Washington Lawyer Can Operate Marijuana Business

By Samson Habte

July 22 — Lawyers in the state of Washington—one of five U.S. jurisdictions that have legalized recreational cannabis use—are generally free to operate marijuana-related businesses and to engage in personal use of the drug, the Washington state bar's ethics committee advised recently.

The opinion tackles questions the Washington Supreme Court left open last year when it adopted a new comment in the state's lawyer conduct rules authorizing members of the bar to provide legal advice to marijuana industry clients, but declined to approve another change that would have insulated lawyers from discipline for consuming the drug and investing in cannabis-related businesses.

‘Unfinished Business.'

In 2012, voters passed a ballot initiative that legalized the possession, sale and use of recreational marijuana in Washington.

Soon after, bar officials asked the state supreme court to make clear that although federal law still classifies cannabis as an illegal substance, lawyers who advise clients on marijuana-related activities permitted under state law do not violate Washington Rule of Professional Conduct 1.2. That rule provides that lawyers may not counsel clients to engage in criminal activity.

The court acted on that recommendation in November 2014 by adopting Comment [18] to Rule 1.2.

But the court declined to act on another recommendation: a proposal to adopt a new comment stating that “a lawyer who engages in conduct permitted under [Washington's marijuana laws] does not, without more, violate” Rules 8.4(b) (criminal acts reflecting adversely on honesty, trustworthiness or fitness to practice), 8.4(i) (disregard for rule of law), 8.4(k) (violating oath to abide by state and federal law) or 8.4(n) (conduct demonstrating unfitness to practice law).

Mark Fucile, who chairs the ethics committee, had said in a February 2015 article that “However useful the Supreme Court’s comment is for lawyers working with marijuana-related businesses, the comment leaves some ‘unfinished business' in two particular areas: personal use of marijuana by lawyers; and lawyers who themselves invest in marijuana-related businesses.”

Lawyer as Pot Proprietor

The Washington opinion appears to be the first advisory from a state bar's ethics panel to address whether lawyers may own and operate marijuana-related businesses.

The committee said lawyers may be involved in cannabis-related commercial enterprises so long as those businesses are “separate and apart” from their law practices and do not affect their ability to comply with the Rules of Professional Conduct.

The committee said “it would be inappropriate to interpret” Rules 8.4(b), 8.4(i), 8.4(k) or 8.4(n) “as prohibiting activities permitted by [Washington marijuana laws] unless and until there is a change in federal enforcement policy that puts compliance with [Washington's laws] in jeopardy.”

But the opinion cautions lawyers that they must abide by Rule 1.8(a), on business transactions with clients, if they plan to enter into such a business with a client.

Personal Use

The opinion is the fourth bar advisory (see box) to address whether lawyers who consume marijuana in jurisdictions that have decriminalized the drug violate provisions in Rule 8.4 that forbid lawyers to engage in criminal acts and conduct that reflects adversely on their fitness to practice.

The question is significant because states have eased marijuana laws at an increasing pace in recent years. Five jurisdictions now permit recreational use of the drug, and 24 have legalized medicinal use

The Washington panel concluded that lawyers generally may purchase and consume marijuana consistently with state laws authorizing recreational and medicinal use to the same extent nonlawyers may do so. But the committee qualified its advice with two caveats:

• marijuana consumption must not interfere with lawyers' ability “to provide competent legal advice and otherwise comply with” their ethical obligations; and

• the conclusion that marijuana use by an attorney does not violate ethics rules “may have to be reconsidered” if the federal government reverses course on the Department of Justice's recent announcements that it “does not wish to impede retail sales of medical or recreational marijuana pursuant to a state regulatory system unless the sales implicate other federal concerns such as money-laundering, sales to minors, sales outside of the state regulatory system and the like.” 

Advising Marijuana Industry

The opinion also addresses the conditions under which lawyers may advise clients on marijuana-related activities and transactions that are authorized under Washington state law but prohibited by the federal Controlled Substances Act.

The committee's advice on that subject tracks Comment [18] to Washington Rule 1.2, which reads:

At least until there is a subsequent change of federal enforcement policy, a lawyer may counsel a client regarding the validity, scope and meaning of [Washington's retail marijuana laws] and may assist a client in conduct that the lawyer reasonably believes is permitted by this statute and the other statutes, regulations, orders and other state and local provisions implementing them.

The committee said that although Comment [18] is limited by its terms to advising clients on Washington's retail marijuana laws, it is “broad enough to cover” advice and assistance about the state's medicinal cannabis laws.

The committee also stressed that the duty to provide competent representation requires lawyers to advise clients “about the full range of legal risks that can result from participation in a state law-regulated marijuana business.”

To meet that duty, it said, lawyers must inform clients about the risks of federal prosecution and “a host of civil law questions such as the potential effect of illegality under the CSA on the enforcement of marijuana-related contracts.”

To contact the reporter on this story: Samson Habte in Washington at shabte@bna.com

To contact the editor responsible for this story: Kirk Swanson at kswanson@bna.com

Full text at http://mcle.mywsba.org/IO/print.aspx?ID=1682.

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and Bloomberg BNA.

Copyright 2015, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.

Smoking Lawyers: 3 of 4 States Say ‘Yes'

The Washington committee is the third bar panel to conclude that lawyers do not violate ethics rules by using marijuana for recreational or medicinal purposes in states that have decriminalized such use.

The Colorado bar's ethics committee made the same finding in a 2012 opinion that dealt with medicinal use and was amended in 2013 to address recreational use as well. Colorado Ethics Op. 124 (2012).

In November 2014, the Connecticut bar's ethics committee reached the same conclusion with respect to medicinal marijuana use. Connecticut Informal Ethics Op. 2014-08 (2014).

However, a North Dakota ethics opinion concluded that an attorney “would not be able to live and use medical marijuana prescribed by a physician in Minnesota while being licensed to practice law in North Dakota.” North Dakota Ethics Op. 14-02, 30 Law. Man. Prof. Conduct 655 (2014).