b'Cannabis Lending continued from page 17Financial institution or not, all lenders Insist on collateral, whether it be realpreventing foreclosure.These risks do should take certain precautions whenproperty or personal property; and not make lending to the cannabis industry lending to a cannabis business.Many Consider requiring a personalimpossible, but they must be considered of these precautions are exactly theguaranty. and adequately addressed before making precautions that lenders already take whena lending decision.making any business loan.Lenders shouldAdditionally, before making a cannabis consider the following, which should notloan, lenders should have policies andUltimately, until cannabis is legal in all be considered an exhaustive list, whenprocedures in place designed to protect50 states and at the federal level, lenders considering whether to make a cannabisthe institution.The lender should alsolending to the cannabis industry are going business loan: be sophisticated enough to understandto face certain uncertainties and potentialThoroughly evaluate operationalthe legal obligations related to cannabisrisks.history; lending and to meet those requirements. If you have any questions about cannabisThoroughly vet the owners of theLenders should also remember that,lending and the SAFE Banking Act, please cannabis business; because cannabis is illegal at the federaldo not hesitate to contact Leslie Baird atRequest financial projections andlevel, there is the risk that the federallbaird@wrightlegal.net or Robert Finlay at review the basis for those financialgovernment may seize the product, shutrfinlay@wrightlegal.net.projections; the business down, put the owner/operator/ Review licensees; borrower in jail, and/or seize the property.Disclaimer: The above information is Additionally, and although it seems unlikelyintended for information purposes aloneRequest operating agreements; at this point in time, the federal governmentand is not intended as legal advice. Understand the businessmay also pursue lenders making loans to outstanding financial obligations; the cannabis industry.These risks increaseLeslie Baird is an Associate Attorney at WFZ.Review lease(s); the chance of default and, in the event ofRobert Finlay is a foundingseizure of the property, tie it up therebyPartner of WFZ.Page 18Spring 2020Points of Interest'