Use A Lawyer For Drafting Cannabis Deal Term Sheets

A lot of people want to save a buck during contract negotiations. These folks usually do not not use a lawyer for drafting term sheets or other initial matters. Sometimes, this can work out well. For bigger or more complicated deals, or for deals with a difficult opponent, this can be a bad idea. Let's look at why.

What is the point of a cannabis deal term sheet?

A term sheet (also referred to as a letter of intent or LOI) is an outline of key deal points that the parties sign before negotiating a final contract. You won't see them in all deals. They are used frequently in bigger, more complex deals like M&A or finance transactions. They can be binding contracts, but this is usually a very bad idea. A non-binding document can be very useful, as the parties will have a roadmap for the deal and will have hammered out key points before undertaking the expense of diligence and drafting.