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Cannabis Businesses Can be Sanctioned by Georgia Law

Updated: Jul 10, 2021

Lawyers who counsel companies in Georgia’s fledgling medical marijuana industry could face disciplinary sanctions under a recent decision by the state Supreme Court.

Even though the sale of medical marijuana oil has been legalized in Georgia, it is still a crime under federal law, the court said. The decision could create havoc in a highly regulated industry that relies on legal counsel.

Medical marijuana companies and their lawyers say they’ll overcome — or defy — the court’s order.

“I think this is going to become wallpaper,” said Sanford Posner, an attorney and co-founder of the Georgia Cannabis Trade Association. “I would be surprised if attorneys who practice in this area don’t print out this decision and hang it on their wall as a red badge of courage.”

Possible punishment for lawyers found to have violated the rules of professional conduct include reprimands, suspensions, even disbarment.

About 70 applicants are waiting on the Georgia Access to Medical Cannabis Commission to award licenses to six companies. They will be allowed to grow and manufacture medical marijuana oil that can have no more than 5% THC, the compound that gives marijuana users a high.

These companies will have one year to begin operations. Each one will be allowed to open five dispensaries, providing for registered patients suffering from conditions such as seizures, terminal cancers and Parkinson’s disease.

Medical marijuana oil companies have a right to use attorneys to make sure they’re following Georgia’s laws, said Kevin Quirk, CEO for Harvest Connect, one of the companies that applied for a state license. But he said he doesn’t need lawyers to run his business.

“We know how to bring quality product to Georgia patients without getting the lawyers involved,” Quirk said. “I personally don’t think it’s going to affect us very much.”

Some states amended their rules

At issue is Georgia’s rule of professional conduct for lawyers. It says a lawyer cannot counsel a client to engage in conduct the lawyer knows to be criminal.

That creates an ethical dilemma for Georgia lawyers in the medical marijuana field because federal law classifies marijuana as a Schedule 1 drug. Anyone found selling enough of it can be charged with a felony and face prison time.

To solve any potential problem, the State Bar of Georgia asked the Supreme Court of Georgia to adopt an amendment granting exceptions to lawyers assisting clients in fields permitted under Georgia law, but which could be criminal under another law.

In its request, the State Bar noted that the medical marijuana industry is highly regulated and touches on dozens of areas of the law.

“It is certainly in the public interest for lawyers to be involved,” the State Bar’s filing added. “Aside from the benefit to Georgia businesses that hope to engage in the cannabis business, lawyers can ensure that the industry is regulated as the Legislature intended; they can also ensure that the statute is not abused by those who would misuse it for criminal enterprise.”

Of the more than 40 states that have legalized the use of medical marijuana, about half amended their rules to allow lawyers to counsel clients in the cannabis industry. Others have issued advisory opinions authorizing an exception, the bar said.

Georgia is now the fourth state to deny an exception, joining Oklahoma, South Dakota and Mississippi, according to court records.

‘This opinion creates a quandary’

In their unanimous, unsigned opinion, the Supreme Court’s justices said they understand the desire of some Georgia lawyers to assist the fledgling cannabis industry.

“But this court has long prohibited Georgia lawyers from counseling and assisting clients in the commission of criminal acts,” the opinion said. “The passage of a Georgia statute purporting to permit and regulate conduct that constitutes federal crimes does not change that long-standing principle.”

The court noted that the State Bar’s request was not limited to conduct related to medical marijuana oil. “Indeed, the proposed amendment is quite broad and might well apply to a wide range of conduct constituting a crime under federal law that simply has no corollary state criminal sanctions,” the court said.

Paula Frederick, the State Bar’s general counsel, declined to comment.

Its former executive director Jeff Davis, who was at the State Bar when the amendment was formulated, said the organization simply sought a “safe harbor” that allows lawyers to provide much-needed advice to medical marijuana businesses.

“This opinion creates a quandary for lawyers who have advised or plan to advise Georgia companies that are trying to comply with state law,” Davis said. “By subjecting lawyers to disciplinary sanctions, it potentially creates a situation where these companies can’t seek legal advice.”

Companies also would be hard-pressed to retain out-of-state lawyers to assist them in Georgia, Davis added. That’s because many are not licensed to practice here and, even if they are, they have to adhere to the same rules of professional conduct, he said.

State Rep. Micah Gravley said the goal of Georgia’s law is to provide safe and lab-tested oil for those who need it.

“We wanted to do it in a legal manner, and we went about it the right way,” said Gravley, a Republican from Douglasville who has sponsored medical marijuana oil bills. “We debated this in the halls of our Capitol, and we changed the law here in Georgia. It seems as if we’re met with roadblock after roadblock when we simply want to help people in need.”



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