This Saturday, February 25, I will be speaking on a panel at the MPP Ohio Canna-Business Seminar in Columbus. My firm, Seeley, Savidge, Ebert & Gourash Co., LPA, is also one of the event’s sponsors.
MPP promises “a deep dive into Ohio’s emerging medical cannabis program in Columbus.” The Seminar will feature policy and industry experts, as well as Ohio medical marijuana regulators. Topics covered will include best practices for operating in Ohio’s medical marijuana market, accounting, tax, and liability issues.
The Seminar will be hosted at the Sheraton Columbus Hotel at Capitol Square, located at 75 East State Street, Columbus, OH, 43215. Tickets are $600 each, two for $1,000, or three for $1,300. The seminar will run from 10 a.m. to 5:30 p.m. and will include a boxed lunch. But, shoot me an email at email@example.com and I’ll give you a promotional code for a discount on your ticket!
Click here to register for the event. See you there!
Ohio medical marijuana cultivator territories announced
The Department of Commerce recently identified how it will designate territories for Ohio medical marijuana cultivators. By way of background, the current draft of Section 3796:2-1-01(A) provides for up to three Level I cultivators and three Level II cultivators in each of 4 designated territories. This is a change from the original drafts where the Department was to split up Ohio into 12 designated territories.
The Department announced recently precisely how it intends to divide the state for purposes of cultivator licenses, and the result ends up with Northeast Ohio’s quadrant including what will likely be 4 of the more competitive counties in the state for medical marijuana cultivation: Cuyahoga, Summit, Mahoning, and Lorain. Here is an image from the Department’s announcement:
This design runs the real risk of making some quadrants so competitive that well-qualified applicants are shut out based solely on the number of applicants in that territory. In other words, the 5th best Level I applicant in Northeast Ohio may very well be a more qualified applicant than the top applicant in Northwest Ohio, but there will only be 3 Level I licenses awarded in Northeast Ohio. Furthermore, such large territories may encourage consolidation of applicants in closer proximity, as opposed to having cultivators more widely disbursed as would be the case if Ohio had a larger number of territories.
It will be interesting to see if this map changes at all as we continue with the rule-making process, and do not be surprised to see some border counties transition into neighboring territories (for instance, Lorain could very well end up as part of the Northwest quadrant).
Changes to Ohio medical marijuana dispensary rules
On January 27, the Ohio Medical Marijuana Advisory Board met and received an update from the Board of Pharmacy on the comments received relative to the proposed dispensary rules. Notably, the Board referenced three major changes to its initial draft rules:
New dispensary rules have not yet been issued, but rest assured I will post an update when they are.
Proposed Ohio medical marijuana processor rules
The Department of Commerce also proposed its initial set of draft rules for Ohio medical marijuana processors. The first round of public comments are being accepted through close of business on February 10, 2017. Here are the highlights:
Check out the latest draft processor rules by clicking here.
We know from the draft cultivator rules that Ohio will award “plant-only processor” licenses to cultivators who wish to sell plant material directly to dispensaries, although those entities will have to meet more stringent packaging and labeling requirements than other cultivators. These plant-only processor licenses will cost $5,000 for Level I cultivators and $500 for Level II cultivators.
Stay tuned as Ohio continues its rule-making process. And, in the event you are interested in getting involved in Ohio’s medical marijuana industry (whether as a cultivator, processor, or dispensary operator), don’t hesitate to contact us at (216) 566-8200 for a free consultation to discuss your plans.
Hi everyone – it’s been a little while since I’ve posted here. Our family moved, work got busier than anticipated (which is a good thing), and all of that occurred right smack in the middle of the holiday season. But fear not, the Ohio Marijuana Law Blog is back in full swing to keep you updated on all of the latest news on medical cannabis in the Buckeye State.
Ohio continues the medical marijuana rule-making process
The rules for Ohio medical marijuana cultivators will be finalized in May, with the rules for medical marijuana dispensaries, processors, testing laboratories, and recommending physicians finalized in September. The Ohio cultivator rules have been submitted to the Common Sense Initiative, and public comment on the rules are being accepted through this Friday, January 27. Ohio dispensary rules are in their initial draft, although this round of public comments closed on January 13 – there will be other opportunities to provide input.
Some highlights from these latest drafts:
I’ll cover each of these drafts in greater detail here in the coming days. It is interesting to note that a draft of House Bill 523 originally required a pharmacist to be present in medical marijuana dispensaries, although that requirement was removed prior to the law going up for a vote. Now it seems the Board of Pharmacy is seeking to re-insert a similar requirement.
The United States Senate Has Yet to Confirm Attorney General Nominee Jeff Sessions
Alabama Senator Jeff Sessions, whom President Donald Trump has nominated to be his next Attorney General, is waiting on confirmation from the United States Senate. His confirmation hearings generally went off without a hitch, and when asked about legal marijuana, Sessions would not commit to “not enforcing federal law,” although he acknowledged the problem with scarce federal resources.
On Tuesday, Sessions was not quite as emphatic on the issue as he has been in the past. In reference to the guidelines issued by the Justice Department in 2013 that effectively left marijuana law enforcement up to individual states, Sessions told Sen. Leahy “some of them are truly valuable in evaluating cases, but, fundamentally, the criticism I think that is legitimate is that [the guidelines] may not have been followed.” Sessions went on to say he would need to use “good judgment” when deciding how to enforce federal marijuana laws, should he be sworn in as Attorney General, adding “I know it won’t be an easy decision, but I will try to do my duty in a fair and just way.”
Following his confirmation hearings, Sessions provided written responses that again addressed legal marijuana (which are conveniently packaged in Tom Angell’s new daily marijuana newsletter, which you should all subscribe to):
There can be no doubt that Senator Sessions is a marijuana prohibitionist, but I do think it is fair to say that his responses are no worse than those given by President Obama’s Attorney General, Loretta Lynch, during her own confirmation hearings in 2015. She said the following when questioned by Senstor Lindsey Graham:
“Marijuana is still a criminal substance under federal law. And it is still a crime not only to possess, but to distribute under federal law.”
“With respect to the marijuana enforcement laws, it is still the policy of the administration and certainly would be my policy, if confirmed as attorney general, to continue enforcing the marijuana laws, particularly with respect to the money-laundering aspect of it.”
And she also said this when questioned by Senator Sessions:
“Well, senator, I certainly don’t hold [the view that marijuana should be legalized], and don’t agree with that view of marijuana as a substance. I certainly think that the president was speaking from his personal experience and personal opinion — neither of which I am able to share.”
Sessions can rescind the 2013 Cole Memo at a moment’s notice following his confirmation, although there are significant practical and political risks to doing so: more than half the country has legalized some form of medical marijuana and the industry supports thousands of jobs and a significant amount of taxes to cash-strapped states. For some additional context, see this great article over at The Cannabist: “Would he revive the war on drugs? Five myths about Sen. Jeff Sessions.“
It should also be remembered that Donald Trump has previously expressed his support for legal marijuana, including saying that he supported medical marijuana “100 percent.” His new press secretary, Sean Spicer, implied during Sessions’ confirmation hearings that any member of Trump’s cabinet would implement the “Trump agenda:”
Stay tuned as Ohio moves forward with implementing its medical marijuana program over the coming months.
The time between “legalization” and implementation seems to have caused confusion about the current use of medical marijuana in Ohio. HB 523 became “law” on September 28, 2016. Regulations for cultivators are set to be finalized by May 6, 2017. Regulations for physicians, testing laboratories, processors, patients, caregivers, employees, and dispensaries are scheduled to be finalized on September 8, 2017.
There is at least one medical center where a physician or physicians issue “recommendations” for medical marijuana to patients who are found to have a “qualifying condition” under H.B. 523. This center also issues an “affirmative defense card.” Since none of the procedures are in effect at this time, this practice presents several issues.
One issue is whether a physician can recommend marijuana to patients before he/she has a certificate to recommend. Currently, there are no final regulations in place for physicians to obtain a certificate to recommend medical marijuana. Additionally, according to H.B. 523, a patient can only legally obtain medical marijuana after receiving a written recommendation from his or her doctor that certifies a certain number of criteria are met. There are currently no regulations in place that would enable a physician to issue such a recommendation. Thus, it would seem to be currently impossible for a “certificated” physician to lawfully “recommend” the current use of medical marijuana in Ohio.
Under these circumstances, no individual can currently possess an “affirmative defense card” that would be valid in Ohio. Perhaps the “affirmative defense card” issued by this medical center is effective in states that have reciprocity with other medical marijuana states? The closest of these states to Ohio is Michigan. In Michigan, a visiting qualifying patient can only obtain medical marijuana if that patient has an ID card or its equivalent “issued under the laws of another state, district, territory, commonwealth, or insular possession of the United States.” Since the affirmative defense card is not issued by the State of Ohio, as that program is not yet operational, it is doubtful that Michigan dispensaries can legally dispense marijuana to patients who have been issued an ID card by a private Ohio medical center.
If Michigan dispensaries do dispense medical marijuana to Ohio patients with a private “affirmative defense card,” another related issue is whether patients are violating federal law by bringing marijuana across state lines to Ohio. Former Deputy Attorney General, James Cole, issued a memorandum to all United States Attorneys on August 29, 2013 to provide guidance on the proper prioritization of marijuana enforcement. One enforcement priority, where the Department of Justice may prosecute, is if there is diversion of marijuana from states where it is legal to other states.
Ohio has enacted a law that set forth a process that will make medical marijuana legal, but the details of that legalization are being phased in over a two-year period. This seems to have resulted in marijuana being recommended and dispensed to, and consumed by, citizens of the State of Ohio before these practices are lawful. We are not aware of any criminal prosecutions arising out of this situation, however, and we do know that individuals are acting as if they believe it is legal to consume medical marijuana in Ohio. We would say it is not.
The cannabis community has been eagerly waiting to learn whom Donald Trump would nominate as the nation’s top law enforcement officer, and it appears we have our answer: Alabama Senator Jeff Sessions. So what does this mean for legal marijuana?
Let’s first start with a quick overview of the current federal approach to marijuana in legal states. In 2013, Deputy Attorney General James Cole issued a memorandum to all United States Attorneys related to marijuana enforcement. Cole recognized that the Department of Justice had “limited investigative and prosecutorial resources,” and accordingly the Department was focusing its efforts on enforcement priorities that were “particularly important” to the federal government:
In other words, if a state’s regulatory system does not implicate these enforcement priorities, and if marijuana enterprises are compliant with state law, then the Department of Justice would exercise its discretion and allow those enterprises to operate. Importantly, this policy is not set in stone, and is subject to review by subsequent administrations. Which brings us now to Donald Trump and his nominee for Attorney General, Jeff Sessions.
In interviews throughout the election season, Donald Trump was actually fairly consistent in his open-minded approach to legal marijuana. He told the Washington Post that “In terms of marijuana and legalization, I think that should be a state issue, state-by-state[.]” He also told Bill O’Reilly that he was in favor of medical marijuana “a hundred percent,” even though he thought that diversion into other markets was a problem (so did James Cole).
Jeff Sessions, however, has not been as open when it comes to legal marijuana. A former Attorney General for the State of Alabama, he famously joked that he thought the Klu Klux Klan was fine “until [he] found out they smoked pot.” He was nominated for a federal judgeship in 1986, but his nomination was rejected by the Senate Judiciary Committee (which was controlled by Republicans at the time, and is now the same Committee that Sessions chairs in the Senate).
In an exchange with Michele Leonhart during a Senate hearing in 2010, Sessions said the following:
“I’m a big fan of the DEA[.] * * * These legalization efforts sound good to people[.] They say, ‘We could just end the problem of drugs if we could just make it legal.’ But any country that’s tried that, Alaska and other places have tried it, have failed. It does not work[.] We need people who are willing to say that. Are you willing to say that?”
Sessions’ attitude appears to conflict with the attitude of the President-Elect who nominated him, and perhaps he will adopt the President-Elect’s federalist approach to legal marijuana. But given Sessions’ prior comments, the best case scenario for the legal marijuana industry may be to maintain the current status quo. For instance, with Sessions as the nation’s top law enforcement officer, it is probably unrealistic to expect that the DEA will revisit its decision not to reschedule marijuana.
Hopefully Americans will get insight into how a Sessions-led Department of Justice will treat legal marijuana during the confirmation process. Until that happens, it looks like the waiting game continues for legal marijuana entrepreneurs.
Earlier this month, the Ohio Department of Commerce issued proposed rules for Ohio cultivators. The proposal was met with significant opposition, not the least of which was the low number of licenses the Department proposed awarding. There is an opportunity for public comment, as outlined below:
The Department’s proposed rules for Ohio medical marijuana cultivators will significantly affect the supply of medical marijuana in Ohio, as well as the operation of the industry more generally. Below are some highlights (no pun intended) of what the Department has proposed:
These rules are not yet finalized, and this list does not include all of the rules proposed by the Department. There remains an opportunity for public input, and if you are considering applying for an Ohio medical marijuana cultivator license it makes a lot of sense to get involved in the public comment process. The State needs to hear from concerned entrepreneurs and cannabis professionals so that Ohio has a functioning medical marijuana market by the target operational date of September 2018.
Earlier this month, the Ohio State Medical Board provided “guidance” to doctors relating to medical marijuana, stating that they should not recommend medical marijuana to patients until the Board finalizes its rules to certify doctors to make those recommendations — a process that could take until September 2017.
According to that guidance:
“A physician is not permitted to issue a state of Ohio approved written recommendation to use medical marijuana until the physician has obtained a certificate to recommend from the State Medical Board of Ohio. Per House Bill 523, the rules outlining the standards and process needed to obtain such a certificate to recommend will be developed no later than September 8, 2017.”
State Senator David Burke felt the “guidance” was unnecessary, telling Cleveland.com, “Willing physicians are in the free and clear[.]” He also noted that Ohio doctors will have to treat marijuana as a controlled substance under state law. “The affirmative defense was meant to allow for a quick transition for folks who need this product sooner than later[,]” he said.
The Gongwer News Service reported, however, that at yesterday’s meeting of the State Medical Board, member Robert Giacalone said that “the Medical Board is in no way prohibiting the recommendation of medical marijuana now that HB 523 is effective.” He further said:
“If Ohio physicians wish to recommend medical marijuana before the rules are in place, we strongly recommend that they contact a private attorney because the legislation is not crystal clear and could be interpreted as providing conflicting instructions to physicians.”
Giacalone’s statement appears to be a 180 degree turn from the “guidance” offered by the Board earlier this month, which did explicitly say that Ohio physicians were not permitted to recommend medical marijuana prior to being certified to do so by the State Medical Board. That being said, Giacalone is absolutely correct that HB 523 is not crystal clear when it comes to physician discipline for recommending medical marijuana.
Under R.C. 4731.30(B)(1), for instance, an Ohio physician seeking to recommend treatment with medical marijuana “shall” apply to the State Medical Board for a certificate to recommend — however, this section does not explicitly state that physicians must apply for certification before they recommend medical marijuana. Furthermore, subsection (C)(1) is clear that a “physician who holds a certificate to recommend” may recommend medical marijuana to patients, but this section does not state that only physicians holding this certificate can recommend medical marijuana. And, under R.C. 4731.22(B)(49), a physician may be disciplined for “failing to comply with the requirements of section 4731.30 of the Revised Code or rules adopted under section 4731.301 of the Revised Code when recommending treatment with medical marijuana.”
In other words, if R.C. 4731.30(B)(1) and (C)(1) require physicians to be certified before recommending medical marijuana, then R.C. 4731.22(B)(49) could allow for that physician to be disciplined if he or she recommends marijuana prior to being certified.
Under R.C. 4731.30(H), though, a physician is immune from civil liability and may not be disciplined by the State Medical Board or Board of Pharmacy (or be prosecuted criminally) for doing any of the following:
On its face, this subsection does grants immunity to all physicians recommending medical marijuana, regardless of whether that physician has been previously certified — and, in fact, it may render the certification requirement practically meaningless. Thus, there appears to be a direct conflict between R.C. 4731.30(H) and R.C. 4731.30(B)(1) and (C)(1).
Another interesting question is whether R.C. 4731.22(B)(49) applies to physicians who simply advise patients about the risks/benefits of medical marijuana or monitor the patient’s treatment, as the law does not explicitly call for discipline against physicians for engaging in those activities, with or without a certificate from the State Medical Board.
And as if the above analysis wasn’t confusing enough, it gets even more convoluted when one considers the Ninth Circuit case of Conant, et al. V. Walters, et al., 309 F.3d 629 (9th Cir. 2002). In that case, a group of physicians and patients argued that interfering with physicians from recommending medical marijuana violated the First Amendment — and they won an injunction against the federal government. To my knowledge, Conant has not been adopted by the 6th Circuit or any Ohio state court — but the First Amendment implications of Ohio’s new medical marijuana law cannot be ignored.
At the end of the day, there will likely be Ohio physicians issuing written recommendations to patients before the State Medical Board certifies them to do so. If they find themselves subject to disciplinary proceedings, they will at least have plausible arguments that R.C. 4731.30(H) and the First Amendment prevent discipline from being imposed.
Bringing the uproar surrounding attorney representation of Ohio medical marijuana clients largely to an end, on September 20th the Ohio Supreme Court formally adopted an amendment to Prof.Cond.R. 1.2(d). The new Rule 1.d(d) reads:
(d)(1) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is illegal or fraudulent. A lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client in making a good faith effort to determine the validity, scope, meaning, or application of the law.
(2) A lawyer may counsel or assist a client regarding conduct expressly permitted under Sub. H.B. 523 of the 131st General Assembly authorizing the use of marijuana for medical purposes and any state statutes, rules, orders, or other provisions implementing the act. In these circumstances, the lawyer shall advise the client regarding related federal law.
As amended, this rule change would resolve the concerns of many lawyers (including our firm) regarding the representation of clients in the medical marijuana industry. As previously noted here, however, new subsection (d)(2) differs from language used in other states in that it only authorizes attorney assistance with conduct “expressly permitted” under H.B. 523, while also advising about the consequences of federal prohibition. Other states, such as Alaska, clarify that an attorney may assist clients in conduct the lawyer “reasonably believes” is permitted under state law. This important distinction means that Alaska recognize that an attorney’s role is often to make a good faith determination regarding what is (or is not) authorized under existing law.
In Ohio, it is conceivable that a client may ask something like, “The law isn’t clear on whether my proposed conduct is allowable. Research whether it is permitted, and if so, advise me regarding how I can engage in it.” If the lawyer concludes that the conduct is permitted, but is wrong, the lawyer could (in theory) be subject to discipline because the Rule only authorizes conduct “expressly permitted” — there does not appear to be an allowance for reasonable mistakes as to the scope of the law.
In addition, this change does not address whether the Rules authorize an attorney to use medical marijuana or whether an attorney may own and/or operate a medical marijuana establishment. Those issues continue to be addressed only by the August advisory opinion.
All things in consideration, Ohio lawyers and the Ohio medical marijuana community in general are in a better position than they were a few weeks ago. The Ohio Supreme Court moved astonishingly fast to address this issue, and for that they should be commended. Let’s hope the Department of Commerce and State Board of Pharmacy act as quickly as they draft the industry rules over the coming months.
We’ve covered the ethical issues associated with legal marijuana on this blog previously, including the August 2016 advisory opinion issued by the Board of Professional Conduct. Today, the Ohio Supreme Court proposed a rule change to Rule 1.2 that would allow attorneys to represent medical marijuana clients regarding conduct “expressly permitted” under H.B. 523.
The August advisory opinion held that Rule 1.2(d) barred attorneys from offering traditional legal services to medical marijuana clients. The opinion also left open the possibility that an Ohio lawyer’s use of medical marijuana and ownership interest in a medical marijuana business could lead to discipline under Rules 8.4(b) or 8.4(h).
The proposal offered today by the Ohio Supreme Court only addresses the first issue: lawyer representation of marijuana businesses under Rule 1.2. As proposed, Rule 1.2 is separated into two subsections, with a new subsection (2) reading:
(2) A lawyer may counsel or assist a client regarding conduct expressly permitted under Sub.H.B. 523 of the 131st General Assembly authorizing the use of marijuana for medical purposes and any state statutes, rules, orders, or other provisions implementing the act. In these circumstances, the lawyer shall also advise the client regarding related federal law.
This language is notably more limited than language used in other states. In Alaska, for instance, the state adopted a new Rule 1.2 (f) that allowed lawyers to advise regarding conduct the lawyer “reasonably believes” is authorized by Alaska’s marijuana laws. The rule proposed by the Ohio Supreme Court, however, specifies that a lawyer’s advice must relate to conduct “expressly permitted” under H.B. 523.
In addition, the Supreme Court has not amended Rule 8.4 in any way — which continues to leave open the possibility that a lawyer’s use of medical marijuana could lead to discipline. This is still a big problem.
The Court will accept comments on this proposal through September 18, 2016. Comments may be forwarded either by mail or email to:
John VanNorman, Senior Policy and Research Counsel
Ohio Supreme Court
65 S. Front St., Seventh Floor
Columbus, OH 43215
At the end of the day, there is no question that proposed Rule 1.2(d)(2) represents real progress when it comes to attorney involvement in the Ohio medical marijuana industry. While the language may need tweaked, even as written it allows an attorney to represent a medical marijuana business with the traditional legal services the Board deemed prohibited in the August advisory opinion. Plus, kudos to the Court for acting so quickly.
The recent advisory opinion issued by the Ohio Supreme Court Board of Professional Conduct has led to a myriad of concerns among lawyers and others in Ohio’s medical marijuana community. Thankfully, the Chief Justice of the Ohio Supreme Court is aware and the Court is moving to address these concerns:
“Although non-binding, the Court is aware that the advisory opinion has led some lawyers to question whether they can assist clients in complying with the new law,” Chief Justice Maureen O’Connor said. “The Court hopes to act expeditiously in addressing their concerns and, if necessary, amend ethics rules to clarify the role of attorneys in light of the new law.” She noted that attorneys in other states have faced similar ethics challenges.
The Court will consider the proposed amendments to the Rules of Professional Conduct later this month and, if approved, publish the rules for public comment. “Again, the Court intends to act as swiftly as possible,” Chief Justice O’Connor said. “However, we do not want to rush the process to the point of creating additional problems,” the Chief Justice concluded.
On August 17, our law firm submitted proposed changes to the Board of Professional Conduct as outlined below. These proposals, if accepted, would open legal services to the medical marijuana industry and further specify that lawyers may use medical marijuana as long as that use does not adversely affect the lawyer’s practice and client representation, and also that lawyers may own or operate a medical marijuana business.
We proposed that the Ohio Supreme Court should adopt a new Rule 1.2(f) that uses language similar to that used in Alaska:
(f) Notwithstanding division (d) of this rule, a lawyer may counsel and advise a client regarding Ohio’s marijuana laws, and may assist the client to engage in conduct that the lawyer reasonably believes is authorized by those laws. If Ohio law conflicts with federal law, the lawyer shall also advise the client regarding related federal law and policy.
This amendment would clarify that Ohio lawyers can advise and assist clients under Ohio’s medical marijuana laws, as long as the lawyer also advises regarding federal law and any consequences of conflicts between state and federal policy. We also proposed adopting a new comment to Rule 1.2, explicitly identifying that lawyers can ethically provide services that are prohibited by Advisory Opinion 2016-6.
As it relates to an attorney’s use of medical marijuana and ownership in a medical marijuana business, we proposed adding a new comment to Rule 8.4 that provides:
 Divisions (b) and (h) of this Rule do not prohibit a lawyer from engaging in conduct that the lawyer reasonably believes is authorized by Ohio’s marijuana laws, including R.C. 3796, et seq. and all administrative regulations promulgated pursuant to Ohio’s medical marijuana control program.
Therefore, an Ohio lawyer may use medical marijuana in a method the lawyer reasonably believes is authorized under Ohio law as long as such use does not adversely affect the lawyer’s work or representation of clients.
In addition, nothing in divisions (b) and (h) of this Rule prohibits a lawyer from having an ownership interest in, being employed by, or lending money to a medical marijuana enterprise that the lawyer reasonably believes is authorized under Ohio law.
This comment is necessary to protect lawyers using medical marijuana from discipline, as long as the lawyer’s use does not adversely affect the lawyer’s clients — similar to situations where an attorney chooses to use alcohol or when an attorney is prescribed medication to treat a medical condition.
We should know within the next few weeks how the Court intends to move forward and whether the Rules of Professional Conduct will be amended. One thing seems clear, however: the Court recognizes the untenable situation facing Ohio lawyers and the medical marijuana community and the Court intends to fix the problem.