Federal - State Law Conflict

Yesterday sparks flew as word was out that the DEA would be making some important announcements relating to the treatment of marijuana as a Schedule 1 substance under the Controlled Substances Act (CSA).

Today, the excitement died down as the DEA issued a 180-page denial (inclusive of attachments; the actual denial is only three pages long) of a petition to
Continue Reading DEA Buzzkill: Marijuana Remains Illegal Under Federal Law

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

There’s a good argument to be made that James Cole has had a bigger impact on the U.S. cannabis industry than
Continue Reading The Week in Weed: July 29, 2016

Welcome back to The Week in Weed, your Friday look at the world of legalized marijuana.

Nebraska and Oklahoma may not have had their day in (Supreme) Court, but they are undeterred in their fight against
Continue Reading The Week in Weed: July 1, 2016

Lack of access to the banking system remains one of the biggest problems for the cannabis industry.  Despite tremendous growth in the past few years and even more aggressive growth expected in the near future,  it is still difficult for cannabis businesses, what bankers like to call marijuana related businesses (MRB), to establish a banking relationship. As more and more states legalize the use of marijuana, has there been any progress?

First, a little history.  Banks are prohibited from banking MRBs under federal law and risk prosecution for money laundering and aiding drug trafficking.  In February 2014, following the issuance of the Cole Memorandum by the Justice Department, the Department of the Treasury Financial Crimes Enforcement Network (FinCEN) and the Department of Justice issued concurrent guidance to clarify how financial institutions could serve MRBs consistent with their obligations under the Bank Secrecy Act.  The FinCEN  guidelines state that in determining whether to serve an MRB, a financial institution should conduct due diligence including: determining whether the MRB is properly licensed, reviewing the license application, requesting from state authorities available information about the business, understanding the products and customers of the business, monitoring the business activities, remaining alert for suspicious business activities, and conducting periodic reviews of the business.  A financial institution also should consider whether an MRB implicates one of the priorities of the Cole Memorandum.  Finally, if a financial institution does decide to service an MRB, it would be required to file a Suspicious Activity Report.Continue Reading Banking Marijuana Related Business: An Update

Ohio Governor Kasich’s presidential campaign went up in smoke.  So did his opposition to marijuana legalization in the medical context when he recently signed into law Ohio’s Medical Marijuana Act (“OMMA”).  He went from unartfully quibbling with Stephen Colbert about marijuana’s “problem” despite seemingly not being harmed by his own admitted usee to making Ohio the 26th state to enact medical-marijuana legislation.  (To read more about the medical marijuana laws in Pennsylvania, New York, Connecticut, and New Jersey, please see our articles here and here).  But there is no smoke or fire in OMMA, both literally in the sense that smoking remains a banned form of consumption, and metaphorically for employers who wish to continue to treat marijuana as a banned substance in the workplace.

OMMA goes into effect in early September.  Under the law, individuals diagnosed with a “qualifying medical condition,” who have registered with the State Board of Pharmacy are permitted to use certain forms of medical marijuana for medicinal purposes.  As mentioned above, do not expect Harold and Kumar to have smoke billowing from their car at a White Castle drive-thru any time soon though, as OMMA explicitly prohibits smoking or other combustion of pot.  Rather, patients are only permitted to use oils, tinctures, plant materials, edibles, patches, or any other form approved by the State Board of Pharmacy, including vaporization.
Continue Reading No Smoke or Fire in New Ohio Medical Marijuana Act

Unless you’ve been living under a rock for the past year, you know that the U.S. is engaged in picking a new President.  Although issues such as immigration, income inequality, foreign policy and religious freedom have dominated the headlines, all the candidates are on record regarding marijuana: its medical uses, whether it should be rescheduled, how the federal-state legal discrepancies
Continue Reading Election 2016: Where do the Candidates Stand on Marijuana?

As some Pennsylvanians are breathing sighs of relief in light of the recent passage of House Bill SB3, which legalizes certain forms of marijuana for medicinal purposes, there has yet to be an official change to the Pennsylvania state legal ethics rules that would instruct and ultimately protect lawyers advising clients in the medical marijuana industry.
Continue Reading Legal Advice and Marijuana Clients in PA: Clearing the Ethical Weeds

Two years after Colorado amended its constitution to legalize and regulate the recreational use of marijuana, in December 2014, the states of Nebraska and Oklahoma filed a motion in  the U.S. Supreme Court for leave to file a complaint against the state of Colorado, ultimately seeking to invalidate portions of Colorado’s constitutional amendment concerning marijuana and to enjoin its implementation.

Upon request by the Supreme Court, the United States submitted an amicus brief in support of its views on the enforcement of the Controlled Substances Act (“CSA”) in states wherein the sale and distribution of marijuana has been de-criminalized.  After citing to memoranda from 2009 and 2013—in which the Department of Justice provided instructions in reviewing the prosecution of CSA violations related to marijuana use in these states—the DOJ expressed the view that the Plaintiff states’ motion should be denied.  The United States proposed denial of the motion because the case was not “appropriate… for the exercise of [the Supreme Court’s] original jurisdiction” and “[e]ntertaining the type of dispute at issue here—essentially that one State’s laws make it more likely that third parties will violate federal and state law in another State—would represent a substantial and unwarranted expansion of [the Supreme Court’s] original jurisdiction.”

The United States continued by citing Supreme Court precedent related to the Court’s original jurisdiction in disputes between or among states.  “The model case for invocation [of such] is a dispute between States of such seriousness that it would amount to casus belli if the States were fully sovereign” (emphasis added).  The United States rejected the idea that the case at bar fell into the above category, and provided examples where original jurisdiction was found (e.g., claims that an agent of the defendant state was engaging in environmental harms against plaintiff state).  Further, the United States argued that original jurisdiction is proper only where one state’s actions amounted to the direct cause of harm to another state.  Essentially, the United States argued that the Supreme Court should hear cases only where one state’s actions were the direct cause of another state’s harm.  The Plaintiff states’ contention that the de-criminalization of the sale and distribution of marijuana in Colorado would increase the amount of third-party crime in their states simply did not meet the referenced standards as Colorado did not direct or authorize such action, the United States argued.

Moreover, the United States appeared unpersuaded by the Plaintiff states’ assertion that the Supreme Court was the only venue in which they could sue Colorado.  However, the United States pointed out that the states could engage in suit at the district court level, and noted that two suits raising the issues at bar were pending in the District of Colorado courts. 
Continue Reading Marijuana Controversy Not a High Priority for Supreme Court

More and more cities and states are legalizing the use of marijuana for medical and recreational use.  The good news is that means in those jurisdictions the local and state police will not arrest you if your use conforms to the local/state law-medical use states require a prescription and recreational use laws usually limit the amount of marijuana one can possess.  In addition, federal prosecutors, at least under the current administration, will not prosecute you for use which is legal under state and local laws.

Now the bad news.  Marijuana use is still illegal under federal law, 21 U.S.C. § 801 et seq., since it is listed as a schedule 1 controlled substance.  That means its use is not protected by the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq., (“ADA”) because the ADA does not protect the current use of an illegal drug.  Moreover, most employees are at-will employees, so they can be fired for good cause, bad cause, or no cause.  Thus, if an employer wants to fire employees who use marijuana away from work, it is likely that the employer can legally do so.
Continue Reading Legalizing Marijuana – Off-Duty Use – An Employer’s Quandary

If you are in Washington, D.C., you can, without criminal penalty, possess and smoke marijuana, but not in public. You can grow it, you can also grow marijuana.  You can’t sell it, but you can give it away.  If you cross the Potomac River into Virginia, it is illegal to possess, grow or sell marijuana.  If you drive into Maryland you could receive a civil fine for possession of up to 10 grams of marijuana and be arrested for possessing greater amounts.  Even in Colorado where marijuana is notoriously fair game, you can still be fined if you are caught in possession at the Denver Airport, although, as noted by Forbes, the chances of getting caught are relatively small.  And let’s not forget that under federal law possession, distribution and cultivation of marijuana remains illegal.  Confused yet?

In the Begining

In 1970 Congress passed the Controlled Substances Act (“CSA”) which regulated the manufacture, possession and sale of a variety of drugs, chemicals and plants.   The CSA classified drugs, chemicals and plants into five different schedules based upon several factors related to the substance’s history and potential for abuse, impact on the public health and state of scientific knowledge of the substance.  Marijuana was classified as a Schedule I substance, along with heroin and LSD, to name a few, and remains a Schedule I substance to this day.  Schedule I substances are subject to the most stringent restrictions.  Under the CSA, the Attorney General of the United States has the ability to reclassify or add or remove a substance from a schedule based on certain evaluations and findings.

Over time, the body of medical research on marijuana grew and public opinion concerning its use changed to a point that in 1996 California became the first state to legalize the medical use of marijuana.    By the year 2000, seven other states followed suit.  Then in 2012 two states, Colorado and Washington, legalized the recreational use of marijuana.  Then all hell broke loose! The full legalization of marijuana is now a mainstream political issue confronted by states across the U.S.
Continue Reading Where Are We and How the Heck Did We Get Here?