Cannabis M&A: Common Representations and Warranties

In my last post in this series, I ran through a detailed list of some of the more common conditions to closing you’ll see in the run-of-the-mill cannabis business purchase. Today, I want to do something similar, but instead with representations and warranties.

In M&A contracts, the parties make various legal promises. Promises to do something in the future — like a seller’s promise to operate the business in the ordinary course prior to closing — are usually referred to as “covenants”. Promises about things that have occurred in the past or the state of the business or assets being sold at the time of signing or closing are called “representations and warranties”. Sometimes the lines can get blurred between covenants and reps and warranties, but for the purpose of this post, we won’t get into that.

One big footnote here is that reps and warranties do in fact apply to future conduct or status in some cases. Most cannabis M&A transactions have a gap of time between signing and closing. A buyer will want to be sure that the reps and warranties made at the time of signing — like the company having paid all taxes — are still

Read More Here…

Share on facebook
Share on twitter
Share on reddit
Share on pinterest
Share on email


Bud Digest

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top