Cannabis Competence

For those who read yesterday’s post, I made it home safely from my mom’s.

In Vermont, the first clause in Rule 1.2(d) states that a lawyer “shall not a counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.”  It draws no distinction between state & federal crimes, or between crimes that are enforced less vigorously than others.

As such, several years ago, lawyers expressed concern that the rule prohibits a lawyer from assisting a client on cannabis-related issues that are legal under Vermont law.  Why?  Because to do so would assist the client to violate federal law.

So, in 2016, the Vermont Supreme Court amended Rule 1.2(d) to include Comment [14].  The Comment clarifies that a lawyer does not violate Rule 1.2(d) by assisting a client in conduct that the lawyer reasonably believe is legal under Vermont law, if the lawyer also advises the client of the potential consequences under federal law.

The amendment does not relieve a lawyer of obligations imposed by other rules.  Most importantly, while it is not a disciplinary violation to assist clients in conduct that is legal under Vermont law, a lawyer remains obligated to provide competent representation on the cannabis matter.  Stated differently, while not a violation to do it, it’s a violation to do it incompetently.

To me, competence includes:

  • understanding Vermont’s legal and regulatory framework;
  • keeping abreast of changes in state law, federal law, federal regulations, and enforcement policy; and,
  • knowing that cannabis, marijuana, CBD, THC, and hemp aren’t one and the same.

It’s an evolving area of the law.  My sense is that most lawyers are on top of the changes – enacted and proposed – in Vermont law.  There’s been movement at the federal level too.

For instance, last fall, the DEA reclassified certain drugs that contain cannabidiol.  Several sources, including Forbes, the American Farm Bureau Federation, and the Brookings Institution have commented the 2018 Farm Bill’s impact on hemp and CBD laws and regulations.  And, as reported by Forbes, JDSupra, and the Canna Law Blog, the Second Circuit recently issued an opinion that could spur further change. although the dissenting judge isn’t so sure.

Finally, I’d argue that competent representation includes thorough advice on money.  As Vermont Biz points out, for businesses that are otherwise legal under state law, federal law can create hurdles to financing.

Then, once financed, there’s the issue of what to do with the revenue.  At the end of May, Governing posted Despite State Support, Marijuana Banking Bill May Sink Again in Congress.  To me, the post highlights the need for attorneys – whether representing businesses or banks – to have a firm grasp of banking laws and regulations insofar as they relate to the cannabis industry.

To summarize: yes, we changed the rule to clarify that lawyers do not violate it by assisting clients in conduct that is legal under state law.  But, don’t forget, the change did not relieve lawyers of the duty to provide competent representation when doing so.

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