The Ethics of Advising California Marijuana Businesses

Albert J. Boro, Jr., Boro Law Firm

Californians will vote in November on Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act. Proposition 64 would establish and regulate a commercial marijuana industry. Its provisions include renaming the Bureau of Medical Marijuana Regulation as the Bureau of Marijuana Control, licensing commercial cultivators, distributors, and retailers, taxing retail sales and commercial cultivation of marijuana, and establishing labeling and testing requirements. (See text of Proposition 64, available at Cal. Secretary of State Website)

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If Proposition 64 passes, does an attorney assisting a client to comply with it and establish a commercial marijuana business violate duties “[t]o support the Constitution and laws of the United States and of this state,” and to “not advise the violation of any law”? See Cal. Bus. & Prof. Code §6068(a); Cal. R. Prof’l Conduct 3-210. California businesses growing or distributing marijuana and those assisting them would be in violation of the federal Controlled Substances Act, and could be subject to prosecution. See 18 U.S.C. §§ 2, 841 & 846; see also James M. Cole, U.S. D.O.J., Office of Deputy A.G., Guidance Regarding Marijuana Enforcement (Aug. 29, 2013) (describing federal enforcement priorities in view of state laws authorizing marijuana-related activities) (available here).

Guidance on these issues can be found in the BASF’s Legal Ethics Committee Opinion 2015-1 (June 2015), which addresses the issue whether California lawyers may ethically represent clients concerning medical marijuana enterprises in California (available at www.sfbar.org/ethics/opinion_2015-1.aspx). The Opinion recognizes that Californians need legal advice to operate medical marijuana businesses in compliance with California law and to enter contractual relationships necessary for any business endeavor, and denial of advice and assistance on those matters would deprive clients of essential legal representation. The Opinion concludes: “a lawyer may ethically represent the client … consistent with California Rule of Professional Conduct 3-210, provided that the legal advice and assistance is limited to activities permissible under state law and the lawyer advises the client regarding possible liability under federal law and other potential adverse consequences under state and federal laws.”

The Los Angeles County Bar Association’s Professional Responsibility and Ethics Committee issued Opinion No. 527 (Aug. 12, 2015), which also concludes that an attorney may, consistent with the California Rules of Professional Conduct, advise a client on California law regarding marijuana cultivation, distribution, and consumption (available at www.lacba.org/docs/default-source/ethics-opinions/ethics-opinion-527-rev.pdf). The Opinion reasons that “[a] lawyer is not advising a client to violate federal law when the lawyer advises the client on how not to violate state law,” and, if no advice is provided to evade federal law, the lawyer is not failing to support federal law under Section 6068(a). It states, “If a lawyer is permitted to advise a client on how to act in a manner that would not result in a California crime, the lawyer should be able to assist a client in carrying out that advice so the California crime does not occur – and a client should be able to receive such assistance from a lawyer.” Similar to the BASF Opinion, it recommends that attorneys limit the scope of representation to exclude any advice or assistance to evade federal law and to advise clients on applicable federal law and penalties.

Al Boro specializes in business litigation and antitrust, criminal defense, and technology law.  He is a member of BASF’s Legal Ethics Committee.