What’s Happening
Last week, the Maine Public Utilities Commission (the commission) heard an unusual pitch: an electric utility proposed to voluntarily report to law enforcement if residential utility usage suggested illegal marijuana grow enterprises — without the law enforcement agency submitting a subpoena or obtaining a warrant. Although the commission ultimately rejected the proposal, the utility cited its high identification success rate and the burden of responding to subpoenas (sometimes as many 50 for a single location), as its motivation for this proposal.
Notably, utilities are not the only industry facing increased law enforcement and civil requests for consumer data. Any company that collects personal, locational, financial, or health data (to name a few) is becoming more likely to encounter a request for consumer information.
The Details
Thirty-eight states and the District of Columbia have implemented regulatory programs for marijuana, with at least 20 states seeing a spike in illegal marijuana grow operations. Indoor marijuana cultivation requires substantial energy for artificial lighting, climate control, and ventilation systems, with some operations causing energy bills to jump, for example, from $300 to $9,000 per month. Thus, utilities in many states have received an influx of subpoenas seeking consumer usage for suspected illegal marijuana growth locations.
Why It Matters
While the Maine utility’s proposal was ultimately struck down, it shows the novel way in which one company sought to balance the administrative burden and legal concerns of compliance. However, any company that voluntarily turns over consumer data without a legitimate legal request (such as through a subpoena, civil investigation demand, or other vehicle) may open the door to legal action or a government investigation.[1]
Companies that receive requests for consumer information could benefit from experienced outside counsel assistance in preparing a streamlined response process to ensure compliance with applicable federal and state consumer protection laws, as well as any contractual provisions with the individual consumer(s). There may be some circumstances in which it is also appropriate for counsel to negotiate the scope and timing of the request, in addition to asserting available defenses.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law.
[1] See, e.g., Wyden, Ron, Jayapal, Pramila, and Jacobs, Sara, Letter to the Honorable Xavier Becerra (Dec. 12, 2023), available at https://www.finance.senate.gov/ imo/media/doc/hhs_pharmacy_surveillance_ letter_signed.pdf (Congressional letter describing two pharmacies’ policy of allowing staff members to hand over customers’ medical records in the store, without prior legal review of the requests).