The era of marijuana’s underground economy might be coming to an end. More than 20 states and the District of Columbia have legalized growing, processing, transporting, selling and/or using marijuana for medical purposes. Two states, Colorado and Washington, have also legalized recreational and personal use. The Department of Justice has made noises about backing off on prosecuting certain marijuana crimes.
As a result, there is a growing demand for legal services associated with the burgeoning marijuana industry. Possible players include
- growers
- retail sellers
- lenders
- tenants and landlords
- technology inventors
- equipment manufacturers.
Great news for a legal industry in the doldrums. Yippee! Hop on the gravy train!
Not so fast, you would-be rain makers. The grass is not always greener, and there are hazards for the unwary lurking among the weed(s). In the fog of all this pot-mania, it is easy to forget something significant about marijuana (I’m out of metaphors) — it’s still illegal.
Marijuana is a Schedule 1 drug, and possession, sale, and distribution are federal crimes. Therefore, conspiring with or aiding and abetting someone who possesses, sells or distributes marijuana is a crime under federal law.
So, if your legal services might be argued (by some zealous prosecutor) to constitute conspiring in or aiding or abetting a client in possessing, distributing or selling marijuana, you may be committing a federal conspiracy crime.
The looming ethical issue arises under Model Rule 1.2(d), which provides that a lawyer shall not “assist a client in conduct the lawyer knows is criminal or fraudulent.”
Against this backdrop, you must examine whether providing requested representation and advice in the “marijuana space” might constitute “assisting” in a violation of federal law, even in those state jurisdictions that have legalized the client’s activity under state law.
Likewise, if your legal assistance facilitates the possession or sale of marijuana in violation of federal criminal law, you may also be at risk of violating Model Rule 8.4(b) (professional misconduct to commit a criminal act that reflects adversely on the lawyer’s fitness) as well as Model Rule 8.4(d) (prohibiting engaging in conduct prejudicial to the administration of justice).
In an attempt to sort out the problem, four state authorities or bar associations issued ethics opinions. (Arizona, Colorado, Connecticut and Maine.) In May, Nevada amended the comments to its rules of professional conduct to allow lawyers to counsel clients on the state’s medical marijuana laws. Colorado also amended the comments to its rules.
The results of these efforts are inconsistent. Though several seem to permit some participation by lawyers, they do not appear to completely insulate lawyers from discipline. And lawyers still may face disciplinary action if the client conduct goes beyond what is permitted under state regulations.
Also, there can be additional issues raised by advising local businesses regarding their operations in other states that have different marijuana laws. Most authorities discern a critical distinction between on the one hand presenting a client with an analysis of the legal aspects of questionable conduct and on the other hand recommending the means by which a crime or fraud may be committed with impunity.
The take-away: This is still a developing area with some possible traps for the unwary. Keep aware of your state’s legal approach to the industry as well as the ethics opinions in your jurisdiction — more states will undoubtedly be formulating an approach that will possibly help dispel the smoke.