A Pot of Trouble

Marijuana law fascinates me because it's like the Wild, Wild West. I've taken continuing education classes on the topic and enjoy the interplay between state and federal law. I try hard to keep abreast of related legislation, which is an increasingly daunting task. The more liberal media would have you believe there is a rapidly growing groundswell of support for marijuana legalization/decriminalization. But while some surveys show that there is indeed is growing support, opposition from a variety of fronts is still strong. For this reason, cannabis-related businesses will face a plethora of legal and practical obstacles for years to come. The upside is that times are changing rapidly and the law will have to keep up with it.

On July 23, 2013, New Hampshire Governor Maggie Hassan signed HB573, a bill allowing certainly seriously-ill New Hampshire residents to use marijuana for therapeutic purposes. Some saw this as a sign of social progress. Others saw HB573, enacted into law as NH RSA 126-X, as a sign of the Apocalypse, ranking right alongside plagues of locusts and oceans turning to blood.

More than two years later, on June 9, 2015, the New Hampshire Department of Health and Human Services (DHHS) announced that three applicants had received approval to operate a total of four cannabis dispensaries in the state. These dispensaries -- also known as alternative treatment centers or "ATCs" -- are intended to each serve one of four geographic areas. None of these dispensaries are yet open. Plans for January 2016 openings seem increasingly less likely, for several reasons.

First, ATC operators face numerous land use challenges. For instance, under RSA 126-X:8, II , a dispensary cannot be located "in a residential district or within 1,000 feet of the property line of a pre-existing public or private elementary or secondary school or designated drug free school zones." Also, several Granite State municipalities have enacted zoning ordinances further limiting those areas of town where ATCs can set up shop. Dispensary operators must also bring their plans before local land use boards for approval. Public meetings to discuss those plans often ignite heated debate.

Operators face obstacles on other fronts, too. Marijuana-related businesses, where permitted under state law, have been frustrated in their efforts to open bank or credit union accounts. Most lenders don't want to be shut down by federal authorities for being involved with a business selling a Schedule I controlled substance which remains illegal under federal law. Consequently, the cannabis business remains, for the most part, a cash-only enterprise. This brings with it a slew of issues and problems, including the logistics of paying vendors and employees, performing accounting activities, and tax-paying. Proprietors also have to worry about keeping their prime-target properties and employees safe from robbers.

Even obtaining competent legal advice can be daunting. Attorneys interested in assisting dispensary operators face challenges under the New Hampshire Rules of Professional Conduct. The Rules provide that a "lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law." This begs the question: so how can a New Hampshire attorney ethically advise their clients regarding medical marijuana sales, distribution, and use, even if it is legal under state law, when such use is still criminal under federal law?

There have been no New Hampshire Ethics Opinions or Ethics Corners articles issued yet on the topic. (Although there have been several requests, including one by me, for one.) When the Ethics Committee looks at the issue, I predict they'll consider how other state bars have answered this question:

• Some states (such as Connecticut and Maine) urge attorneys to know where the line is drawn between consultation/explanation and participating in criminal enterprises. If New Hampshire were to adopt this approach, lawyers could explain the requirements of RSA 126-X to a client, but might not be able to assist an operator in negotiating a contract to facilitate the purchase or sale of marijuana.
• Other states (like Arizona) feel that representation would not be prohibited because it is important for clients to have the assistance of counsel in complying with state law. If New Hampshire were to adopt this approach, then representation could be broader. However, even then, certain activities might still be prohibited.
• Yet other states, while not changing their own versions of Rule 1.2(d), are adding corresponding comments for guidance.

(To learn more about the ethical components of marijuana law -- including personal use by attorneys -- click here.)