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To say that regulation surrounding marijuana has changed in the last decade could go down as one of the bigger understatements in recent history. Over half of state governments have legalized at least some uses of marijuana. Adults over 21 can now use marijuana recreationally in 11 states and Washington, D.C., while 33 states have legalized medical marijuana.
And like any other business, cannabis ventures need legal advice. Law firms across the country have begun formal cannabis practices, but with marijuana still illegal at the federal level, things can get dicey.
From around 2013-2018, federal officials treated crimes relating to banking services provided to cannabis businesses as “low priority” – meaning they likely would not prosecute as long as financial institutions followed set criteria. This guidance came from what’s known as the “Cole Memo,” named for former U.S. Deputy Attorney General James Cole.
However, during his time as Attorney General, Jeff Sessions called for a “return to the rule of law,” issuing a memo directing U.S. Attorneys to enforce federal marijuana laws. Then, Attorney General William Barr informed Congress this spring that his policies would return to the Cole Memo’s guidelines until a legislative solution was found.
Confused yet? So are cannabis businesses.
The primary objective for many cannabusinesses seeking legal advice is to understand how federal and state regulations might impact their business. In most cases, the biggest challenge is finding banking services willing to take the risk. However, when changes in industry regulation come almost daily, tailoring legal advice can be a challenge. Many firms across the country have begun taking on cannabis clients, but very few who do are considered “Big Law.”
Two dozen AmLaw 200 law firms now have cannabis practices, but very few in AmLaw’s top tier have moved into the pungent pasture of marijuana law. It could be that larger firms still tend to lean to the conservative side, or they are busying themselves with an already full docket of clients. But for small and medium-sized firms, the ecosystem of marijuana businesses might be just the place to branch out – as long as they’re ready to keep close tabs on changing regulation.