Back in the gray days of the medical cannabis market, when the law was murky and risk was everywhere, I was talking to a prominent cannabis attorney from San Francisco and asked him for advice about safe cannabis distribution strategies.

I was expecting the lawyer to tell me what most lawyers did back then, “There is no safe distribution strategy, are you crazy? Never drive with cannabis or do anything else with it for that matter, under any circumstances.”

Surprisingly, the attorney told me that most of the cases his law firm saw didn’t come as a result of traffic stops, but in fact were caused by disagreements between ex-partners, ex-employees, and ex-girlfriends.

People would drive around for years carefully evading detection, only to turn each other in, out of spite and over petty grievances. Of all the threats facing cannabis entrepreneurs, at the end of the day, it was self-sabotage and small squabbles that were bringing most of them down!

A toxic partnership, relationship, or company culture, unfortunately, can still have a disproportionate impact on your legal business. Even a seemingly great and promising plan can fail given the right combination of divisiveness and distraction.

As a startup, you need to focus massive amounts of energy on your business, and you can’t do that if you’re spending your time endlessly litigating internal disputes. It’s hard to quantify the opportunity cost of having to break up arguments between two partners or employees that are fighting over who should get credit for an idea that is terrible, to begin with.

While it’s true that any partnership — even the most promising — can fall apart and create obstacles to achieving success, there are actions that you can take to mitigate things inevitably going wrong.

Just about 100% of the people Bob knows and talks to in the cannabis industry have a story of being screwed over by someone close to them.

Probably the most important thing you can do to proactively prepare for the eventuality of a business marriage falling apart is to get everything in writing up front, starting from the very beginning.

Most entrepreneurs are by nature, optimistic people and believe that things will come out right for them in the end, if they work their vision hard enough. This is why so many people take advantage of entrepreneurs.  

With this optimism, entrepreneurs will often put everything they have into a project, motivated by verbal commitments or vague promises from partners or employers for future benefits down the road.

This situation is like a train wreck taking place in slow motion. Eventually, there will be a disagreement over a verbal conversation. The parties will remember things differently. One partner or employee feels cheated and taken advantage of. That person could then work to consciously erode the business from the inside out.

It’s a bit like having termites but only worse… Now it is humans you’re dealing with. Much like humans will trash the environments we live in and call home; with equally reckless abandon, humans will wantonly destroy the places where we work.

With the right team in place and working together, a company can take a bad product or idea and find a way to be successful. In a toxic work environment, you can have the best product or service in the world and still fall flat on your face.

Employees, employers, and entrepreneurs — we know this was just mentioned, but for God’s sake:

PLEASE GET EVERYTHING IN WRITING!

If you have a job offer, insist on an employment contract.

Don’t count on your organization to be organized enough to remember to give you a regularly scheduled performance bonus or pay increase either. Get it in writing and remind them as needed.

If you are the employer, you want to be responsible with employment contracts on your end. To protect your employees and to protect the company, you should have everyone sign employment policy agreements, NDAs (non-disclosure agreement), medical disclosure forms, eligibility to work forms, and more!

Another mistake that often happens in new startups, especially in this industry, is that the founders won’t have clearly defined roles and/or responsibilities.

            When you map out these responsibilities on paper for yourselves and collectively as a team, you can hopefully come to a consensus and create team chemistry, by having everyone be accountable to each other, and knowing what to expect of each other in their own words.

            This is also a great way to allow employees and partners to self-identify whether or not they intend to bring anything of value to the table, allowing you the opportunity to ‘weed’ out the extraneous positions from your company like your ‘Chief Taco Procurement Officer’, the ‘Vice President of Intercompany Gossip’, as well as your ‘Senior District Manager of Complaining about Coworkers’.

This might not seem like a problem right out of the gate when everyone on your startup team is wearing ten thousand different hats and doing whatever it takes to get the job done that day but ‘startup mode’ won’t last forever.

Eventually, the team members will need to settle into specialties. If these aren’t clearly mapped out in advance, there is going to be great confusion and hurt feelings over who is responsible for what.

One of Bob’s weaknesses as a boss was not delineating clearly defined roles for everyone. He felt like it was a knee-jerk reaction from his time as an anarchist writer turned cannabis entrepreneur. Now he had to adopt the systems he rebelled against when he was younger, as his idealism had now flipped 180 degrees to celebrate the virtues of making a lot of money.

In addition to clear job descriptions, your business is also going to need a clear organization chart and chain of command. It’s important that your company has an effective process for making decisions. If you’re currently in charge, who takes the reins when you’re out of the office?

The last thing you want is the insanity that occurs when no one is in charge. Think Lord of the Flies. You might assume that your employees are nice, rational people who will get along with each other and act responsibly while you’re away, but when things go wrong and the rule of law has broken down in your office, then all bets are off!

As serious problems occur, the pressure increases, chipping away at human layers of politeness, courtesy, and civility, like coats of paint, peeling off a wall to reveal a hidden picture beneath, exposing underneath, the image of a base, savage animal, a barbarous beast, capable of unrivaled acts of terrible cruelty when frightened, uncomfortable, or ‘hangry’. It’s safe to assume that at any given time, any person you meet, is just one, really long traffic jam or elevator ride away from cannibalism.

Not only do your employees need to understand a clear chain of command so that they are not confused by contrary instructions from two managers, or no instructions from no managers, you and your business partners will need that clarity in an org chart as well.

If you and your partners each have equal say in the business and make major decisions by a board vote, you will still need to select a CEO (chief executive officer), President, or GM (general manager) from your group to execute the board’s shared vision between meetings.

The board should allow the CEO to handle day-to-day decisions and address any significant changes, of course, at regularly scheduled board meetings.