“At a certain point, you have to realize this is against the law…”

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Lawyers Handling Marijuana Business Operate in Hazy Legal Zone

By Brian Melley | December 12, 2017

Just as entrepreneurs getting into the retail pot industry need a good lawyer, some of those lawyers might be wise to consult an attorney of their own.

Lawyers in the burgeoning business are entering a legal gray zone where the drug is permitted for some purpose in most states but illegal under federal law – in the same controlled substances category as heroin. Missteps could lead to prosecution for conspiracy, money laundering or aiding and abetting drug dealers.

“Any lawyer that goes into this should be aware that a literal reading of federal law permits such a prosecution,”

said Sam Kamin, a University of Denver marijuana policy law professor, whose research five years ago found lawyers more susceptible to being disbarred than criminally charged for cannabis-related work. “It probably makes sense for a lawyer to at least talk to a legal ethicist or get an opinion from a legal ethicist.”

Attorney General Jeff Sessions reiterated his opposition to legal weed last week and a congressional amendment prohibiting federal prosecutors from targeting medical marijuana is due to expire at the end of the year.

Sessions has not said if he will reverse a longstanding Justice Department policy not to interfere with purveyors complying with state laws but to focus prosecutions on trafficking, sales to minors, cartels and gangs in the business, violence or gun use in cultivation or distribution, and pot grown on public land.

Despite a few instances of lawyers being prosecuted in federal and state court – including a pending San Diego County case – more attorneys are jumping into cannabis law. Legal needs range from financing to permits, real estate, water law, intellectual property, contracts and banking.

With California allowing recreational pot retail sales Jan. 1, interested investors are reaching out to attorneys like Mitch Kulick to find out how to safely finance the potentially lucrative industry.

Kulick, a New York lawyer who offers his expertise in many states, recently gave his typical scare spiel to a real estate magnate about the possible legal consequences, and said he could only help mitigate risk so much.

“At a certain point, you have to realize this is against the law. There’s no insurance policy to take away the risk,” Kulick said he told the man. “If I was already a billionaire, I might not be taking the risk.”

Kulick, who once worked as a lawyer for the Securities and Exchange Commission and a major international firm, had to do a similar risk analysis and soul searching before deciding to commit to the higher cause, so to speak.

There has been a tipping point for many lawyers setting up boutique pot law firms and jumping from old-school law firms as demand for their services trumps fear of legal repercussions and the stoner stigma fades as more states legalize marijuana use.

Attorney Chris Davis, who grew up in Berkeley around friends and family who use the drug, found people operating in the shadows who wanted to go legit when he returned to California from New York two years ago.

“So many people were asking how to go legal and how to worry less,” said Davis, executive director of the National Cannabis Bar Association, which has about 300 members in the U.S. and Canada and is growing rapidly. “It became impossible to turn people away.”

Lawyers specializing in the business see themselves at the frontier. That leaves a fascinating opportunity to shape laws and regulations and the daunting prospect of the unknown.

“Lawyers like things to be settled,” Davis said. “It’s hard to get a lawyer to give you a yes or no answer. In the cannabis industry, there really is no yes or no answer.”

Some state bar associations have given lawyers cover to counsel marijuana clients within the bounds of state law. Others say federal law keeps the area off-limits because ethical rules prevent them from helping clients commit crimes.

Attorney Larry Donahue had several medical marijuana clients at his firm in Albuquerque, New Mexico, until the state bar issued a January 2016 opinion that said lawyers could be exposed to ethics charges for such work. Donahue had to terminate four or five clients.

“It was a very chilling opinion,” he said. “It basically scared the hell out of us.”

While prosecutions of attorneys are rare, a case in San Diego has gotten the attention of many lawyers, mainly because of aggressive tactics employed by the district attorney.

Attorney Jessica McElfresh was charged with several felonies alleging she helped a client hide evidence of marijuana manufacturing.

The case might have received less notice if prosecutors didn’t unsuccessfully try to get around the sacrosanct lawyer-client privilege and seek communications with all her marijuana clients.

McElfresh, who vehemently denies the charges, said she knew specializing in pot law carried risks, but she couldn’t foresee “in a million years” police raiding her house. She and her boyfriend and mother were escorted into her backyard, where she was handcuffed barefoot in her pajamas during the search.

She said she didn’t take the risks some lawyers do by sitting on the boards of a client’s company, owning a share in a business or introducing clients to one another.

“I am one of the most conservative and boring people you would ever meet in cannabis law,” she said. “The only way I could have been more careful would have been not to engage in this area of law at all.”

A new district attorney took office after McElfresh was charged and allowed five co-defendants facing similar charges to plead guilty last month to misdemeanors and get probation.

The San Diego district attorney’s office wouldn’t comment, but in a statement cited the recreational pot law passed by voters last year and the new administration’s “changing focus” as part of the reason for the plea deals. It’s not clear if that change will affect McElfresh’s pending case.

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Nevada bill would allow medical marijuana users to carry guns

Jenny Kane , [email protected] Published 4:09 p.m. PT March 20, 2017

Nevada lawmakers are trying to address everything from marijuana users’ gun rights to the danger that edible marijuana products pose to children.

On Monday, a wide array of marijuana-focused bills were introduced to both members of the Nevada Senate and the Assembly to help regulate the drug that’s now legal for recreational use in Nevada (and has been legal for medicinal use since 2000).

Sen. Kelvin Atkinson, D-Las Vegas, introduced a bill, SB 351, which would allow medical marijuana users to possess a firearm and a conceal and carry permit. Sheriffs currently are required to deny an application for a permit to carry a concealed firearm or revoke an existing permit if someone is a medical marijuana card holder.

Sen. Tick Segerblom, D-Las Vegas, co-sponsored a separate bill, SB 344, with Sen. Patricia Farley, Nonpartisan-Las Vegas, that revises the standards for the labeling and packaging of marijuana for medical use.

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The proposed legislation establishes limits on how much medicinal marijuana may be sold in a single package and prohibits candy-like marijuana products that appeal to children. The bill also would prevent edible marijuana products that look like cookies or brownies to be sealed in see-through packaging, or any kind of packaging that children might be attracted to.

Segerblom introduced a separate, 147-page bill, SB 329, that would allow for medical marijuana research and hemp research. The same bill would add post traumatic stress disorder to the list of conditions that could qualify a patient for medicinal marijuana consumption.

Under Segerblom’s bill, non-profit medical marijuana dispensaries could accept donations of marijuana, and all medical marijuana establishments would have to install video security which law enforcement could remotely access in real time.

He also is proposing a bill, SB 321, that would allow American Indian tribes in Nevada to make agreements with the Governor that would allow the tribes to follow state law as related to both medical and recreational marijuana.

Segerblom and Farley also introduced a bill, SB 236, that would allow money raised from medical marijuana establishment applications to be spent not only on government costs and schools. Segerblom and Farley believe that the money should also be spent on programs used to educate people about the safe usage of marijuana.

Segerblom and Farley’s bill also suggests prohibiting counties and incorporated cities from imposing requirements upon marijuana establishments that are not zoning related. The bill also would limit the license tax that a county or city could impose upon a marijuana establishment.

Assemblywoman Brittney Miller also introduced a bill to the Assembly on Monday that would vacate the sentences of offenders who were convicted of possessing 1 ounce or less of marijuana before legalization was effective Jan. 1. Assemblyman William McCurdy II introduced a similar bill last week to the Assembly’s Committee on Corrections, Parole and Probation.

The legalized marijuana industry is growing more than

The legalized marijuana industry is growing more than pot. Analysts say it could create over a quarter of a million jobs while other industries decline. (Photo: USA TODAY video still)

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Congressional Republicans Vow To Block Marijuana Amendments

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By Tom Angell on December 5th, 2016 at 10:33 am

Don’t count on there being any marijuana votes in the U.S. House next year.

That’s the message that Republican leadership in Congress is sending after blocking a number of cannabis amendments from reaching the House floor earlier this year.

“The chairman has taken a stand against all amendments that are deemed poison pills and that would imperil passage of the final bill,” Caroline Boothe, spokeswoman for House Rules Committee Chairman Pete Sessions (R-TX), told Marijuana.com in an email on Monday.

The Rules Committee is responsible for deciding which submitted amendments are allowed to be considered on the House floor.

In recent years, Congressional leadership has taken up spending bills under relatively open rules whereby almost any amendment could be debated and voted on as long as it was germane to the overall legislation. But due to unrelated disputes over gay rights, gun policy and the right of transgender people to access public bathrooms, House Republicans began locking down the amendment process earlier this year so that only certain approved amendments can come to the floor.

While marijuana law reformers have been able to pass amendments in recent years — such as a rider preventing the Department of Justice from interfering with state medical cannabis laws — the new approach has impeded efforts to demonstrate that there is majority support in Congress for scaling back prohibition.

Earlier this year, for example, the Rules Committee blocked House floor votes on amendments concerning marijuana businesses’ access to banking services and Washington, D.C.’s ability to spend its own money legalizing and regulating cannabis sales. The committee also prevented two measures to expand medical marijuana research from being considered.

But despite Boothe’s reference to “poison pills,” the House approved a version of the banking amendment in 2014 by a vote of 231 – 192, and the overall bill was later passed as well. Similarly, the measure to protect state medical cannabis laws from federal interference was approved with strong bipartisan House votes in 2014 and 2015, and the overall spending bills were also passed once the marijuana measures were attached.

Boothe did not respond to a request for clarification about her boss’s position on the broadly popular medical marijuana measure.

The restricted amendment rules put in place this year left marijuana law reformers much less confident about the ability to enact and extend their legislation, which must be approved each year because appropriations measures only apply to specific fiscal years.

But until now, it was not known that there is in effect a blanket ban on measures concerning cannabis policy.

The notion of an outright prohibition on any marijuana amendments was first reported Monday by Politico Magazine. Congressman Thomas Massie (R-KY), who has sponsored industrial hemp measures, told the magazine that the new operating procedure is “an affront to regular order” and “a travesty to our democracy.”

As a result of the inability to take marijuana votes on the House floor, reformers must increasingly rely on the Senate to include cannabis language in its versions of appropriations bills. If efforts succeed there, it is left up to conference committees of members from both chambers to decide whether to include marijuana language in the final enacted versions of spending bills.

Current spending levels for the federal government — along with the state medical marijuana protections that are current law — expire this Friday. It is expected that Congress will pass a short-term measure before then extending funding and policy riders until next spring.

But Sessions, who has been selected to continue chairing the Rules Committee for the next Congress, seems poised to continue the policy of blocking marijuana amendments from coming to the House floor. That, combined with uncertainty about how the incoming Trump administration will handle marijuana, leaves advocates in a precarious position even at a time when a growing number of states are ending prohibition.

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693,482 individuals in the United States were arrested in 2013 and charged with marijuana violations

Why legalizing marijuana will be much harder than you think

 

 

By Erwin Chemerinsky April 27

Each week, In Theory takes on a big idea in the news and explores it from a range of perspectives. This week, we’re talking about drug scheduling. Need a primer? Catch up here.

Erwin Chemerinsky is dean and distinguished professor of law at the University of California, Irvine School of Law

There are rumors that the federal government may soon lift its ban on marijuana, but that wouldn’t end marijuana prohibitions in the United States. This incongruity is the result of federalism: the ability of each jurisdiction — the federal government and every state — to maintain its own laws as to which drugs are illegal and which are not.

Completely legalizing marijuana in the United States would require the actions of both the federal government and every state government. If the federal government repealed its criminal prohibition of marijuana or rescheduled the drug under federal law, that would not change state laws that forbid its possession or sale. Likewise, state governments can repeal their marijuana laws, in whole or in part, but that does not change federal law.

[The paradox at the heart of our marijuana laws — and how to fix it]

When Colorado and Washington legalized the possession of less than one ounce of marijuana, questions arose as to how this would interact with federal law. Specifically, the question was whether such state efforts are preempted by the federal law, which still prohibits marijuana as a controlled substance like heroin and cocaine.

The answer is clear: States can have whatever laws they want with regard to marijuana or any other drug. No state is required to have a law prohibiting or regulating marijuana. The Supreme Court has repeatedly held that Congress cannot force states to enact laws; such coercion violates the 10th Amendment. A state could choose to have no law prohibiting marijuana, or a law prohibiting marijuana with an exception for medical use, or a law allowing possession of small amounts of marijuana, or anything else. In fact, across the United States today, this is exactly the situation — many states have very different laws concerning marijuana.

Similarly, if the federal government were to repeal the prohibition of marijuana or reschedule it under the Controlled Substances Act, that would not change state laws. States still could prohibit and punish the sale and possession of marijuana under state criminal statutes.

Contrary to what many believe, marijuana laws continue to be enforced by both states and the federal government. According to statistics from the Federal Bureau of Investigation, 693,482 individuals in the United States were arrested in 2013 and charged with marijuana violations. Of these, 609,423 — or 88 percent — were arrested for simple possession. There is an enormous cost in terms of law enforcement resources, the criminal justice system and people’s lives for marijuana to remain illegal. Even for those arrested and never prosecuted or convicted, arrest records have real harms in terms of the ability to get jobs, loans, housing and benefits.

Like all drug laws, the prohibition against marijuana is much more likely to be enforced against African Americans and Latinos than against whites. According to a 2013 study, whites and blacks use marijuana at roughly the same rates, but blacks are 3.7 times more likely than whites to be arrested for possession of marijuana.

[Legal marijuana is finally doing what the drug war couldn’t]

In Theory newsletter

Emerging ideas and arguments behind the news.

Yet there is little benefit to illegality. The primary argument for keeping marijuana illegal is that it is harmful. But as President Obama observed, pot is no “more dangerous than alcohol.” Many things are harmful — cigarettes, foods high in sugar and salt and cholesterol — but that does not mean that they should be illegal. In fact, there is a good deal of evidence that marijuana is significantly less harmful than tobacco or alcohol and that it has benefits in treating some medical conditions such as glaucoma and seizure disorders, and alleviating some of the ill effects of chemotherapy. That is why 24 states and the District allow medical use of marijuana.

Like the prohibition of alcohol in the 1920s, the prohibition of marijuana has been a failure. The drug is readily available and it is estimated that 30 million Americans used it in the past year. And similar to the prohibition of alcohol, it is a costly failure. In addition to the cost in enforcing the criminal laws, there is the loss of significant revenue that could be gained from taxation and legalization.

It is a question of when, not whether, marijuana becomes legal in the United States. A study by the Pew Research Center last year found that a majority of Americans now favor legalization and only 44 percent believe it should be illegal. Of those under 35 years old, 68 percent believe that marijuana should be legal. But there is no doubt that the confusion federalism entails will make legalizing marijuana much more difficult.

Explore these other perspectives:

Keith Humphreys: The paradox at the heart of our marijuana laws — and how to fix it

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Rule or Law? The Difference Matters For Your Marijuana Business

By Daniel Shortt on October 28, 2015 Posted in Legal Issues, States

This is for federal bills, but it nicely illustrates how complicated the process can be.

Laws are different than rules and understanding the difference between the two can be important to your marijuana business’s bottom-line. I will use Washington State as the example.

In Washington, laws are generally enacted through initiative or through the legislative process. Initiatives allow voters to pass laws directly by popular vote. Washington legalized recreational marijuana by popular vote — Initiative 502 in 2012. The legislative process requires a bill pass through both Washington’s Senate and House of Representatives and then garner the Governor’s signature before becoming law. Recently, SB 5052 and HB 2136 were passed through the legislative process and established new Washington State laws regarding medical cannabis.

As is the case with other states with “robust regulation,” Washington cannabis businesses are also subject to rules created by state agencies without the political protections provided by initiatives and the legislative process. State agencies, like the Washington State Liquor and Cannabis Board (LCB), are government entities given the power to regulate and govern a specific area or industry. These agencies are typically run by unelected officials. Agencies arguably create more efficient government because they a focus on one discreet area or industry, with expertise not usually available to legislatures and lawmakers.

A rule is an agency order, directive, or regulation that applies to the public generally. Rules are similar to laws because those who violate them may be subject to penalties and sanctions. Rules can and do change constantly, whereas laws tend to remain more static. The LCB’s rule-making process may begin with an individual’s petition to the LCB, but often the agency itself initiates the process against a cannabis business if it sees a need to do so.

To enact a rule, the LCB must publish notice of the rule-making in the Washington State Register. The LCB then holds a public hearing at which citizens are given an opportunity to comment on the proposed rule. Citizens can also submit written comments to the LCB about the proposed rule. The LCB must consider the public comments and then issue an order of adoption, which explains the new rule and the basis for its adoption.  Agencies can also institute emergency rules, which are not subject to the above requirements and become effective immediately. These emergency rules only last for up to 120 days and they must be in response to some immediate issue or danger. The Washington Department of Health recently issued emergency rules for medical marijuana, for instance.

Despite similarities to laws, LCB rules are not subject to the same type of political recourse as laws. This is significant because LCB regulations have huge impacts on the cannabis marketplace. For example, in Initiative 502, voters enacted residency requirements that restrict issuance of cannabis licenses only to those who can demonstrate having spent a certain amount of time in the state (see here and here). The Initiative never mentions “True Party of Interest.” In its rule making though, the LCB created the term, True Party of Interest, and defined it, and now applies the residency requirements to any party deemed to be a True Party of Interest. The definition for a “True Party of Interest” includes all investors and the spouses of any shareholders or principal. Though never contemplated by the voters, the “True Party of Interest” rule significantly restricts the marijuana marketplace by making it difficult for out-of-state investors to put their funds into Washington State cannabis businesses. Moreover, Washington voters who disagree with the “True Party of Interest” rule have little recourse beyond lobbying to get this rule changed.

One of the best ways for citizens to get involved with LCB rule making is to comment during the agency’s rule-making process. Currently the LCB and the Washington State Department of Health are holding hearings regarding medical marijuana regulations. If you care about the future of the marijuana industry in Washington State you should make your voice heard at one or more of these hearings.

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The Supreme Court of Colorado ruled unanimously last week that Dish Network acted lawfully when it fired a quadriplegic employee who used medicinal marijuana legally to control leg spasms and while he was not at work.

 

 

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The Supreme Court of Colorado ruled unanimously last week that Dish Network acted lawfully when it fired a quadriplegic employee who used medicinal marijuana legally to control leg spasms and while he was not at work. The employee, Brandon Coats, was fired in 2010 when he failed a random drug test.

Needless to say, this was not a popular decision among marijuana legalization activists. In his appeal, Coats claimed that Colorado labor laws legitimized his use of marijuana, making his firing illegal under those same laws. The court’s ruling held that the term “lawful activity” must be considered in both a federal and a state legal context. Because marijuana use remains illegal under federal law and marijuana itself is classified as a Schedule 1 drug, the fact that both the Congress and the Obama administration’s Justice Department have signaled that enforcement will be both lightly funded and lightly enforced does not supersede the law. Under federal law, marijuana is a dangerous and illegal drug and that is the end of the story, regardless of the feds’ “wink-wink-nod-nod” approach.

At the Brookings Institution’s Fixgov blog, managing editor John Hudak noted:

Federal efforts have limited funding for the use of enforcing medical marijuana laws (Congress) or use prosecutorial discretion to limit the enforcement of marijuana laws (Department of Justice). However, those moves do not resolve the serious disconnects in the law that extend far beyond a medical marijuana patient fearing prosecution. Inconsistencies between state and federal marijuana laws extend to issues of employment, housing, banking, property rights, and a variety of other areas

We have noted before that the lack of a federal law — which only Congress can pass — raises any number of obstacles for companies in the marijuana industry. Dispensaries and growers cannot find bankers willing to take their cash deposits, and even a state government is having difficulty finding a willing bank. With almost half the states having approved the use of medical marijuana, perhaps it is time for Congress to fix a system that is truly broken.

ALSO READ: The 10 Largest Marijuana Companies

Read more: Congress Deserves Blame for Colorado Ruling Against Medical Marijuana – 24/7 Wall St. http://247wallst.com/consumer-products/2015/06/22/congress-deserves-blame-for-colorado-ruling-against-medical-marijuana/#ixzz3dpMMqgIa
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Prohibition Repeal Is A Good Model For Marijuana Legalization

9:51 AM 12/05/2014

Marijuana plants for sale are displayed at the medical marijuana farmers market at the California Heritage Market in Los Angeles, California July 11, 2014.  REUTERS/David McNew

Today is the 81st anniversary of the repeal of federal alcohol prohibition.

The 21st Amendment ended the failed experiment of Prohibition and delegated the issue of alcohol legalization and regulation solely to the states.

The 21st Amendment was neither “for” nor “against” alcohol. It was simply an acknowledgment that federal prohibition was an obvious failure and a nod towards state’s and individual rights. No state was required to legalize alcohol. It was their choice.

The repeal of prohibition has been a tremendous success. This country has the best regulated beverage alcohol industry in the world while still being the world’s most dynamic. Just ask any beer drinker!

Fast forward to the present. Republicans made huge gains in last month’s elections, decisively winning control of the Senate, increasing their dominance in the House to a level not seen since the 40’s, controlling 33 governorships and more state legislators than any time since the 1920s. They now have the opportunity to cement and expand these gains and to create a permanent majority.

How? By leading the charge to end the federal prohibition of marijuana. You don’t have to be “pro-cannabis” to be against prohibition.

Like it or not, illicit marijuana is available in every corner of this country. Any teenager can get it with little effort. Most say it’s far easier to get than beer.

Criminal gangs across the country rake in tens of billions of dollars each year selling marijuana. Milton Friedman once said, “See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That’s literally true.”

In 2012, 750,000 people were arrested for mere possession. That’s about one arrest every 48 seconds! And a disproportionate number of the people arrested on marijuana-related charges are minorities.

The federal prohibition of marijuana has been as profound a failure as the attempted federal prohibition against alcohol. The solution is the same. Let the states decide and regulate as they see fit.

Here in Colorado, the legalization of marijuana has been a resounding success. Teen use is down. Auto fatalities are at near historic lows. Crime is down across the board. Tax revenue is flowing in.

If Republicans want to expand their base, they need to show they truly believe in a liberty-based agenda. Reach out to groups that historically have not been favorable to the Republican brand and prove through action that they have much more in common than they might think. Individual freedom is a winning message for people of all colors and all walks of life.

Republicans in Congress should pass legislation within their first 60 days in office repealing federal prohibition and placing the issue with the individual states and their citizens.

A statement such as, “I’m personally against it but believe in the wisdom of the people” can be a get-out-of-jail-free card for all who fear being branded pro-marijuana. The issue isn’t for or against marijuana but rather whether a legal, state regulated market is preferable to a prohibition market. Alcohol or marijuana, the answer to this is clear.

The alternative is Republicans turning off another generation of voters who think of them as the party that speaks of individual freedom but whose actions suggest they want to control other people’s lives. These folks have seen the failure of big government and most big institutions. Their loyalty can be obtained, but the party has to walk the walk.

Think I exaggerate? Here in Colorado, the Republican challenger for governor was ahead by 10 points in a September poll. Then, showing the Republican skill for snatching defeat from the jaws of victory, he stated he would like to recriminalize marijuana. His lead evaporated almost overnight.

He lost by 58,000 votes and singlehandedly damaged the Republican brand for a generation of young Colorado voters. There are over 10,000 people directly employed in this Colorado industry and hundreds of thousands of consumers. That’s a lot of voters to antagonize; many of them motivated single issue folks.

What if the GOP could create a new supporter every 48 seconds rather than trying to throw them in jail?

Freedom and liberty win. Prohibition and attempting to control people’s lives loses. Republicans, if you believe what you say, end the federal prohibition on marijuana. A permanent majority awaits. It is yours for the taking.

John Conlin is a self-employed management consultant providing services to beer, wine, and spirits distributors across the country. He is also in the process of starting a marijuana-infused edibles company.

 

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Tags: John Conlin, Marijuana, Prohibition