Colorado has created a complex regulatory scheme for the state’s new legal marijuana business, but don’t ask a lawyer to get too deeply involved in it.
Attorneys would be breaking one of the state’s rules of professional conduct if they help a marijuana business do simple things such as arrange a lease or negotiate a contract, according a Colorado Bar Association ethics opinion.
The opinion, released earlier this year, says lawyers who do more than give basic advice to marijuana businesses violate a rule that prohibits attorneys from helping clients do illegal things.
The sticking point is that marijuana businesses, while legal under state law, are illegal under federal law.
“Unless and until there is a change in applicable federal law or in the Colorado Rules of Professional Conduct, a lawyer cannot advise a client regarding the full panoply of conduct permitted by the marijuana amendments,” the opinion states.
Just such a change may be on the horizon, after a state committee of lawyers and judges recommended that the Colorado Supreme Court change the rule.
The proposed new rule would create an exemption for lawyers who help marijuana business do things that the lawyers believe are legal under Colorado law.
In a letter explaining the need for the rule change, attorney Marcy Glenn, the chairwoman of the Supreme Court’s Standing Committee on the Colorado Rules of Professional Conduct, wrote that lawyers are fearful of representing marijuana businesses because of the risk of being disciplined.
“The result appears to be that many Colorado citizens and businesses are being denied the benefit of legal counsel on important personal and business conduct,” Glenn wrote.
Despite the rule, the Colorado Bar Association ethics opinion says no lawyers have yet been punished for working with marijuana businesses.
A separate proposed rule change would allow attorneys to use marijuana legally under Colorado law without breaking a rule against the use of illegal substances.
The Supreme Court will accept written comments on the proposed rule changes until Feb. 25 and will hold a public hearing on the rules on March 6.
Not everyone on the professional conduct committee approved of the new rules.
Representatives from Colorado’s Office of Attorney Regulation Counsel, which prosecutes lawyers’ conduct violations, opposed the new rule on providing assistance to the marijuana industry.
“I don’t think there is a need for the new rule,” said James Coyle, the head of the office.
Attorney Anthony van Westrum, a member of the professional conduct committee, said he thinks the new rules don’t go far enough. They should also explicitly allow for lawyers to actually own marijuana businesses, he contends.
“More would be gained for Colorado’s effort to see that its marijuana commerce is in fact compliant with law if Colorado lawyers were permitted to engage in it directly, alongside other entrepreneurs,” he wrote in a September memo explaining his opposition.
Craig Small, an attorney and board member for the pro-marijuana group Colorado NORML, said the new rules will help the state have a more functional system for marijuana businesses.
“It doesn’t seem to be in the interest of fairness and the American way that you create a regulatory structure that is very, very complex … and at the same time not allow them access to attorneys to guide them through that structure,” he said.
John Ingold: 303-954-1068, email@example.com or twitter.com/john_ingold