Advising Medical Marijuana Businesses

May 12, 2015

With the passage and implementation of the Compassionate Use of Medical Cannabis Pilot Program Act, Illinois stands to follow many other states on the path towards legalized marijuana use. However, despite allowing specific uses of marijuana, the federal government still identifies the possession, sale, and production of marijuana as illegal. While the U.S. Department of Justice (“DOJ”) has stated that it does not intend to interfere with the medical use of marijuana, the law still remains in effect and could be enforced by future administrations. With presidential elections upcoming in 2016, the enforcement of anti-drug laws could become a contested issue requiring the DOJ to rescind their statements. As a result, both marijuana businesses and their attorneys find themselves operating in a difficult and uncertain place. Their work is legal under state law, but illegal, yet tolerated under federal laws.

For attorneys, one of the most basic rules of professional ethics is that an attorney may not assist a client in criminal conduct. However, the application of this straightforward principle has become more difficult in the context of medical marijuana. Businesses need the advice and counsel of attorneys as they navigate the numerous restrictions and rules for cultivating, dispensing, and possessing marijuana. Simultaneously, according to the federal government, these actions are criminal. How can an attorney reconcile this contradiction?

The Illinois State Bar Association (“ISBA”) has attempted to answer the problem in a highly contested opinion issued last December. The opinion asked two questions: “1) May a lawyer provide legal advice and render other legal services to a client engaged in the medical marijuana business? 2) May a lawyer counsel a municipal government about zoning regulations for cultivation centers and dispensaries?” The ISBA answered the second question with a simple yes. However, the first question required a more nuanced and qualified “yes.”

While the ISBA was uniform in supporting legal advice to such businesses, the phrase “other legal services” causes many more issues. Since an attorney is bound not to assist any criminal activity and the possessions, distribution, and manufacture of cannabis is a criminal activity, could the ARDC come after an attorney for drafting or negotiating a contract? Working with the new rules and regulation of the state? Banking transactions? Once the attorney goes beyond mere advice to actually furthering the business, is the attorney aiding a criminal activity? The ISBA says yes.

In response to its conclusions, the ISBA has asked the Illinois Supreme Court Rules Committee to enact a rule providing a “safe harbor” to attorneys assisting marijuana businesses. Until such a rule is enacted or the federal government decriminalizes medical marijuana, attorneys will either have to forego representing medical marijuana businesses or operate in a legal gray area at the risk of discipline by the ARDC. Simultaneously, entrepreneurs may be forced to blaze into uncertain legal territory without adequate assistance from their legal representatives.