For years and years, our cannabis lawyers have assisted with due diligence on all kinds of cannabis transactions from sole proprietorships to public companies. So that means we are intimately familiar with the mechanics of how the due diligence process works on a series of different transactions, and that we have seen all kinds of shenanigans and shady misconduct during due diligence. Today, I’m going to talk about how diligence works, and some of the more common red flags we see during the process.

Not everyone is intimately familiar with the due diligence process, even though it’s inherent in most transactions. Due diligence is the process where one party to an agreement vets the other side or some asset of the other side (usually by requesting information and documents). In some deals, both sides perform diligence on the other. Some common examples include:

Investment deals where investors perform diligence on the cannabis company they will invest in Mergers, acquisitions, or other purchases of equity in a cannabis company where the acquirer performs diligence on the target company Asset purchases where the buyer performs diligence on the assets being purchased and in some cases, the owners Real estate purchases where

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