With the passage in Florida and other states of laws permitting medical and recreational use of marijuana, lawyers are being asked to provide legal advice and legal services to the so-called "legal marijuana" industry. These lawyers should think carefully before dispensing advice. Despite what the states and advocates may say, legal marijuana does not exist. A marijuana business that fully complies with state law is still breaking federal law. Bluntly put, it is a criminal enterprise.
Lawyers who provide assistance to a marijuana business are putting themselves at risk for incarceration, loss of money, and disbarment. Unless Congress amends federal law, tremendous legal and ethical risks exist for any lawyer representing clients in this market. In this author's view, state laws and bar opinions to the contrary offer hollow protection.
More than 20 states and the District of Columbia have adopted laws that legalize medical and/or recreational marijuana. (1) Two years ago, the Florida Legislature enacted the Compassionate Medical Cannabis Act of 2014, F.S. [section]381.986. Once fully implemented, it will allow patients in Florida to obtain low-THC cannabis based on a doctor's order.
This article explores the legal and ethical pitfalls lawyers face in providing services to marijuana industry clients. There are two categories of potential clients for Florida lawyers: 1) businesses that directly manufacture, distribute, or sell marijuana in compliance with state law (legal marijuana businesses); and 2) third parties who help these businesses operate or refer customers to them, including doctors, bankers, investors, lawyers, landlords, real estate brokers, and vendors (ancillary service providers). There are two general categories of legal services that can be offered to these clients: 1) advice about the legality of proposed future actions (counseling); and 2) transactional services to assist the operations of the legal marijuana business (assistance). There is little doubt that providing prospective legal counseling is legally and ethically permitted. Providing transactional services or other assistance, however, is fraught with personal and professional danger.
A lawyer cannot ethically assist a client in conduct that the lawyer knows or reasonably should know is criminal. Rule 4-1.2(d) of the Florida Rules of Professional Conduct states:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows or reasonably should know is criminal or fraudulent. However, 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. (2)
Recognizing the tension between federal and state marijuana laws, in 2014, The Florida Bar Board of Governors issued policy guidance on whether lawyers advising legal marijuana businesses would be subject to discipline. The policy stated:
The Florida Bar will not prosecute a Florida Bar member solely for advising a client regarding the validity, scope, and meaning of Florida statutes regarding medical marijuana or for assisting a client in conduct the lawyer reasonably believes is permitted by Florida statutes, regulations, orders, and other state or local provisions implementing them, as long as the lawyer also advises the client regarding related federal law and policy. (3)
A number of other bar associations around the country have issued similar advisory opinions saying that a lawyer can provide legal counseling and legal assistance to marijuana industry clients without running afoul of their jurisdiction's rules of professional conduct, so long as the lawyer also advises the client regarding federal law and policy. (4) Neither The Florida Bar policy nor the other bar opinions delineate the scope of the advice the lawyer must give about federal law and policy.
Adequately advising the client regarding federal law and policy is not as simple as it might appear at first blush. Federal laws and policies are broad, detailed, and complex. Legal marijuana business operators can be prosecuted under several federal criminal statutes. (5) Ancillary service providers can be prosecuted under these same statutes as coconspirators (6) or aiders and abettors. (7) There are also tax and bankruptcy implications, as well as potential civil monetary penalties, asset forfeiture, and regulatory sanctions. The consequences of giving inadequate advice could be devastating for the lawyer as well as the client. The lawyer could be exposed to bar sanctions and malpractice liability, or worse. Lawyers, therefore, should not be comfortable that they are fully complying with their ethical obligations by summarily telling the client that the proposed conduct is prohibited by federal law.
What Should a Lawyer Tell the Client About Federal Marijuana Law and Policy?
* Lawful Marijuana Does Not Exist --Marijuana is still illegal everywhere in the United States, even for medicinal purposes. Federal law carefully regulates controlled substances. It is punishable by up to life imprisonment to "knowingly or intentionally... manufacture, distribute, dispense, or possess with intent to distribute or dispense, a controlled substance." (8) The only exception to this sweeping prohibition is that certain persons registered with the U.S. Drug Enforcement Administration (DEA) (primarily drug companies, doctors, and pharmacists) can manufacture, distribute, and dispense specified controlled substances. (9) No such registration is available for wholesale or retail marijuana.
Under federal law, a physician cannot lawfully prescribe marijuana, nor can a pharmacist lawfully fill a prescription for marijuana. Federal law divides controlled substances into a series of drug schedules: Marijuana is designated a Schedule I controlled substance. (10) Schedule I controlled substances have been determined to have "a high potential for abuse[,] no currently accepted medical use in treatment in the United States [and] a lack of accepted safety for use of the drug or other substance under medical supervision." (11) A prescription for a controlled substance is valid only if issued "for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice." (12) Therefore, Schedule I controlled substances, like marijuana, cannot be prescribed because, by definition, they have no legitimate medical purpose.
Recognizing that marijuana cannot lawfully be prescribed, states have adopted other terms to describe the document a doctor issues to help the patient obtain marijuana. These terms include an "order" (Florida), a "recommendation" (California), and a "certification" (Arizona). (13) Regardless of what the document is called, it is illegal; federal law prohibits a doctor from helping someone obtain medical marijuana.
A number of bills have been introduced in Congress to remove marijuana from Schedule I, which would allow doctors to prescribe it. (14) Until that change occurs, it remains illegal for anyone...