Marijuana Business Magazine November December 2018

SOLE PROPRIETORSHIP What is it? If you want to run your business on your own, a sole proprietorship could be the right structure for you. What are the pros? • These entities are the easiest to set up, often requiring little to no paperwork – a welcome factor given all the regulatory red tape marijuana companies already face. • Your income is reported on your personal income tax return. What are the possible pitfalls? • You have no limited liability protection, meaning your personal assets are on the line without any protections from the business entity. For exam- ple, if a client or vendor decided to file a lawsuit against your business, they could go after your personal assets. • Raising capital for your business can be tough, because lenders are more hesitant to offer loans to these entities. That can be an important con- sideration for MJ companies, in particular, given banks’ unwillingness to lend to cannabis businesses. November/December 2018 • Marijuana Business Magazine • 97 Cultivation Rooms ISO Cleanroom Compliance