Ep 46 - Understanding Cannabis IP Law & Why It's Critical To Your Success. An interview w/ Hannah Stitt - Esquire, Tectonic Law

As the cannabis industry grows so will the need for IP protection.  Often startup companies don’t realize the need to protect their brand.  Furthermore, people think it’s impossible to provide IP protection to something that’s considered illegal under Federal Law.  In this episode we interview Hannah Stitt, an attorney at Tectonic Law.  Hannah helps entrepreneurs navigate the legal landscape for cannabis companies. 

Cannabis companies should look at patent and trade secret rights from both an offensive and defensive position to ensure that they are securing protection for their own innovations while avoiding the growing minefield of patent rights of their competitors.  It’s possible to accidentally infringe on IP rights of another cannabis company and you don’t even know it. This is why it’s important to find a competent cannabis IP attorney who can help provide the solutions you’ll need to be successful. 

Listen to our interview to learn more about Cannabis IP Law….

About Hannah Stitt, Esquire
Hannah Stitt is an attorney based in San Francisco, California. She represents individuals and companies in trademark litigation and brand disputes across the state.

Currently, Hannah sits on the Ethics Committee for the International Cannabis Bar Association, as well as both the Barrister’s Cannabis, Alcohol and Regulated Industries committee and Intellectual Property committee for the Bar Association of San Francisco.

Ms. Stitt attended U.C. Davis for her undergraduate education, earning degrees in both Religious Studies and Film Studies. She graduated from U.C. Hastings College of the Law in 2015 with a concentration in intellectual property law.

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Transcript

Ronjini Joshua: 0:11

I have a great opportunity to sit down with Hannah Stitt, Esquire, the co founder of tectonic law. She's been a litigation attorney for the cannabis industry since 2018. She talks about some of the most common litigation issues in the cannabis industry as well as how important it is to have IP in the growing cannabis industry. Now, join us for this interview in the green room. Hi, today we are talking to Hannah Stitt . She's the principal at techtonic law. And you work in the cannabis industry. Obviously, this is your first time at mjbizcon. Is that right? Yes. So what a lot of people have a lot different feelings because it's post pandemic also. So how are you feeling about the emerging from your house, and then also your first show

Hannah Stitt: 1:05

lots and lots of feelings. I recently launched my law firm. So I've been in heavy business development mode and a lot of virtual meetings. So I'm really excited to be here to be able to meet people in person that I've been talking to, like on the phone or in zoom meetings, yet things zoom B's together. And so that's something that I was really drawn to it wanted to come here to just meet people who are in the industry that I knew but hadn't met in person. And it is my first time here. So something I'm really excited about is just seeing the level of sophistication in the people who have exhibits on the floor. Like looking at these big companies, it's nice to see people who are all like, they're just getting their business off the ground. But there's also some operators here who have been a space for a while, since before we really had any kind of properly legalized medical market and to see them out here and to see their equipment. And like how sophisticated This is gone. It's it's pretty exciting to see that the industry is no longer just like a little tiny. Hush, hush, little baby. Yeah, exactly. That's

Ronjini Joshua: 2:04

really cool. And yet you have a very different perspective, I would love to hear a little bit more about yourself and how you got into the industry.

Hannah Stitt: 2:14

Well, stop me, if I take too long my story Oh, b t when I was in college I in n California, which is where I also practice, and I went o college at UC Davis n California, in 2010, I belie e it was there was a prop to 1. And this was essentially ju t like a voter initiative to g t some sort of market created. A d I was pretty surprised if I kn w that the people that I w s buying my weed from who's a l black market, were n t interested in their indust y becoming a legitimate industr. Yeah. And that was just an e e opener for me, because I couldn't really see why y u wouldn't want it to e legitimate where you could ha e less fear for federal civ l asset forfeiture or going o prison things differentl. Right. Like, life and libert. And so that was just an e e opener. And I was like, Oh, wo. And it had me starting to thi k about the, the cannabis. Like t the time I wasn't the you kno, as even as an industry, it w s just like, you know, where o you get your drugs? Yeah, b t looking at that as an actu l marketplace. That's was an e e opener for me. So when I end d up going into, into law schoo, and actually something else I had learned right at the sa e time, in 2010, I had a reall, really close friend who h d chosen to go to the milita y instead of going to pris n because he and his best frie d had been selling like, pills o their friends, you know, ju t boy kind of behavior. And not o make light of it. That is a th t is a crime. It is important n t to like, you know, yeah, in a ring of drug dealers, but I m seeing him make that choi e where he went to the militar. And then after the military w s at UC Davis, who was where I m t him. It just got me thinki g also about not only is it n industry, but it's real y related to, like, the war n povert

Ronjini Joshua: 4:02

Yeah. socio economic. Exactly. Yeah. To choose military versus jail.

Hannah Stitt: 4:06

Yeah, yeah. Right. And like even to be given that opportunity, because he's a white person. And like, lots of people of color aren't even given that option, you know, just straight into juvenile. And so being becoming aware of these types of issues at the same time that I was becoming a lawyer, like in law school, learning how the system works, really got me interested in this industry and why it would be better for us to have regulate space for people to use these kinds of products. Especially since, you know, some are not nearly as dangerous as other kinds of scheduled drugs like heroin that yeah, not compare. Yeah. So that's how I got interested in it. And then when I was in law school there were starting to be some political organizing in California because Oregon and Colorado and Alaska in 2014, had legalized their medical markets. So people in California were like, oh, This, this could be the year at that time, there was a sentiment that for the last 40 years, people had been going like, this is the year you know, okay. And the next year I'd be like, oh, there's there's been no change. There's been no political movement, there's been no change in how people feel about the moral culpability of using cannabis. That just every year no progress, and then all of a sudden in 2013 2014 I was like, oh, no, this could be the time like this could be really Yeah. Like, like the the Oh, geez that are around me. They're saying like, it's now like, I can I we it they might be right now. It's yeah, I got interested in well, what are the kinds of legal services that this industry is going to meet? And at the time, that was transactional work, compliance work. Just basic, basic needs, like getting your entity formed and the right, the right type of entity in California at the time there was a lot of collectives, a collective is an actual statutory type of entity. Other kinds of loose affiliations of people having to figure out how to fit into the system, but also play by the rules, because you weren't allowed to make a profit. It had to be in it wasn't that

Ronjini Joshua: 6:09

collective couldn't make a profit. Yeah. Okay. Oh, yeah. Like, oh, because it has to be like distributed or something like that. Right?

Hannah Stitt: 6:14

Yeah, it was like the regulations were like, Okay, you can, you can have this industry start to grow up, but we don't want you to be making money off of it. So there was this really strange moment in time, where a ton of people in California had to deal with the fact that they could finally have the benefit of having an entity in place, which is limitation of liability for the owners, and really desirable for people to be able to want to invest in your company so you can grow it. And a lot of people were actually setting themselves up as limited liability companies, which would normally be a for profit entity, unlike, for example, a nonprofit corporation, which is a strict corporation with an election at the tax level to be nonprofit. So they're like, how do we be in this space where we're a company but we don't make any money? So there was all these? Not for profit? Not a nonprofit, but uh, not I don't cry.

Ronjini Joshua: 7:03

That was the same thing.

Hannah Stitt: 7:04

No, that's, uh, that's where like, the lawyers come in. Right? And they're like, Okay, how do we do this? Damn, yeah, like nonprofit with the like, no and hyphen profit. That's an actual, like, legal charity. Yes, yes. And it has a legal meaning and the code in California as well as in the federal tax regulations. Okay. But the word not for profit, or sorry, phrase, that's a that's nothing that's a it's it's just a made up cut. People are just writing this into their mission statements so that they could try to be in this gray space where you're trying to be more grown up in sophistication level with having an entity, but you really can't participate fully because you are getting these regulations from California and you can't make any profits off of your off of your income. Exactly. Your business. But you also aren't able to be a nonprofit because a nonprofit is a federal tax election. And you can't get that benefit from the government

Ronjini Joshua: 8:01

or those not for profits are those that collective

Hannah Stitt: 8:05

so collectives. Yeah, well,

Ronjini Joshua: 8:07

different guys.

Hannah Stitt: 8:09

Yeah, like, sorry, if we're getting to hold me back, you know, like, I'm like, gonna get nerdy about it. A lot of the collectives I like a collective is real is it is an actual type of entity in California, like, you can register as a collective. Okay. And so those collectives would have mission statements that say, We're doing this for the benefit of the members. Okay, so we're not trying to make a profit from off of our members, we're just trying to make enough money that we can kind of re pay for everything. Yeah, like, you know, be able to continue to grow a little bit, but not there was no, like, you weren't gonna get picked up or acquired, right, as a collective. And so that was where we were in, like, 2015 2016. And then when we had the medical market, when those regulations came out, then the corporate entities became, I like they became on the radar of the of the legislature, and the legislature was like, Okay, well, we have this problem where like, people can't operate for profit, and they can't be nonprofits. So we need to figure out what to do here. So the next iteration of regulations that came out, especially with the recreational market being legalized in 2018, there's now a statutory provision that says you can be a for profit corporation in California. So that kind of like, Oh,

Ronjini Joshua: 9:23

if you okay. Yeah. And do they do that? I mean, you do just practicing California. Yes. So do they do that? I mean, you might know if they do that in other states to just for that state.

Hannah Stitt: 9:34

Yes, exactly. And I think that the nice thing about the markets that are coming online now is that they can look at what happened in California and Nevada. Yeah, and they can be like okay, well, we don't have to do it exactly the same way right. Like we can just jump right into having in our, in our whichever way the legalization is happening, like be it by ballot initiative or by legislature. Those people are now like, oh, okay, part of our proposition are part of our going to be this year, it's going to have that protection in it, because we learned from California, Nevada that that was kind of a headache for them to deal with for a few years. So we'll just start off having learned that lesson, right, which is really useful. And so, back to how I got back to the industry. So in in the beginning, it was like, Okay, how do we answer these kinds of questions, yeah, to figure out how to get people to be actually able to make enough money or have investments that can grow. And at the time, there was no ability for a for a cannabis company to sue anybody else, whether it was a regular company or, or another cannabis entity company. And this has to do with and again, stop me if I get to break this. Okay. This is an area of the law called standing. In California, we call it to being the person in interest in general, this is something that every single state has this requirement, every as far as I know, every, every jurisdiction in the world will have some sort of like standing requirement. And what it means is that the the person who's bringing a lawsuit, they're the one that was harmed, and they think that the court has the power to fix that has the power to do something about that. So I'm in California, we didn't get the right to sue until 2017. So I already been in practice for a little bit. And in law school, it was like, Okay, well, I I like litigation, I'm, I'm kind of a high high energy and passionate. So I knew I wanted to do that eventually,

Ronjini Joshua: 11:25

like to argue ideally.

Hannah Stitt: 11:27

Right. And so, so I, there wasn't really any opportunity to do that, because nobody had standing. But then in 2017, the legislature created a statutory code. And it said that the lawful purpose of a contract can be a cannabis plant, and it as long as the operator is compliant with state law. So that created a space where people were actually able to use the benefits of legal system, because if you don't have standing, then you know, your contract isn't really worth a whole lot. Because why do we get into contracts? We get into contracts to make yourself Exactly, yeah. And if you can't go into court to enforce those terms, then what's the point of even having the written document, right? So my practice is kind of, it's grown with the needs of the industry. And now that we're in 2021, there are people out there who are there, there are businesses out there who are mature enough to the point that they do have brand disputes with other people in the industry. They do have contract disputes, they can afford litigation, litigation is very expensive. So that's another reason people weren't litigating a whole lot. There was not a lot of capital. Yeah. So um, it's funny when you look at my resume, I think a lot of a lot of like traditional larger law firms, the people who are hiring, they're looking at my resume, they're like, oh, this person has worked here for a little while and here for a little while, and they're, and it's hard for them to see the thread but someone from the cannabis industry can look at my resume and be like, Oh, cannabis, cannabis, cannabis, you know, so it's like, it's an interesting thread that has, you know, gone through about each choice I've had in my career and now that I have my own law firm, I'm tending to specialize in intellectual property litigation. I do a lot of trademark disputes. And I have a lot of experience and other types of disputes as well. But intellectual properties like my my nerdy lawyer, passion, yeah. So now I'm merging it with my like, industry passion. So hopefully doing intellectual property for cannabis companies will will be a path I can continue to go down

Ronjini Joshua: 13:27

and what is what does that mean for the cannabis industry? What is the intellectual property in that case?

Hannah Stitt: 13:31

Yes. So intellectual property is, it's going to be non tangibles, right. It's going to be something like your name and your product packaging. The kinds of like, a trademark is actually the the term that we use to assign value to like the goodwill that the consumers have in your product. Okay, so a really easy example for me is like Nordstrom. Like, I love Nordstrom. I know that you know, if I get it, I literally ripped a shirt this morning that I just bought last month, and I know we're gonna return it exactly. I'm not gonna take it back and probably take it back. If I've been wearing it for three years. I don't know why they have that policy, but it's a good policy. Yes, like consumer, the faith and gets you to keep coming back to Nordstrom. So that kind of that intangible goodwill value that people are able to generate by you know, Hirata name, exactly. That's what the IP is, is really about. And the nice thing for the cannabis industry is that at the end of the day, and I will say like, other attorneys may have different opinions about this, I think if you asked 15 attorney to get 15 different answers, but no one can come in and rip up your trademark rights. Like nobody can burn your trademark rights, right? Like if there's any kind of like raid on your property, and you end up losing a crop or natural disaster, right? Like those kinds of things cannot actually affect your intangible intellectual property rights. So it can be a very, very valuable asset for a company to have, especially from an investor perspective, because, okay, where it's hard for an investor to really, or it's hard for a company to prove to investors like how profitable they are, because you know, we don't have to ad election, to be able to have write offs and things like that. So having some investment in your trademarking, or if you're able to patent if you have a technology that would lend itself to a patent, or maybe if you're an artist, or a part of your branding is like working with a special artist, you can have copyrights related to those kinds of, like assets or whatever, exactly. And it can make you more more attractive to investment to have these kinds of things,

Ronjini Joshua: 15:38

building your brand equity as well. Right, exactly. Yeah. I mean, it because it's building it from a business standpoint, obviously, you'd have it with a consumer standpoint, but then not built builds it on the business side. So this is I mean, do you what is your kind of like case for people? Like why should they have an IP? Should they have an IP? Should everybody have an IP? Like, how how do you answer that question?

Hannah Stitt: 16:01

So yes, I think everybody should consider protecting their intellectual property rights. To be a little bit more granular, your intellectual property rights, depending on what they are, like, if it's a trademark or a brand, right, or also for copyrights, you can have rights occurring under common law that are not protected. So you still have some rights, right? Like,

Ronjini Joshua: 16:24

you've been using something for a really long time. Exactly. Operating under that.

Hannah Stitt: 16:28

Yeah. So like, you still have rights, they're just not as strong if you don't try to go through the process of getting them like brand. Trademarks is a really good example. If you don't go through the process of trying to get a California registered trademark, or you don't try to go to the to the Federal Registered Trademark, then the presumption if the other party has those marks,

Ronjini Joshua: 16:49

is that their first? Exactly? Yeah, I had this problem once. Yeah.

Hannah Stitt: 16:53

Yeah. And it can be expensive to go through this process, especially if a business is really really in the startup phase, and it doesn't have like an extra. I'm gonna throw out there. Like, probably, if you you've hosted about at least 3000 to get one.

Ronjini Joshua: 17:09

Yeah, right. I thought you were gonna say million. I was like, no,

Hannah Stitt: 17:13

no, no, no, no, that would be way too much. If someone's charging 3 million for your trademark, you need to just run away. Yeah. Just don't talk to that person ever. But like one trademark, if you could get that registered at the federal level for like three to 5000, the California level, I don't actually know the price off of my head, I think it's a couple$100 to get it registered. But this will these kinds of rights, you can protect them on your own, you don't have to go through an attorney. But I do think it is more cost effective to work with attorneys. Because if you are just learning this yourself, and don't have an awareness of all the pitfalls that the the examination process involves, then you might end up spending more time or more money down the line. Yeah. Whereas if you just hired somebody who this is what they do, and it's their bread and butter, like they can, they can be more efficient in it. So even though that the sticker price might be like a little bit higher in the beginning, I think it is worthwhile to work with people who are professionals in that area.

Ronjini Joshua: 18:10

I mean, I think that's kind of like standard practice, like for anything like you can probably do your own accounting, but do you really want to write like, do you want to do your own taxes and miss something? Yeah, that's like, I feel like that's a you know, you have to pay for experience and quality and getting it done right the first time. And I know that a lot of businesses, you especially in the cannabis space have this capital problem, right, like of like, spending money and or not being able to spend money but like, it sounds like an IP, trademark copyright, whatever those things are, like might be something that is kind of like the fundamental thing if you're going to become a long term

Hannah Stitt: 18:49

rep. Yeah. Especially if you're if you're a brand really takes off. Yeah, like and I mean, I was just looking on LinkedIn, you know, when you came down the stairs to get me and somebody at the conference had taken a picture of a an exhibitor, I don't, I don't even know who it was, but it was like a Chips Ahoy, kind of a knockoff. So like, it's these branding issues are kind of coming to a head with like the the increased sophistication of the people in the market. Yeah. So it used to be fine that you could kind of say, like, wink, wink, nudge, nudge, like, this is a throwback, what it looks like. Exactly, yeah. And that was a lot more acceptable. And it actually made sense. Because when you're in an industry that is having to operate in the dark because of federal prohibition, like maybe you don't want to have the most unique brands like maybe you want to have the word green or you want to have a cross in your logo or you want to have a marijuana leaf in your logo to kind of hint to the consumer. Hey, come into my story. This is where you can purchase this product right but as the moral culpability of using this plant is diminished culturally, and the laws are opening up for people to be able to be You know, medically using recreational using, then it makes more sense to lean into the intellectual property. I guess we've got a paradigm or standards in the US and globally and start using the protections that you have available to you, as well as trying to really be unique. Like, it's less important for you to have that that Greenleaf logo or cross and less important to have the word can your brand, you know what I mean? So, because there's more people out there who it's just it's not a problem, like people are not as worried about attracting consumers to them, because it just can be more open now.

Ben Michaels: 20:37

Yeah, did you get so when, when California went from, because I noticed this was very big in California, when they went from, you know, medical only to, you know, rec, a lot of brands, and a lot of brands that spent a lot of time establishing that their trademarks and their names just disappeared, like my favorite, I think it was like a good nali joint, it was the most amazing thing in the world, I would go out of my way to get it from anywhere, and then boom, gone. And I wonder if like some of these brands, you know, tried to approach you, and did you notice a lot of that? And why maybe they they folded underneath that, that changing of the guard,

Hannah Stitt: 21:14

um, approached me of like, specific like

Ben Michaels: 21:18

your company, you know, trying to help, you know, solidify their brand awareness of their trademarks and utilize that because it seemed like they maybe they weren't getting enough money, you know, to keep up with the new regulations. I just, I saw all these name brands that I love to just disappear and never come back. Because so I'm wondering if like they were you if you had a lot of people reaching out to you and like, help us, you know, when this transition?

Hannah Stitt: 21:43

Yeah, I think we did. A lot of the times, it's actually interesting to see who has kind of gobbled up the companies. It's like those those those larger companies who were able to get the capital infusions, they really did start going after the small providers. And in some ways, it makes a lot of sense that the smaller companies were willing to sell themselves because, you know, it is a slog to be in the trenches, right. Like, it's hard, it's expensive, and it's just it's draining, you know, to be even if you're not truly worried about the federal illegality issues, you know, it's still a backburner anxiety.

Ronjini Joshua: 22:18

Yeah. So I mean, it's still real. Yeah,

Hannah Stitt: 22:21

I mean, fortunately, I haven't heard of anybody going to jail this year. But like, but you know, it also just, I don't know, everything that happens, right? Yeah. is still hot? Like, I

Ronjini Joshua: 22:32

don't tell you every time right.

Hannah Stitt: 22:33

Like, we know, hey, another person got eaten up on the system. But I'm so brutal. But yes, there was a lot of need to start having more sophisticated relationships and end transactions between these these players. Because when you are able to get a trademark, right, be it California or other state, a lot of a lot of states offer state trademark. It's available. It's a process per state. But because generally, and I don't know if you guys know this, but intellectual property rights in the US are generally a federal legal system.

Ronjini Joshua: 23:13

Right. As I was asked, I was gonna ask that actually is does it like, carry over to everywhere? Like, yeah, nationally or globally? Or is it

Hannah Stitt: 23:21

the so if you have a registration of the US Patent and Trademark Office, that's going to be a registration that is the whole United States geography as well as certain of our protectorates? There's another system called WIPO the world international patent office, okay. And so you can get different levels of international registrations as well. And that's definitely something that global companies with global reach are going to be really important to them but in the state by state level these these processes have all been around for you know, however long the states have been around but because the federal Avenue is so much broader of rights like it nobody who just no business model that I know of, except for sex work and cannabis industry, are even bothering with state registrations, right? Because, like, why would you do that? Like yeah, should you may as well just just get it the whole nation? Yeah. And so, earlier, I mentioned that you can accrue rights, a common law. Common Law is what we call the the body of law created by courts. Each state has its own common law, there is no federal common law except for two categories, which don't matter so much for us today. And like this, this common law, these rights are there, they're just harder to prove that you know, you have the definitive first use or the right things like that. Yeah.

Ronjini Joshua: 24:50

So and I've I mean, we've I think we've all probably come across some brands that had like no, I had this first No, I had those first and, and I've been in tech so like in technology That happens all the time. You know, they thought they didn't have the money to do the patent early on. They didn't do it. And then they waited and then they got screwed. Yeah. Then there's a fight. Right? Yeah. So like, Yeah, I think I mean, what you're saying makes sense. And at the price point that you're talking about, as far as it being, like, around$3,000, or, you know, even anything under $10,000, I think it's worth do it. Yeah, I think it's definitely worth doing. Especially when establishing a business is like so much more than

Hannah Stitt: 25:29

that. Yes, yes. And I think, like 3000 is probably like, the kind of like, like, my recent marks that I did, right? Because like, I'm not having to, I'm not actually cannabis plant touching. So that was an easier process. If your company is actually cannabis touching, then it might take a little bit more attorney time to get that registration through. So it would be, you know, incrementally more expensive. Um, it kind of depends, if you're a ancillary product, or a plant touching product. Yeah, if you're not plant touching, then you're good to go for it at the federal level, like what's holding you back, you know, if you're plant touching, then absolutely go for it in your state jurisdiction. And if you can have parts of your business, trademarked that, you know, you're legitimately using a commerce that are not related to the plant, then go for that as well. And at least

Ronjini Joshua: 26:17

it shows some kind of benchmark or milestone where you've done some work Exactly, yeah. As

Hannah Stitt: 26:21

it is attractive to the venture capitalists to have like it is an asset. And the with the, if you're, if you're just operating your rights are going to accrue geographically. So if you are only really a dispensary, and you're only located in one county, like San Francisco County, then that's where you'll have your your rights accruing. But you know, why not go for the whole state, even though you're not going to have dispensaries in every county, you can have rights for the whole state to make sure that somebody in LA or San Diego or maybe in Tulare, if they ever opened up their council to have some like licenses there. wouldn't be able to use your name or cause confusion in the marketplace. Right? And since especially

Ronjini Joshua: 27:02

online, Yes, everything's online. Yeah, exactly. Like

Hannah Stitt: 27:05

I've the internet is an interesting jurisdictional problem for attorneys. I think we're just like, pretending it's not a problem. But that definitely needs to be addressed. So

Ronjini Joshua: 27:16

yeah, like, how would you even I guess, I guess you could do by like, IP address. Yeah.

Hannah Stitt: 27:20

We're like figuring out like, where, yeah, where your consumers are coming from? I don't know.

Ronjini Joshua: 27:25

Yeah. But then it's like, uh, yeah, it seems like a very convoluted way of figuring out how to

Hannah Stitt: 27:30

totally people. Yeah, totally. And then like, if you're really sophisticated on the tech side, and you know, your IP is like, your, your, your IP address is, like, pinging across different drivers. It's like, okay, well, that wasn't really useful information. Yeah. All of a sudden, this person's in England. And then, you know, two hours later, they're in Colombia. It's like, Yeah, that wasn't helpful. So. So yeah, the hacking that could be done. Exactly. Yeah. So it just makes sense for people, if you do have a bit of wiggle room in the capital, and if you are going to be seeking investment, then it's something to at least look into whether or not you can get your state level or the federal level or, you know, beyond.

Ronjini Joshua: 28:07

Yeah, you know, it's funny, because I talked to someone, I want to say they're like an HR person a long time ago. And they had mentioned, like, the first thing that you need, when you start a cannabis business is a like, CPA or like accounting or finance person, and a lawyer, like, you cannot not have a lawyer, if you're in the business, and like, what are your feelings around? Like, you know, they're I think there's a lot of scrappy people and startups that are emerging in this space. And I can't believe that they all have legal representation.

Hannah Stitt: 28:42

Oh, they absolutely don't. And it's, it's, it's a problem that legal services are so expensive, right? Yeah, it's similar to the problems that are happening in the healthcare system, where it's like, why are doctors $300 an hour? Yeah, you know, and like, why won't the insurance cover it? So there's not a lot of insurance plans that are useful to get you legal services unless you, you know, been sued, then your insurer is going to hook you up with an insurance defense. But that's a pretty narrow spot, right? Like, yeah, people do want insurance or not sorry, insurance and legal service for compliance and entity formation and intellectual property licensing, those kinds of things. So to answer your question, eventually, I think that you're right. A lot of people do not have access to legal services. Part of it is that they perceive it to be too high of a cost. And it's an immediate cost. Like, when I talk to people who are deciding to open up a company, I know they don't like to hear it, but I tell them, like you need to have a legal budget and it should probably be $5,000. Hopefully, you won't get anywhere near that, you know, but it would not be unusual. If you did in order to get yourself set up with business to business contracts, get some IP licensing agreements in place after you've gone and gotten those registrations, all different kinds of stuff. It's useful to have a like You said the HR person, like it's useful to have an analysis from an attorney who works in employment or labor, and can say, you know, your, your relationships that you've got with your employees, it looks like you're calling it an independent contractor relationship. But this is actually an employment relationship under the law. So if you're independent contractor kind of gets hurt on the job, or decides that they're being poorly treated by you, then, you know, this independent contractor relationship is it's not going to hold up, right? Like if they go to the California Employment, if they

Ronjini Joshua: 30:32

want to complain, they're gonna get favored. Exactly. Yeah.

Hannah Stitt: 30:35

Yeah. So I was thinking of this industry, and also the lawyers who service it on a on a like, risk tolerance scale. I feel like

Ronjini Joshua: 30:45

how high is your risk? Yeah. Cuz most attorneys

Hannah Stitt: 30:49

are not risk tolerant. Yeah, right. Like, we're like, Oh, my God,

Ronjini Joshua: 30:52

dirt your attorneys you're following?

Hannah Stitt: 30:54

Exactly. Yeah. Or at least we want to know what all the rules are. Yeah. When we step across the line, we're like, Okay, I did it. Yeah, that would notice, you know, so, um, whereas people who I think are operators in the industry are they're really risk tolerant. Right. They're like, Okay, this is like,

Ronjini Joshua: 31:10

so risk tolerant that they don't need an attorney. Exactly.

Hannah Stitt: 31:13

Yeah. So so having them come together. It's, it's interesting. And I feel like there's a lot of a lot of growing up right now in the industry, where it's like, people are bringing their legacy cultivator knowledge, and they're, they're partnering up with major investors who expect a certain kind of sophistication from the people that are, you know, infusing the capital. And so in his learning process, I think lawyers are becoming more acceptable, especially, is expensive, you know, like, you're not going to get away with a small bill. And, you know, I have lawyers that I hire for my personal life, and I'm never happy to see that. Never. And like, so I so you helps me when I'm, you know, doing bills myself, I'm like, Okay, let me explain what this is. So that the person on the other end isn't like, Oh, God, why did you feel a bit less upset? Yeah. Right. Like, at least they know what I did for that two and a half hour time period. Yeah. And so this, I'm hoping that legal services themselves become less expensive over time, which has nothing to do with the cannabis industry in particular, it's just the Yeah, yeah, a lot of it has to do with, you know, student debt, right. Like a lot of lawyers feel like they have to charge a certain amount because they have to pay off their debt. Exactly. It's crazy. So it's like, these are not good incentives. Like, yeah, like, like, this is like if the if the national approach and strategy for like, reducing student debt and reducing like medical debt, these things would be huge. And I think we would see a lot of other benefits just across all sectors to see that these people with highly, highly trained people are able to get that training for a lot less expensive, they're able to provide services for a lot less makes a lot of sense. Yeah. And, you know, some firms, that's not what they're in it for, they're in for the money. But I think a lot of people out there would really like to be able to charge less in order to run the business and provide services and hopefully, incentivize people who are not as excited to work with lawyers to be like, Okay, well, you know, $100 an hour is a lot more palatable than 650. Yeah, right. Yeah. So you know,

Ben Michaels: 33:18

but it's not one of the goals is to get and this sounds amazing. And you sound like, so sweet and great for not wanting to charge, right?

Ronjini Joshua: 33:27

Because that makes I do charge though.

Ben Michaels: 33:29

Yeah. Yeah, but it's, but it's, uh, I mean, it seems like you know, you're you're investing the time and energy, you're getting an A, in such a perfect time, that you're going to get such a specialty that you can charge, you know, that higher rate, and people would be willing to pay it. But you're saying, even with that extra experience and everything you still would want overall to charge less?

Hannah Stitt: 33:51

Yeah, I mean, like, I would love it if I felt comfortable charging $1,000 an hour. But you know, I've been practicing law since I joined the bar in 2016. So I'm, I'm certainly not green, but I'm not I'm not 30 years. Veteran. Yeah, right. Yeah. Like, yeah, like, I think a lot of the attorneys that are able to feel comfortable charging in excess of $600 an hour. They, they they bring to the table that, you know, 30 years of experience in deal making, or deals falling apart. So So I think that I would like to find that balance where it's like I can, I can have a respectable rates. And also, you know, there's always the possibility of reducing it, because I could have my standard number and then yeah, someone and think like, oh, you know, there's reasons like equity reasons, or Yeah, like you're a woman run business or something that would maybe offer a discount, but yeah, like it would be nice to find that balance where people are really respecting the

Ronjini Joshua: 34:48

worst thing to do. And yeah, I mean, I think that's really important. I mean, that's like an industry conversation, right? That's like, it's like, how much do people value these certain sets of skills? How long it took you to get there, how much experience you've had to acquire to do it the correct way. And then for you, you're litigating. So you're winning and losing. So how much are you winning? How much are you losing? Like, that's what they're paying for. So I yeah, I mean, I don't like the cost of law. But I agree that like, you know, you kind of have to figure out, you're going to be more on the premium side, or you're going to be because that's gonna like, kind of, like, gives you the respect you kind of need. So people understand where you stand. Yeah,

Hannah Stitt: 35:31

absolutely. And I always like to think about the question of whether to hire a lawyer from the business side of things, right? On the legal side of things. My answer is, yes. Hire lawyer. Yeah. But from the business side, you know, what are you looking at here are you gonna hook yourself up with an attorney who knows what they're doing is trustworthy, and is good, is good at their job. And there may be a caveat should be made here with that risk tolerance. Yeah, scale that I was talking about. The attorneys who are providing services and have been writing services for the last, you know, however, many years, 1520 years, and longer. They are very risk tolerant attorneys. So the way that they approach problem resolution and contract drafting might be a little different than the perspective you would get an attorney at a large law firm is not really open to taking cannabis clients. So that's something to think about when you're hiring an attorney like, like, are they reputable. If you know an attorney that could help you make that assessment, that's probably a good idea. But like, just because they're inexpensive or expensive, that doesn't necessarily mean that they're going to give you great services. So important, you're really like, just like any other person that you're going to hire as a service provider for your business, to be really challenging the marketing that you might be getting from that person.

Ronjini Joshua: 36:50

So this actually segues in the perfect way to close this. So we like to give pit tips out. And so like, what are those like, things that maybe three or four things that we should be looking at, when we decide to select an attorney? Like what how can you choose that properly?

Hannah Stitt: 37:10

So one important thing was a four things, okay, so we'll be

Ronjini Joshua: 37:13

it could be whatever. Okay,

Hannah Stitt: 37:17

the the first thing that I think is important for the cannabis industry, but not necessarily important for other kinds of industries, is to hire an attorney who at least has, if they're not local to you in your county, at least they can explain to you like, I've worked with XYZ customer, or clients, who are also located in your region, because having that understanding of how the regulations work on a county by county level is really important in the cannabis industry. Doesn't matter if you're a hairdresser doesn't matter if you sell flowers like this is not a problem. So that's one, one thing to think about is like how local to you and your business? Is this the legal service provider? The next thing after that is to have a really candid conversation with them about how comfortable they are being wrong. Because risk tolerance being a problem among attorneys. attorneys don't want to say, I don't know, I'm really comfortable saying I don't know. And sometimes clients are like, well, I don't want to hire you. Because you just said, Oh, I don't know. Right. But you're not hiring because I mean, because I know all the answers, you're hiring me because I know how to articulate a question, translate that question into how we ask questions in legal terms, and then go through the steps of making sure that I am checking off all the possible areas of law that could touch that question. So like, I'm not selling to you the information I have in my head, I'm selling to you my processes in how to solve legal problems. Okay, so if the attorney you're talking to is talking about how, Oh, I've got so many Canis business clients, or cancellation clients, and I, you know, I did this deal and that deal and that deal. That to me is like, Well, did you actually tell me that you know, how to, like, I have a unique question to my business, that I don't think you've answered before for anyone else, like, can you be creative and helping me solve this problem and actually, like giving a risk assessment? And if they're not comfortable saying, I don't know, then you're probably not hiring an attorney. That's good for you as a cannabis business operator? Because there are lots of things we don't know. Yeah, because there's no regulations and PS knew there's no one to ask. There's no right change, right. Yeah. And like in a lot of areas of law, like in the American body of law is inherited from England. So our property laws come from William the Conqueror, that's over 2000 years that we've been developing what it means to hold a legal equity illegal and equitable interests in peace property, right. So like, okay, 2000 plus years is an area where lots have attorneys feel comfortable working in a case law? There's lots of people to ask. But you know, this is cannabis. So there's that's just doesn't exist. Yeah, your attorney is not willing to start making relationships with regulators or city council members or just other attorneys that they can ask questions to, then that's probably somebody that is not going to give you the most bang for your buck. Got it. And that's the kind of thing I would really like, I would encourage everyone to really challenge like, Challenge Challenge Challenge Challenge. Please don't be the kind of the kind of client that doesn't listen, once the analysis has been presented. All the citations had been provided. Definitely listen after that work has happened. But in the in the consultation interview, like if they're just like, wildly confident that they're going to be able to answer every question, that individual doesn't have enough experience in the candidate. You're

Ronjini Joshua: 40:44

like, no, yeah, no, yeah.

Hannah Stitt: 40:47

Like those of us that have been serving the industry for a long time, are comfortable saying, you know, we're gonna have to get back to you about that, like, I'm going to have to make some phone calls. And my initial instinct is XYZ, but I want to make sure it's not ABC. Yeah. So

Ronjini Joshua: 41:01

I think it's really important to know like that, that the the lift attorney that you're hiring for an industry, that's not like standardize should have questions. Yes. And you know, should be eager to learn them, the answers to them. I like that the part that you mentioned, it's really, really purchasing the process, the way of like figuring out how to solve the problem instead of already knowing the answer, right? Because otherwise,

Hannah Stitt: 41:25

you just go to legal Legal Zoom. Right? Yeah. You know, and I can't tell you how many times I've gotten Legal Zoom entities. And I'm like, What the? Yeah, and I've seen some contracts where I'm like, alright, well, it was really great that your criminal attorney took an operating agreement from an LLC, and a bylaws from a corporation. And like a whatever we're gonna call this from a collective from 2015. merged, it said it wasn't a contract, but you did have to sign it. So it's like, you know, this kind of like, it doesn't make it doesn't make any sense. Yeah. So like, like a Frankenstein? Exactly. Yeah. So it's like, if you're, you know, just challenged someone being overly confident, right, like, they should be a little more cautious. They should have a little, they should be burned a few times. But like, I've definitely given advice to a client that in 2015, or 2016, that was the best advice that they could get out there. But in 2018, I'm not giving that same advice. Right, of course, right. Like, like, it's not a long time period in between, like for lawyers, like a lot of times, you know, three years. That's nothing. That's nothing like you can I sometimes like cite cases from 1997. Like, yeah, still good law. Right. Yeah. So it's just really different to provide services industry. And so yeah, definitely be cautious and Challenge Challenge Challenge Challenge.

Ronjini Joshua: 42:39

I love it like this is I could ask you so many questions that will lie so and I think law is so mysterious to so many people, which is terrible. Yeah,

Hannah Stitt: 42:47

it's terrible. It should be reachable. It should be all of us have rights. All of us should know how to navigate it. Yeah. And it's it is it's esoteric. It's shouldn't be that way. But I'm not the queen of the world. So I can't change it right now. But

Ronjini Joshua: 42:58

they could contact you to find out. Yeah, yes. So we will make sure to have all your information in the show notes. But like, Do you have a website? Yeah, sure. Sure.

Hannah Stitt: 43:06

Yes, yes. It's techtonic law.com. So Tecton I see La w.com.

Ronjini Joshua: 43:13

Okay, and you guys. So are you a firm of what are you a firm of money, are you We're

Hannah Stitt: 43:18

rolling. We're real new. We I've you know, been litigating for a while but I just opened I just launched this firm with my business partner and law partner, Paige Pembroke. She also specializes in electro of intellectual property and has a lot of background in the cannabis industry. So we we haven't even officially launched it like we only had our party. Yeah,

Ronjini Joshua: 43:37

we just call that because we've been, uh, you know, we've been in the past. Yeah, have a party, right. I

Hannah Stitt: 43:42

know. It's like a group of 10 Whoo hoo. Even that's like pushing it.

Ronjini Joshua: 43:47

Yeah. Yeah. Well, that's awesome. Thank you so much for sharing your information with us. Like, this is like yeah, I love this information. Like I think this is like pertinent things people should know that they're scared about also, you know, it's a really big source of fear. So

Hannah Stitt: 44:03

yeah, absolutely. I had a great time talking to you. So you know, if you want to hear more about the law, let me know. Yeah,

Ronjini Joshua: 44:08

absolutely. Thank you. Yeah. The Green Room podcast is brought to life by green seed PR, the cannabis green tech focus PR agency, and a dedicated production team of editors mixers and show Booker's. A huge thank you to the vessel team for providing their studio for our recordings. Don't forget to subscribe and share the green room podcast with friends, colleagues, and family. That way you'll never miss an episode and we keep the lights on. If you're feeling extra generous, please leave us a review on your favorite podcast listening platform. You can also find us on Instagram at Green TPR answered live video versions of all of our podcasts on YouTube. Would you like to be on the guests on the show? Or do you have a great guest referral? Awesome. Submit your guests at Green CPR comm slash the hyphen green hyphen room. Thanks for listening and be well