Ohio Cannabis Businesses Will Have to Set Up Without Legal Aid

Ohio Cannabis Businesses Will Have to Set Up Without Legal Aid

State Supreme Court advisory notice says lawyers could be prosecuted for taking medical cannabis businesses on as clients.

August 15, 2016

As potential cannabis business owners scramble to get ready for Ohio’s soon-to-be rolled out medical marijuana program, they’ll have to do so without legal representation or any significant legal aid.

An Aug. 5 advisory opinion from the Ohio Supreme Court’s Board of Professional Conduct has handcuffed attorneys and potential cannabis business owners by stating that by taking on a marijuana business as a client, a lawyer would be in violation of federal law. As such, the Board advises Ohio lawyers to “not advise a client to engage in conduct that violates federal law, or assist in such conduct, even if the conduct is authorized by state law.”

“The advisory opinion issued by the Board of Professional Conduct highlights the state and federal law dichotomy facing attorneys practicing in states that have legalized cannabis for medicinal or adult use,” says Bret Kravitz, an associate at the Dickinson Wright law firm in Columbus, Ohio.

According to Tom Haren, attorney at Seeley, Savidge, Ebert & Gourash Co., LPA, a law firm on the west side of Cleveland, “until the Ohio Supreme Court amends the Rules of Professional Conduct, lawyers basically are useless to medical marijuana companies. We can’t help them directly. We can’t help them in negotiating contracts, we can’t help them apply for licenses, we can’t help them on compliance issues, with whatever the regulations are that get set up.” (Haren was also one of the two attorneys who asked the Board for advice on this issue.)

The only thing lawyers can safely advise on is the meaning of Ohio’s cannabis law and the conflict which arises with federal law.

“What this means for Ohio in the very near term is that we are looking at medical marijuana by LegalZoom,” he says.

“If the Ohio Board of Professional Conduct is saying they expect marijuana businesses to navigate a complex regulatory environment without legal advice, that is not a good ruling,” says Rachel Gillette, Shareholder in the Denver office of the Greenspoon Marder law firm, and a board member and former executive director of Colorado NORML. “I don’t think it benefits the public or the state for these businesses not to have legal advice especially for the purpose of compliance with state regulations.”

The Board of Professional Conduct, which reports to the Supreme Court, which in turn acts as the state’s legal licensing and disciplinary entity, issued the advisory statement. And according to Rick Dove, the Board’s director, the advisory opinion is just that: advisory.

“[The advisory opinion] is a non-binding advisory opinion so lawyers can adhere to it, which is suspected most of them will, or they can disregard it, and go ahead and risk the potential for disciplinary violation, disciplinary prosecution for violating rule 1.2(d),” he says.

But according to Haren, those attorneys who are willing to disregard that notice might not be the ones you want to do business with.

“I would be very careful, before working with any attorney who would ignore this advisory opinion. That type of a cavalier attitude, and this industry, I just don’t think mix here in Ohio.”

The only true workaround is Ohio’s Supreme Court adding a by-law or footnote similar to the one added by Colorado’s Court. As it currently stands,  Colorado’s comment allows an attorney to “counsel a client regarding the validity, scope and meaning of [the constitutional provision dealing with marijuana rights], and may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and the statutes, regulations, orders, and other state or local provisions implementing them. In these circumstances, the lawyer shall also advise the client regarding related federal law and policy.”

“We’ve been talking about submitting a proposed rule change to the board, for the board to consider along with the Ohio Supreme Court,” Haren says.

Ultimately, it’s at the Supreme Court’s discretion to make that rule change. And until then, cannabis businesses will have to navigate the complicated medical marijuana field on their own.

“The advice of a lawyer in a highly regulated, new industry can increase that business' likelihood for success and cannot be overstated” says Aaron Pelley, partner at Northwest Marijuana Law. “The Ohio decision robs an entire industry of the opportunity to avoid missteps and handicaps the entire community."

Mutual Exclusion

The advisory notice also made note of an attorney’s use of medical marijuana, saying that it is also not advisable to be a MMJ patient as it could put the lawyer’s character into question.

“A lawyer’s personal use of medical marijuana pursuant to a state regulated prescription… subjects the lawyer to possible federal prosecution, and may adversely reflect on a lawyer’s honesty, trustworthiness, and overall fitness to practice law,” the Board said in the advisory.