Recently, I traveled to Chicago to speak at a conference hosted by the American Bar Association (“ABA”) titled From Regs to Riches: Navigating the Rapidly Emerging Fields of Cannabis and Hemp Law. The Conference covered a broad range of cannabis topics including the tension between state and federal law on marijuana, navigating the licensing and start-up processes in a state that has just gone legal, advising clients in the hemp and hemp-derived CBD space, intellectual property issues, insurance coverage for marijuana businesses, the burgeoning global market for cannabis trade, and ethical issues a marijuana lawyer must consider. As you probably guessed from that title, that last point is going to be the focus of this post.
I spoke on a panel at the Conference, along with moderator Michael W. Drumke of Swanson, Martin & Bell and fellow panelists Alec Rothrock of Burns, Figa & Will and Steven Cash of Day Pitney LLP.
Before I get started, I want to provide a disclaimer for the non-lawyer readers of the blog. In this context, unless otherwise noted, “Ethics” refers to the rules of professional conduct that govern lawyers. Lawyers are afforded a great deal of trust from clients, other lawyers, courts, and society as a whole. As such, we have our own set of Ethics to observe in order to maintain our licenses to practice law. Each state governs its own attorneys and each has its own rules. For example, these rules govern a lawyer’s conduct in the state of Washington. Though no two states Ethics are exactly alike, most states follow the ABA’s Model Rules of Professional Conduct in drafting their own rules.
Model Rule 1.2(d) states the following:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
The production, processing, possession, transportation, and sale of marijuana is a violation of federal law under the Controlled Substances Act (“CSA”). Many states have legalized either recreational or medical marijuana which conflicts with federal law. If a lawyer is working with a client who is operating a state-legal marijuana business, she is assisting the client in conduct that she knows is criminal under federal law. Strict compliance with Rule 1.2 would mean that no lawyer could work with a marijuana business in states where marijuana is legal. That would be a ridiculous result as it would deprive an entire industry, one that it heavily regulated and complex, of legal representation.
In light of this, many states are adding comments to their version of Rule 1.2 to allow lawyers to work in the marijuana industry. If you’re a lawyer venturing into the marijuana industry, make sure you understand how your state bar deals with RPC 1.2 (d). Do not assume that you’re “good to go” just because voters legalized marijuana.
In Washington, our State Supreme Court, which regulates lawyers, added the following comment to Washington’s Rule 1.2:
[A] lawyer may counsel a client regarding Washington’s marijuana laws and may assist a client in conduct that the lawyer reasonably believes is permitted by those laws. If Washington law conflicts with federal or tribal law, the lawyer shall also advise the client regarding the related federal or tribal law and policy.
The Washington State Bar Association also issued a non-binding opinion on whether lawyers can purchase marijuana, consumer marijuana and own marijuana businesses. Spoiler alert, the answer to all three questions is “yes,” with strings attached.
Does that comment change Rule 1.2? Nope. It just provides guidance. Do the comment and guidance from WSDA provide even an ounce of protection for a lawyer who is violating federal law by “aiding and abetting” marijuana clients? No way! Though at this point federal enforcement against state-legal marijuana seems very unlikely, lawyers, like their clients, are taking a risk by operating in this space. At the end of the day, a marijuana lawyer needs to accept this fact in order to work in this field.
For those that do take the plunge, here are a few tips that were discussed on the Ethics panel in Chicago:
- Make sure that your client understands that marijuana is illegal under federal law and that nothing in state law changes that. This disclaimer should be in every engagement letter that is in any way related to marijuana. Need an example? Here is the disclaimer that we use for this blog (also conveniently located to the right of this post): “Please be mindful that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, much less lead you to believe that marijuana is legal under federal law.” Keep in mind that this disclaimer is for a blog, not an engagement letter, but it states in plain English that marijuana remains illegal under federal law. However, do not think that one disclaimer is enough. Remind your client of the federal risks early and often.
- Limit the scope of your engagement to state law. For example, if a client requests that you help with some legal issues related to her Washington-licensed marijuana grow you, should state that your firm will “provide advice on the lawful cultivation of marijuana in Washington State.” Without that last bit “lawful cultivation” is not really possible due to the CSA. Don’t assume that everyone who ever reads that engagement letter will know what you meant. Spell it out initially to avoid ambiguity.
- If you live in a state where it’s legal and Ethical for a lawyer to consume marijuana, do so responsibly. Lawyers are statistically much more likely to struggle with substance abuse problems, in comparison to non-lawyers, as indicated in a recent report by the ABA Commission on Lawyer Assistance Programs published in the Journal of Addiction Medicine. Marijuana has no place on Schedule I of the CSA, alongside heroin and ecstasy. However, it can be abused and can negatively impact an attorney’s practice. If you do decide to consume marijuana, either for recreational or medical purposes, make sure that you are not intoxicated while on the job as that could have devastating results for both you and your client. If you consume after hours, pay attention to how your body reacts during working hours. If you find that you feel groggy the morning after consuming, you may want to only partake on the weekends or, at the very least, avoid consuming the night before your opening argument or that high-stakes negotiation. If you are struggling with substance abuse or mental health issues, you can find resources here.
Marijuana legalization has come with unique Ethical challenges and I enjoyed discussing some of those issues at the ABA’s Conference. As a final note, the Conference was sponsored by the Tort Trial and Insurance Practice Section of the ABA and our lawyer-readers who are interested in joining this section, can find more information here.