Attorney Ethics and Legal Marijuana: Advisory Opinion 2016-6

Summary

This past June, a number of Ohio attorneys (including our firm) submitted a request to the Board for an advisory opinion on three distinct issues (for a primer on the professional issues involving Ohio’s medical marijuana law, click here):

  1. Whether an Ohio lawyer may ethically counsel, advise, and represent medical marijuana cultivators, processors, retail dispensaries, testing laboratories, caregivers, and/or patients as each may be licensed or seek to become licensed under Ohio state law;
  2. Whether an Ohio lawyer (or a member of a lawyer’s immediate family) may ethically operate or hold an ownership interest in a medical marijuana cultivator, processor, retail dispensary, and/or testing laboratory as each may be licensed (or may apply for a license) under Ohio state law; and
  3. Whether an Ohio lawyer may ethically use medical marijuana as provided by Ohio state law.

The Board responded by announcing a non-binding opinion on August 11, that essentially prohibited lawyers from representing the Ohio medical marijuana community. The only remedy to the untenable situation existing in Ohio is a change to the Ohio Rules of Professional Conduct — something that Chief Justice O’Connor has asked the Board to consider. Recently, our firm proposed changes to the Rules clarifying that lawyers can represent Ohio medical marijuana companies, and also that Ohio lawyers can use medical marijuana and own/operate medical marijuana businesses.

Advisory Opinion 2016-6: Ethical Implications for Lawyers under Ohio’s Medical Marijuana Law

Advice and Legal Services Provided to Clients Engaged in Conduct as a State Regulated Marijuana Enterprise

The Board began its analysis noting that Rule 1.2(d) prohibits a lawyer from assisting a client engaging or seeking to engage in conduct the lawyer knows is illegal. Importantly, the Board notes that the Rule precludes attorney assistance with respect to conduct that is illegal under either state or federal law — and the Rule does not distinguish between federal laws that are not being enforced.

The Board decided that a lawyer “cannot deliver legal services to assist a client in the establishment and operation of a state regulated marijuana enterprise that is illegal under federal law.” The prohibited services include, but are not limited to:

  • Completion and filing of marijuana license applications;
  • Negotiations with regulated individuals and businesses;
  • Representation of clients before state regulatory boards responsible for the regulation of medical marijuana;
  • Drafting and negotiating of contracts with vendors for resources or supplies;
  • Drafting of lease agreements for property to be used in the cultivation, processing, or sale of medical marijuana;
  • Representation of clients relating to commercial paper, tax, and zoning issues;
  • Corporate entity formation;
  • Representing a property owner, lessor, supplier or business in transactions with a marijuana regulated entity, if the lawyer knows the transferred property, facilities, goods or supplies will be used to engage in conduct that is illegal under federal law ; and
  • Statutory agent services.

Notwithstanding the above, the Board did conclude that Ohio lawyers may advise clients about the conflict between state and federal law, the consequences of engaging in conduct that is permissible under Ohio law but contrary to federal law, and the likelihood of federal enforcement under the current administration. Ohio lawyers can also counsel and advise about the meaning of Ohio law, and the requirements imposed by Ohio’s medical marijuana law. While a lawyer can advise how the medical marijuana law would be applied to a client’s proposed conduct, the Board’s counsel indicated to me in a conversation that this is essentially limited to a one-time conversation and does not involve ongoing advice.

Ohio lawyers can also represent clients in the following situations:

  • A client charged with violating Ohio’s medical marijuana law;
  • A professional license holder before professional licensing boards;
  • An employee in a wrongful discharge action arising out of the use of  medical marijuana; and
  • Aiding a government client in implementing and administering the state’s medical marijuana program (including state or local governments involving the establishment, operation, or implementation of the regulatory system).

The Board stated that when assisting clients pursuant to Ohio’s medical marijuana program, Ohio lawyers should enter into a written fee agreement that “encompasses a mutual understanding about the exact scope of services the lawyer is ethically and lawfully able to provide under Prof.Cond.R. 1.2(d).”

The practical effect of this opinion and lack of access to an attorney raises some serious problems:

  • Patients will be unable to consult with legal counsel regarding legal possession of medical marijuana pursuant to the “affirmative defense” provision in House Bill 523;

  • Businesses will be unable to draft meaningful contracts or obtain advice regarding tax and regulatory compliance; and
  • Medical marijuana business will effectively be shut out of court when disputes arise, as corporate entities cannot proceed pro se (with the exception of small claims) – this largely leaves “self-help” as the only effective remedy should contractual breaches occur or other disputes arise involving a legal medical marijuana business.

However, the result of the Board’s advisory opinion relating to attorney representation does not bring Ohio into uncharted territory. Following the passage of Amendment 64, the Colorado Bar Association issued a similar opinion, concluding that Colorado lawyers should not engage conduct similar to that referenced by the Ohio Board of Professional Conduct. Soon thereafter, the Colorado Supreme Court added a comment to its version of Rule 1.2 specifying that Colorado lawyers could represent clients in conduct the lawyer reasonably believed was authorized by Amendment 64.

A Lawyer’s Personal Use of Medical Marijuana and Participation in a Medical Marijuana Enterprise

The Board’s analysis involving an Ohio lawyer’s use of medical marijuana applies equally to situations where an Ohio lawyer seeks to own, operate, or lend money to a medical marijuana business. In this context, the Board concluded that the single use of medical marijuana (illegal under federal law) would not violate Rule 8.4(b) but that repeated use might. In addition, the Board concluded that other misconduct relating to the use of medical marijuana, such as “lying to federal investigators or obtaining a prescription for medical marijuana for purposes of resale o providing it to a minor” could implicate Rule 8.4(b).

The Board did clarify, however, that Rule 8.4 (h) — engaging in misconduct that adversely reflects on the lawyer’s fitness to practice law — can be violated even when no other Rule is violated. Interestingly, the Board specifically cites to the case of Disciplinary Counsel v. Bowling, 2010-Ohio-5040, and describes that case as one where a magistrate was charged, but not convicted for marijuana possession under state law and violated Rule 8.4(h). However, in Bowling the parties actually stipulated that the magistrate violated Canon 2 of the former Code of Judicial Conduct by using marijuana occasionally to self-medicate after a stroke, and Disciplinary Counsel dismissed the alleged violation of Rule 8.4(h).

The Board’s caution that “repeated” use of marijuana is troubling in light of the fact that Ohio lawyers with chronic conditions would likely use medical marijuana on a repeated basis to manage the condition. In fact, the Board’s conclusion would allow a lawyer using marijuana once for the purposes of getting high to escape discipline, while a chronically ill lawyer could be disciplined for using medical marijuana under the treatment of a physician. Furthermore, it is not clear how an Ohio lawyer can own or operate a medical marijuana business in accordance with Rule 8.4 — for instance, is owning one business allowable, even though the business engages in repeated transactions?

In any event, the Board’s statement that Rule 8.4(h) can be violated even if all other rules are complied with should caution lawyers from owning or operating a medical marijuana business.

Proposed Changes to the Ohio Rules of Professional Conduct

So where do we go from here? As stated above, the Chief Justice of the Ohio Supreme Court has indicated that the Court is aware of the issues presented by this advisory opinion, and will consider amendments to the Professional Conduct Rules later this month.

Our firm has submitted proposed amendments, and you can read about them by clicking here.

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