Emerging markets
New markets differ in what they regulate but not in how: the same questions decide who may hold a license, what counts as a transfer, what an advertisement may claim, and whether a bank will open an account.
Markets get regulated in a recognizable order. A statute authorizes an agency, the agency writes rules, and the rules decide who may hold a license, what counts as ownership, what counts as a transfer, what an advertisement may claim, and what records have to exist. The subject matter changes from one market to the next. The order does not.
That order is the practice. DPS Law has advised cannabis and hemp businesses since 2013 and does the same structural work in telehealth and management services organizations, peptide practices, physician-owned models, psychedelics, kratom, hemp-derived beverages and digital assets. A plant, a platform, a prescription and a token are different businesses. The questions a regulator asks about ownership, control and transfer are close to identical.
David P. Sheehan is licensed to practice law in North Carolina and Virginia. Where a matter requires admission elsewhere, or turns on the rules of an agency in another state, counsel admitted in that jurisdiction is brought in. DPS Law scopes the work, selects co-counsel and stays the point of contact.
Where the rules are still moving
A market with settled rules is a compliance exercise. A market whose rules are still being written is a structuring problem, and the structure is what a regulator reads years later.
What the engagement covers
Ownership is defined by the license, not by the cap table
License applications commonly require disclosure of the parties holding an interest in the applicant, the sources of its funding, control of the premises, and background information for named individuals, and the more heavily regulated regimes trace funding back to its origin. Many regimes count options, convertible notes, profit interests and board seats as ownership. That list is settled before filing, because rebuilding it afterward means an amendment and a second review.
Approval of a transfer is sequenced before closing, not chased after it
Where control of a licensed entity is regulated, moving it generally requires the regulator's consent in advance. The drafting work is making approval a condition precedent and papering the interval: who operates the business while the file sits, what the regulator is told and when, what happens if consent is refused, and how long the parties stay bound.
A raise into a licensed entity runs two separate owner screens
Securities law governs how an offering is made and what is disclosed. The license governs who may hold an interest at all. Rule 506(d) takes away reliance on Rule 506 where a covered person has one of the listed convictions or orders. The covered persons include the issuer, its predecessors and affiliated issuers, its directors, executive officers and other officers participating in the offering, general partners and managing members, promoters, compensated solicitors, and any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities calculated on the basis of voting power. There is no single look-back. Convictions reach back ten years, or five where the person is the issuer, a predecessor or an affiliated issuer; injunctions, cease-and-desist orders, Regulation A stop orders and Postal Service false representation orders reach back five years; fraud-based final orders of a state or federal regulator reach back ten. Commission bars, other SEC orders and SRO expulsions carry no look-back at all — they disqualify for as long as they remain in effect at the time of sale. Events before September 23, 2013 do not disqualify at all; they are described to purchasers under Rule 506(e). Rule 506(d)(2)(iv) provides an exception where the issuer establishes that it did not know and, in the exercise of reasonable care, could not have known of the disqualification. Rule 504 carries its own separate bad-actor provision at 17 CFR 230.504(b)(3). Licensing regimes screen the same people again on their own terms.
Rules change on a published schedule that can be read before it binds
In North Carolina a permanent rule approved by the Rules Review Commission becomes effective on the first day of the month following the month of approval, unless the adopting agency specifies a later date or the Commission receives written objections under G.S. 150B-21.3(b2). Those objections must come from ten or more persons, reach the Commission no later than 5:00 p.m. of the day following the day the Commission approves the rule, and clearly request review by the legislature in accordance with instructions posted on the agency's website. Objections meeting those conditions delay the rule under G.S. 150B-21.3(b1). Introducing a disapproval bill delays it further; the rule is stopped only if a bill specifically disapproving it is ratified. Comment periods and Commission agendas are public, so a change is visible before it binds.
Advertising in a new market is read by a regulator and by a plaintiff
G.S. 75-1.1 declares unfair or deceptive acts or practices in or affecting commerce unlawful, and G.S. 75-16 provides that where damages are assessed, judgment shall be rendered for treble the amount fixed by the verdict. Sector rules sit on top of that: what a claim may say, where it may run, who may appear in it. Substantiation is assembled before publication, because it is requested afterward.
Banks price an ownership chart before they open the account
Under 31 CFR 1010.230 a covered financial institution identifies the beneficial owners of a legal entity customer at account opening from a certification the customer provides, and verifies the identity of the individuals named under risk-based procedures. Two prongs are collected: each individual who owns 25 percent or more of the equity interests, which can yield no one at all, and a single individual with significant responsibility to control the entity. The rule excludes a list of entity types from the definition of legal entity customer altogether. It is an identity check on named people rather than an audit of the cap table, but layered holding companies, trusts and foreign holders still turn account opening into a project, and payment processors run their own review on top of it.
Which forum hears a licensing dispute is decided by the statute, not by preference
G.S. 150B-38(a)(1) places occupational licensing agencies under Article 3A of the Administrative Procedure Act, where the agency itself hears the case and there is no petition to the Office of Administrative Hearings. Agencies outside Article 3A run under Article 3, where a contested case is begun by petition at the Office of Administrative Hearings. The two routes carry different first filings and different deadlines, so the forum question is answered at the top of the matter rather than on the way to it.
Where the firm has done this work
Cannabis and hemp, where the firm has worked since 2013
This is the longest-running part of the practice, and the reason it keeps its own page. The federal hemp definition was narrowed by P.L. 119-37, enacted November 12, 2025, with effect from November 12, 2026, and North Carolina's own position continues to move. What a regulator holds an operator to is the structure described in the filings.
Telehealth structures answer to the state where the patient sits
Care is generally regulated where the patient is located, so each additional state is a licensing question before the first consultation rather than after it. The answer may be full licensure, an expedited pathway such as the Interstate Medical Licensure Compact, which North Carolina joined and which produces separate state licenses rather than one multistate license, or a particular state's telehealth registration or consultation exemption where it has one. Corporate practice of medicine rules decide who may own the clinical entity and who may direct clinical decisions. The management agreement is where those lines are drawn.
Peptide practices depend on federal lists that keep being revised
What a practice can offer depends on what a pharmacy may lawfully compound. Under section 503A a bulk drug substance qualifies only if it meets a USP or National Formulary monograph, is a component of an approved drug, or appears on the FDA's 503A bulks list; section 503B outsourcing facilities work from a separate clinical-need list. In April 2026 the FDA announced that twelve substances would come out of Category 2 of its interim bulks policy, and on 23 and 24 July 2026 the Pharmacy Compounding Advisory Committee recommended six of them for the 503A list. Neither step adds a substance to it, which takes notice-and-comment rulemaking not completed as of August 2026. Sourcing, the pharmacy relationship, prescribing protocols and advertising are structured around the current position and revisited each time it moves.
Physician ownership is a North Carolina statutory limit, not a preference
Shares in a North Carolina professional corporation rendering medical services must generally be held by licensees, meaning individuals licensed to render the same services (G.S. 55B-4(2), 55B-6), and the licensing board certifies that the ownership complies. That is subject to the exceptions written into G.S. 55B-6 and to the multi-professional combinations G.S. 55B-14(c) permits. Comparable limits reach a professional limited liability company through G.S. 57D-2-02. A non-clinical owner takes its economics through contract instead.
Psychedelics sit between a federal schedule and a handful of state frameworks
Psilocybin and the other classical psychedelics remain Schedule I controlled substances under the federal Controlled Substances Act. Separately, the FDA has granted breakthrough therapy designation to psilocybin programs, and Oregon, Colorado and New Mexico have created state-licensed frameworks — supported adult use in Oregon and Colorado, and a medical program under New Mexico's 2025 Medical Psilocybin Act — none of which changes the federal schedule. That is a field where a state authorization and federal law point in different directions, and where entity, ownership, insurance and advertising questions arrive well before any approved product does.
Kratom is regulated by divergence rather than by one rule
Kratom itself is not a federally scheduled controlled substance. The FDA has not approved it for any use, has issued warning letters over 7-hydroxymitragynine products, and has recommended that concentrated and synthetic 7-hydroxymitragynine be controlled; as of August 2026 the DEA has published notices of intent to place 7-hydroxymitragynine above a specified threshold, along with mitragynine pseudoindoxyl, MGM-15 and MGM-16, temporarily in Schedule I, with a temporary scheduling order able to issue at any time and to take effect on the day it publishes. States diverge sharply: some prohibit the substance, some regulate age of sale, testing and labeling, and North Carolina has had bills of both kinds before it without enacting either. The federal position and each state position are read together, and both are moving.
Hemp-derived beverages fall under whichever regime a state assigns them
A hemp-derived beverage sits where three sets of rules meet: the federal hemp definition, which on November 12, 2026 moves to a total-THC standard under P.L. 119-37, caps a finished consumable product at 0.4 milligrams of total THC per retail container and excludes cannabinoids synthesized outside the plant; a state's consumable hemp rules; and a state's alcoholic beverage licensing system, which Tennessee, Kentucky and Alabama among others have extended to these products and which North Carolina has considered legislation to use. Which regime a product falls under decides who may make it, who may move it and who may sell it, and the answer differs by state for the same can.
Digital assets are a licensing question before they are a technology question
North Carolina's Money Transmitters Act defines money transmission at G.S. 53-208.42 to include maintaining control of virtual currency on behalf of others, which places a range of custody and transfer businesses inside a state licensing regime. At the federal level the GENIUS Act, signed in July 2025, limits the issuance of payment stablecoins to permitted issuers under federal or qualifying state supervision, and takes effect on the earlier of eighteen months after enactment, which is January 18, 2027, or 120 days after the federal banking regulators issue final implementing rules; those rules are still in proposal, so the January 2027 date is the one to plan against, while the securities and commodities treatment of other instruments continues to be litigated and legislated. The threshold work is establishing which of those regimes a given instrument and a given business model fall into.
Common questions
What counts as an emerging market for this practice?
A market where the rules deciding who may operate are new, incomplete, or being rewritten while people are already operating. The firm's work in that setting is cannabis and hemp, telehealth and MSO structures, peptides, physician-owned models, psychedelics, kratom, hemp-derived beverages and digital assets. The common feature is not the product. It is that ownership, control, transfer and advertising are all regulated at once, and the regulation is still moving.
Is this the same as the firm's cannabis work?
It is the same work. Cannabis is where the firm has the longest record, beginning in 2013, and it keeps its own page because the federal and state position there is specific to it. The structural questions are what carries across: what an application has to disclose, how control is defined, when a transfer needs approval, and what the advertising may say.
Our license renewal is pending and the term is about to end. Can we keep operating?
Under G.S. 150B-3(a), when an applicant or licensee makes a timely and sufficient application for issuance or renewal of a license or occupational license, including payment of any required license fee, the existing license does not expire until a decision on the application is finally made by the agency, and if the application is denied or the terms of the new license are limited, not until the last day for applying for judicial review of the agency order. The protection depends on the application being both timely and sufficient, so the filing date and the completeness of the submission both matter.
What happens when a North Carolina agency denies or revokes a license, and does the firm take that work?
The firm takes contested-case work, and the first question is which route the statute assigns. G.S. 150B-38(a)(1) places occupational licensing agencies under Article 3A of the Administrative Procedure Act. Under Article 3A the agency itself holds the hearing, conducted under G.S. 150B-40(b) by a majority of the agency, and under G.S. 150B-40(e) an agency that is unable or elects not to hear the case may request an administrative law judge from the Office of Administrative Hearings to preside and issue a proposal for decision, on which the agency then makes the final decision after the parties have had the opportunity to file exceptions and present argument. There is no petition to the Office of Administrative Hearings in that route, and the time to act comes from the agency's own enabling statute and rules rather than from G.S. 150B-23(f). For an agency governed by Article 3, a contested case is commenced by filing a petition with the Office of Administrative Hearings, and G.S. 150B-23(f) sets a general limit of 60 days commencing when notice is given of the agency decision, with that written notice required to state the right to a contested case hearing, the procedure and the time limit for filing. Under either route, a party aggrieved by the final decision who has exhausted administrative remedies is entitled to judicial review under G.S. 150B-43 unless another statute provides adequate procedure for review. Separately, G.S. 150B-3(c) permits summary suspension where an agency finds that the public health, safety or welfare requires emergency action and incorporates that finding in its order.
Do you take work in a market not listed on this page?
Sometimes, after a conversation about which agency regulates it and what that agency has actually published. The firm does not hold itself out in a sector it has not worked in. David P. Sheehan is licensed to practice law in North Carolina and Virginia; where a matter requires admission elsewhere, counsel admitted in that jurisdiction is brought in and the firm stays the point of contact.