The tension between cannabis federal and state laws is high. Almost fifty states have decriminalized, allowed medicinal use, or legalized cannabis. However, cannabis remains a Schedule I Controlled Substance under federal law. Many people want their hands in the cannabis pot and are seeking legal advice and services. Yet, attorneys may face ethical potholes when assisting clients in establishing and operating their cannabis businesses. For instance, it may be deemed that an attorney violates the ethical rules if she helps her client to possess, sell, manufacture, or distribute cannabis because it is illegal under federal law. While the attorney is complying with local and state laws when advising her client, she may be considered aiding and abetting her client to commit a federal crime. Many states have addressed this issue, and this article will explore different jurisdictions' perspectives and recommendations.
The central ethical dilemma in cannabis lawyering is Rule 1.2. Rule 1.2 prohibits a lawyer from counseling a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent. In addition, lawyers advising cannabis clients may face federal conspiracy charges, which violates Rule 8.4. Finally, rule 8.4 prohibits a lawyer from committing a crime or deliberately wrongful act that adversely affects the lawyer's fitness to practice law.
Generally, the debate over Rule 1.2 is whether it is a strict textual approach or a client-centric policy approach for cannabis attorneys. States approached cannabis lawyering in one or more ways: (1) strictly interpreted Rule 1.2 and concluded that representing a cannabis client beyond just advice as to the legality of the business would violate an ethics rule; (2) created an administrative policy that the state bar will not discipline lawyers for cannabis business representation as long as the client complies with state law; and (3) amended the rule or a comment that acknowledges the unique circumstance of advising clients on conduct that is permitted under state law but not federal law and authorizes the representation as long as specific requirements are met.
States like California, Colorado, Illinois published ethics opinions or amended Rule 1.2 to assist cannabis attorneys with abiding by the ethical rules. Essentially, many jurisdictions amended Rule 1.2 to allow a lawyer to discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client in making a good faith effort to determine the validity, scope, meaning, or application of the law. A lawyer is not precluded from giving an honest opinion about the actual consequences that appear likely to result from a client's conduct. In addition, if a client uses advice in a criminal or fraudulent course, make a lawyer a party to the course of action.
The Virginia State Bar Council submitted a proposed amendment to the Virginia Supreme Court. The proposed amendment allows for Virginia attorneys to (1) discuss the legal consequences of any proposed course of conduct; (2) assist a client in making a good faith effort to know the law; and (3) assist a client regarding conduct expressly permitted by state or other applicable law that conflicts with federal law, provided that the lawyer counsels the client about the potential legal consequence of the client's proposed course of conduct under applicable federal law. Thus, if the amendment is accepted, Virginia cannabis attorneys will represent their clients without fear of violating the ethical rules.
Maryland has not amended Maryland Attorney Rule 19-301.2 since the legalization of medicinal cannabis. The state bar's Ethics Committee published Ethics Opinion 2016-10, which explored whether the Maryland Rules of Professional Conduct prohibits attorneys from advising clients in complying with medical cannabis laws. Ultimately, the committee opined that Maryland attorneys are not prohibited from advising clients on medical cannabis business-related activities. However, the opinion is outdated and was based on the Cole Memorandum drafted by U.S. Deputy Attorney General James M. Cole. The Cole Memorandum was rescinded in 2018 by Attorney Jeff Sessions. Thus, there is no clear stance on whether Maryland attorneys are safe from ethics violations related to cannabis lawyering.
In 2015, the D.C. bar stated that bar counsel is not interested in disciplining attorneys who, in good faith, assists clients in conduct that is in strict compliance with District of Columbia law. Bar Counsel intends to exercise discretion like that laid out in the Department of Justice guidance memos. However, since then, all memos have been rescinded. The D.C. bar has not amended the ethical rules for cannabis lawyering. Thus, D.C. attorneys are in a similar position as Maryland attorneys. There is no guaranteed shield; however, it is unlikely that attorneys will face the consequences for cannabis lawyering.
Despite states' efforts to protect lawyers, there is no guaranteed protection from federal prosecution. In 2013, the U.S. Department of Justice issued the Cole Memorandum, which guided cannabis enforcement. Essentially, the DOJ explained that it is only focused on specific enforcement priorities commonly referred to as the "dirty eight." Then, in 2014 the Rohrabacher amendment was included in a passed omnibus spending bill. The amendment prohibits the DOJ from spending funds to interfere with the implementation of state medical cannabis laws. It must be renewed every fiscal year and has been since its implementation. In 2018, Jeff Sessions rescinded the Cole Memorandum. Since President Biden took office, there has been no clear stance on federal prosecution. The Biden administration expressed interest in decriminalizing marijuana, and there is hope for a bi-partisan cannabis bill. Based on the political climate surrounding cannabis, it is unlikely that attorneys are the target of federal prosecution related to cannabis. However, until the federal government legalizes cannabis, attorneys are still at risk of prosecution for conspiracy.
As cannabis regulations evolve quickly, we suggest four tips for cannabis attorneys to protect their practice and license. First, prepare for your clients the general explanations of federal law, the legal consequences, and the limitations of certain federal protections such as bankruptcy and intellectual property protection. Second, include those explanations in engagement letters and your firm's website. Third, conduct regular audits of client representation to determine if red flags are raising federal or other law concerns particular to the client's activities. Finally, use a cannabis-specific engagement letter that includes but is not limited to warnings regarding attorney-client privilege, potential disclosure requirements, and warnings regarding the lawyer's possible need to withdraw if the client's activities may subject the lawyer to discipline or criminal sanction.
Until the high tensions between federal and state laws are resolved, attorneys should remain mindful of ethical challenges in cannabis lawyering. Attorneys should seek legal ethics counseling if they have concerns about representing their cannabis clients.