LawPulse

A new ISBA advisory opinion says that lawyers can advise clients in the medical marijuana business and counsel local governments about zoning for cultivation centers and dispensaries.

As Illinois implements the Compassionate Use of Medical Cannabis Pilot Program Act (410 ILCS 130/5 et seq.), attorneys face an ethical dilemma. Illinois Rule of Professional Conduct 1.2(d) prohibits a lawyer from assisting clients in conduct he or she knows is criminal. And even though state law allows the cultivation, sale, and use of marijuana for limited medical purposes, marijuana is still classified as a Schedule I controlled substance under federal law.

The U.S. Department of Justice (DOJ)has said it does not intend to interfere with the medical use of marijuana if it is tightly regulated and controlled by state law. But possession, sale, and production of marijuana remain illegal under federal law. How can an attorney reconcile this contradiction?

The ISBA's Standing Committee on Professional Conduct addresses the issue in new Advisory Opinion No. 14-07. The opinion offers guidance on two specific 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 answer to the second question is simple: "yes," the opinion says in so many words. The answer to the first question is more lengthy and nuanced - but also "yes."

The opinion notes that despite its proscription against assisting criminal conduct, Rule 1.2(d) does permit "a lawyer [to] discuss the legal consequences of any proposed course of conduct with a client and [to] counsel or assist a client to make a good-faith effort to determine the validity, scope, meaning or application of the law." The committee opined that "the provision of legal advice to clients involved in the medical marijuana trade falls squarely within that exception."

But what about counsel that goes "beyond the provision of legal advice to medical marijuana clients," such as the "negotiation of contracts and the drafting of legal documents for such a client…"? Clearly, "an attorney who performs such work would be assisting the client in conduct that violates federal criminal law, even though such conduct is permissible under the new state law," the committee wrote. "But as quoted above, a lawyer may provide such assistance if the lawyer is assisting the 'client to make a good faith effort to determine the validity, scope, meaning or application of the law.'"

A balancing act

Drafting the opinion was a balancing act, and not all committee members supported the finished product. David Morgans, vice-chair of the professional conduct committee and author of the opinion, says that "the biggest sticking point for the professional conduct committee was the second issue of section 1 of the opinion - providing services that go beyond legal advice, i.e., transactional services." Morgans notes that the DOJ non-enforcement policy "depends on strict adherence to the [state] statute and regulations." Lawyers should be allowed to help clients conform their conduct to state laws, he says.

Chicago-based attorney and committee chair Sari Montgomery was not among the majority of committee members voting to approve the opinion. Rule 1.2(d) is explicit in its mandate, she says: A lawyer may not assist a client in criminal activity. She acknowledges the DOJ's non-enforcement statement, but notes that the DOJ "can change its position at any time." She also says the ARDC would be within its rights to pursue an attorney for misconduct under the current state-federal dichotomy.

But Morgans says that "the work done by a transactional lawyer, operating within the framework of the new Illinois statute and regulations, will assist the client in avoiding prosecution under the current federal non-enforcement policy, which depends on strict adherence to the statute and regulations." Montgomery and Morgans note that the ISBA has submitted a rule amendment to the Illinois Supreme Court Rules Committee; such a rule, they agree, would be the only truly safe harbor for Illinois attorneys who wish to assist clients involved in the medical cannabis industry.

Morgans and Montgomery agree that Illinois lawyers are free to advise clients about how the Compassionate Use Act applies and how to comply. This, Morgans says, "is far better than forcing would-be clients to forgo legal representation in transactional matters that lawyers routinely handle for other types of business."

Montgomery says that an issue arises when lawyers engage in work that furthers the business, like negotiating contracts or banking transactions. Morgans agrees, and notes that "the representation of such clients is not without some risk." He advises that the attorneys "maintain the appropriate degree of trust between lawyer and client." Most clients in the industry want to follow the law and the regulations, he says.

Don't counsel clients about how to break the law

As for clients who might want to violate the Compassionate Use Act, Montgomery and Morgans agree that attorneys should advise them about the consequences of violating the law and go no further. While there may be some grey areas, helping a client with purely criminal activity remains prohibited, Morgans says.

Lawyers who give advice "intended to assist a client in an outright evasion of the law (e.g., selling surplus cannabis on the side)" run the very real risk of being disciplined under Rule 1.2(d). Attorneys running afoul of Rule 1.2(d) may also be committing crimes that "could be prosecuted by a state's attorney or by federal authorities."

This advisory opinion was issued with caution. The ISBA Board of Governors directed that a preamble be placed at the top of the opinion warning of the risks associated with practicing in a grey area of the law. Montgomery says that the preamble, while not binding, provides valuable context for lawyers engaging in this practice area.