Cannabis M&A: Disclosure Schedules

My last post in this series, which ran a few weeks ago, went over some of the more common representations and warranties you’d see in the average cannabis M&A transaction. In that post, I briefly mentioned disclosure schedules, which are an integral part of a purchase agreement and its reps and warranties. Today, I’ll get into the in more detail.

The purpose of a disclosure schedule is – no surprise – to disclose things to the other party to the transaction. Usually, disclosures are made by the seller but sometimes a buyer may make them. These are used in addition to standard due diligence inquiries and basically bridge due diligence disclosures directly into the purchase agreement.

There are a lot of ways disclosure schedules can be used, but I’ll focus on two of the more common ones. First, a disclosure schedule may be used to provide a specific list of something that is referred to in a provision of the purchase agreement (including in a rep and warranty). For example, a purchase agreement may state something like “Company owns the assets identified in Schedule X”. Then, the schedule would list out the assets. This allows parties to keep purchase agreements

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