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  • Writer's pictureBelle Terre

How to start a sole proprietorship in the Cannabis industry

Updated: Aug 8, 2022

Gold legal scale with a cannabis leaf on the left side and globe on the right side.

Many entrepreneurs hastily begin their business as a "sole proprietor". The thing is, a sole proprietorship is not a business entity. It is in fact, a sole nightmare. The cannabis industry already comes with many risks, rules, and regulations. Why would you want to subject yourself to even more risks?

Entering into the cannabis industry as a sole proprietorship is a huge no-no! A sole proprietor is a person who is holding themselves out as business. They are not registered with the Secretary of State; there is no corporate veil protection; there is commingling of funds; and all liabilities and debts will be the personal responsibility of the entrepreneur.

That means that when something goes wrong, and it will go wrong, then the entrepreneur is on the hook for all debts and liabilities. In a nutshell, if you are sued the courts and the person who is suing you can come after your house, car, personal bank account and any other assets you have.

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