20:59, July 31 338 0 law.com

2017-07-31 20:59:05
We Asked 4 Marijuana-Industry Lawyers 4 Questions. Here's What They Said

DENVER—Changing federal policies, nascent state laws, banking and taxes. Lawyers who attended the first-ever Cannabis Law Institute here had a lot to talk about.

We asked four attorneys from California, Colorado, Pennsylvania and Florida for their thoughts on what’s happening now in the industry, what they’d like to see happen and what will happen five years from now. We also asked about any advice these lawyers would give to fellow members of the bar who are thinking about representing a client or otherwise being involved in the cannabis market.

Here are the highlights, edited for length and clarity.

What is one thing that keeps you up at night?

Brian Vicente, partner, Vicente Sederberg, Denver: Jeff Sessions. Just the fact that he exists in a position of power is concerning to me because he has extremely outdated views on marijuana, and I can see him going in a lot of different directions in terms of coming after patients, coming after lawyers, coming after business owners.

Jonathan Robbins, chair of regulated substance practice, Akerman, Fort Lauderdale, Florida: The one thing that keeps me awake at night is federal prohibition because at the end of the day we are all probably technically violating rules of professional conduct of our respective states. I don’t think we’re going to find ourselves on the chopping block. We won’t be the most attractive targets. But that’s what scares the bejeezus out of me.

Catia Kossovsky, Kossovsky Law, Pittsburgh: Criminality issues under federal law. I know that at least in Pennsylvania the rules of professional conduct have been amended to allow attorneys to represent clients in the state as long as they’re complying with state law and you advise them of the other laws that affect them, so that they’re aware of the risks that they’re taking. Coming here and sitting through the CLE and hearing all these cases that are happening and how it affects people really makes you realize this is an amazing and very scary area of law.

Amanda Conley, partner, Brand & Branch, Oakland, California: I focus my practice on intellectual property protection and also reviewing labeling and packaging and marketing and anything public facing. So I definitely worry that the [Food and Drug Administration] is going to suddenly start taking more enforcement action against our clients. And we warn our clients about the risk of things like selling [cannabidiol] products, making health claims—selling cannabis products in general. And so I worry there’s going to be a policy change that we don’t know about until after the enforcement happens.

What would you most like to see happen in Washington in terms of marijuana policy?

Vicente: I would like to see Congress deschedule marijuana, so move it out of the controlled substances scheduling system, move it over to the ATF, [the Bureau of] Alcohol, Tobacco and Firearms [and Explosives] … and then allow every state to establish its own rules about marijuana.

Robbins: While it’s probably not the best workable solution, what the Obama administration did with the Cole memo and Fincen guidance kind of worked. So if you reschedule cannabis under the Controlled Substances Act into another category, my fear is that then you create a situation where you’re governed by the FDA and all of these mom-and-pop operations are going to be out here in Colorado and California, they won’t have the wherewithal to undergo or deal with the regulatory burdens of FDA trials and things like that.

So rescheduling makes me a little nervous. Perhaps descheduling might be the better alternative—the federal government lays off and leaves it up to the states. But I don’t know what the best workable solution is here. I don’t know that there is one.

Kossovsky: I think it would be amazing if it was rescheduled to a Schedule III or even descheduled altogether, but I don’t think altogether will happen. Or if banking was something that was able to be resolved. Or taxes could be clarified. These are businesses that have been authorized to operate under state laws but because they’re in this industry they’re going to be treated very differently than any other business that is licensed under state laws. And so anything that can be done in order to level the playing field.

Conley: I would like to see a change to the Lanham Act, which governs trademark registration and use in the United States. And the reason is the Lanham Act does not in its text actually require that the use of a trademark in interstate commerce be federally lawful. But it has been interpreted to mean that the use has to be lawful.

So what we would like to see is that the Lanham Act allows for interstate commerce use that is lawful in the state that it is used. So if I’m using a mark in multiple states, for example, pursuant to license agreements with different producers, I am engaging in interstate commerce that is lawful in the places I’m engaging in it. But I still can’t get federal trademark protection in connection with my brand because my use is not federally lawful. So I would like to see a change, either to the Lanham Act or to [U.S. Patent and Trademark Office] policy that would allow me to rely on that interstate use, which the federal government has interpreted in-state use to be interstate.

What advice would you give to colleagues who are starting to take on marijuana clients or considering establishing a practice in the field?

Vicente: I think getting a robust understanding of the marijuana laws, part one, is kind of a no brainer. Part two would be just having a general feel for the facts of law generally because I think if you just do marijuana law and you try to do any business transactions you’re going to get into hot water. So that, and try to get retainers.

Robbins: The first thing that I did was look at the practice from an ethical perspective. I don’t want to get myself, my clients or my law firm into any kind of hot water given the federal prohibition. Any lawyer who wants to get into this business needs to proceed very cautiously and read the rules of professional conduct very carefully. Find out if your local bar or your state bar has issued any guidance for attorneys operating in this space. And you need to give your clients similar advice.

Kossovsky: That they really need to learn all the issues affecting the industry and that they need to be always cognizant of the fact that it’s still illegal federally and make sure that all of their clients are aware of that. And that anyone they do business with is aware of that.

Conley: I would say welcome, we need you, this is great. But don’t try to do it all. Just like you wouldn’t try to serve all of your clients’ needs in another industry, i don’t think there’s any such thing as a cannabis lawyer. I think there’s a cannabis compliance lawyer, there’s a cannabis corporate lawyer, there’s a cannabis intellectual property attorney like I am. But the idea that because you work in cannabis you can advise your clients on all aspects of their businesses I think that’s short-sighted. I think that we need to teach our clients that they need to seek out specialists in the same way you would in any industry.

Five years from now, what do you think the state of medical and recreational marijuana will be in the United States?

Vicente: Five years from now I believe marijuana will be legal at the federal level and every state will have a medical marijuana law. I’m fairly confident of that. There’s a lot of turmoil going on in D.C. but it just seems like the momentum is heading in that direction.

Robbins: I’d like to be optimistic and say that within the next five years you are going to see the federal government deschedule cannabis from the Controlled Substances Act.

Kossovsky: I don’t know for sure in five years but maybe in 10 years i think medical research will be done—it pretty much takes that long to get results and information—that concludes marijuana helps with certain ailments. And that I think will change how marijuana is treated. And once it either does get descheduled or things get resolved, I foresee that Big Pharma will come in and acquire a lot of these companies and that drug companies such as Walgreens and Rite-Aid will then come in and buy the dispensaries. And so eventually it will be just like any other regulated industry.

Conley: It’s very hard to say with the federal government at this point. I see the states continuing to develop. I see, hopefully, states working together more. On the panel we just talked about states working together on packaging and labeling. I’m optimistic that we’ll see change federally, that we’ll see an opening up. I’m very optimistic that we won’t see a scaling back, that there’s a recognition that the sky hasn’t fallen, this is a big job creator, that there’s a lot of money in this for everyone. It’s a great opportunity for equity and equality and bringing more women and people of color and traditionally underserved consumers and businesses folks into the industry. So I hope that we continue to push ahead that way, but I’m not relying on the federal government to fix this for us.