistance and leave clients in the dark.
Many entrepreneurs entering the industry face tight timelines, lack awareness about the reputations of certain firms, and have limited knowledge about how to properly vet these firms before signing agreements. We’ve heard countless horror stories from clients who come to us to repair the damage caused by their previous firms.
These firms often use manipulated statistics to market themselves, pressure clients into signing exploitative contracts, and siphon revenue, ownership, and control directly from the business owner.
If you’re a cannabis business owner or entrepreneur considering working with consultants or attorneys, don’t let anyone pressure you into making quick decisions with tight timelines, overwhelming agreements, or insufficient time to review a contract. Asking the right questions can help you avoid the predatory firms. Vet thoroughly, check them against other firms, dig deeper into answers they provide to your questions…and if your gut is saying something is off, believe it.
DO YOUR DUE DILIGENCE!
