Manatt offices in Washington. Credit: Diego M. Radzinschi / ALM

Manatt, Phelps & Phillips has become the latest Big Law firm to publicly join the green rush, announcing Monday that it has formally launched a cannabis-focused practice team.

The 45-member group, spanning a dozen practice areas, will be led by Los Angeles-based real estate partner Anita Sabine.

Sabine said the firm has represented clients in the cannabis space for nearly a decade, but the recent hire of former financial regulator Jan Owen helped spur the announcement of the group's formation. Owen, who will serve as senior adviser to the firm's financial services group, worked on cannabis banking issues as the former commissioner of the California Department of Business Oversight.

"It makes sense to say, 'Hey, this is the time to formally launch this and let everybody know this is who we are and this is what we've been doing,'" Sabine said. "And we're going to continue to do it."

Manatt joins a growing list of major U.S. law firms, including Davis Wright Tremaine, Duane Morris, and Baker Botts, that have launched specialized cannabis practices, expanded their existing work in the space or at least acknowledged consulting and advising clients in the still federally illegal industry. Last month, Sheppard, Mullin, Richter & Hampton said it was assigning 70 lawyers across 12 of the firm's offices to create a cannabis practice. A San Diego-based real estate partner will lead the team.

Several Manatt lawyers this week will participate in a webinar focused on banking and cannabis, and the firm has regularly posted advisories about big developments in the legal space, but Manatt has not done higher-profile event sponsorships and its attorneys are not regular speakers at industry conferences. Sabine said it was never the firm's intention to keep a low profile on its cannabis-related work, which started on a small scale.

"Really at the time we embarked on this practice, it was in its infancy. We've seen a lot of changes over the decade," she said.

Worldwide spending on legal cannabis is expected to reach $16.9 billion this year, according to Arcview Market Research. The U.S. market alone for hemp-derived CBD, the non-mind-altering compound making its way into everything from salves to dog treats, could hit $22 billion by 2022, according to an estimate by the Brightfield Group.

Sabine declined to identify Manatt's cannabis and CBD clients but she said the related work crossed many of the firm's practices and included real estate financing deals, cross-border mergers and acquisitions, equity investments, regulatory compliance, intellectual property, marketing and advertising advice and celebrity licensing.

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Given marijuana's Schedule 1 classification by the federal government, some big firms have chosen not to work with state-legal cannabis businesses. Others work only with ancillary businesses or in operations based in Canada, where marijuana is legal on the federal level.

Manatt has no dark-line rules against taking on particular clients or areas of work, Sabine said, and the firm serves both plant-touching cannabis operators and companies that do business with them.

"We underwrite our clients. We know who we're doing business with and we work within the law," she said. "So there's no subject matters or types of clients that are off limits for us. It's just a matter of making sure that your client is the type of client you want to work with."

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