For lawyers, the cannabis industry is a great equalizer. Thanks to the legalization of marijuana (in some shape or form) across 29 states and D.C.—and particularly the recent wave of legalization for recreational marijuana—the cannabis industry has emerged as a unique corner of the legal world where new and experienced lawyers alike have equal footing. This presents a distinct opportunity for fresh-out-of-law-school types looking to get their foot in the door and create a name for themselves.
But conflicting state and federal marijuana laws have also created an atmosphere of confusion for lawyers, many of whom now worry that representing a cannabis business could land them in legal trouble.
Lawyers representing cannabis businesses are left wondering: am I breaking the law?
This legal grey area is nothing new for the cannabis industry. Operating a cannabis business in a marijuana-friendly state still depends on the tacit consent of the federal government’s judicial branch, thus-far enshrined by the Rohrabacher-Blumenauer amendment (a.k.a. Rohrabacher-Farr amendment). But the federal government’s decision not to target cannabis businesses in states with legal marijuana laws remains capricious, particularly given Attorney General Jeff Sessions’ well-known disdain for the legalization of marijuana.
As a result, states with legal marijuana laws have conflicting opinions about whether lawyers can advise clients in the marijuana industry without violating rules of professional conduct.
The state Board of Professional Conduct in Ohio, for example, recently warned lawyers that advising clients to take actions that break federal law, even if permitted under state law, is technically a breach of professional conduct.
As ABA Journal reports, the Board’s ruling found that, “Unless and until federal law is amended to authorize the use, production, and distribution of medical marijuana, a lawyer only may advise a client as to the legality of conduct either permitted under state law or prohibited under federal law and explain the scope and application of state and federal law to the client’s proposed conduct.” Basically, lawyers cannot advise cannabis businesses on which actions to take, only on the legality of these actions as they pertain to state and federal law. This would require lawyers to engage in semantic gymnastics, forcing their clients to constantly read between the lines of their advice, and creating a tense line of communication between lawyers and clients.
The New Mexico State Bar Association has taken a similar approach to Ohio, warning lawyers that working for clients in the medical marijuana industry might violate the state’s rules of professional conduct—even though medical marijuana was legalized in 2007—due to federal drug prohibition.
In California, a San Diego attorney, Jessica McElfresh, ran into this problem when she was charged for being an accessory to a crime in her representation of a licensed cannabis business, due to an email she sent to her client in 2015. McElfresh and her client both believe the email was taken out of context, and the case has elicited fierce and widespread criticism for its prosecutorial overreach.
By and large, however, lawyers and state courts alike seem to be turning a blind eye to these technical violations of professional conduct rules. Save for McElfresh, the vast majority of lawyers advising clients working in the legal marijuana industry have not experienced major legal backlash.
Some states have even explicitly sided with cannabis businesses and their respective lawyers on this issue. The State Bar associations of Arizona and Illinois, for example, have determined that lawyers operating in the legal medical marijuana space should be granted the same privileges as lawyers working for clients in non-marijuana related industries.
Unfortunately, these conflicting opinions between states and general legal confusion have become hallmarks of the nascent cannabis industry. For lawyers operating in this industry-wide grey area, the question is less about legality and more about each state’s prosecutorial agenda. So while the cannabis industry has presented a unique opportunity for lawyers and cannabis entrepreneurs alike, for now, it also comes with a price: uncertainty.