Medical cannabis is quickly becoming a lucrative business in Minnesota, with potential manufacturers and consulting companies wanting to get in on the action. But one group -- lawyers -- is being locked out of the market so far by their own code of ethics, and they're trying to get it fixed as soon as possible.
The law firm Thompson Hall sent a petition to the Minnesota Supreme Court last week looking to change the state's rules for lawyers. Right now, the rules say that lawyers can't give advice to those applying to be one of the state's two cannabis manufacturers. The conflict boils down to a few lines in the Minnesota Rules of Professional Conduct, basically an ethics guide for lawyers in the state.
The rule in question can be found on page 12 of the code, and it details when it's legal or illegal to advise a client:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning, or application of the law.
Now, obviously, medical cannabis is legal in Minnesota, but the drug is still illegal on the federal level. That makes it illegal for lawyers in Minnesota to counsel anyone on manufacturing it, according to the code. If the lawyers' petition can convince the state Supreme Court to change the rules, though, they could jump into the cannabis game.
Maureen Carlson, an attorney with Thompson Hall, says lawyers, in particular, are valuable to new pot growers. Some prospective manufacturers are coming from non-business backgrounds like health care, meaning they may not understand practices like forming an LLC or abiding by certain legal rules. That's where lawyers can step in.
"So there's a lot of compliance and business setup and growth," Carlson says. "Mainly making sure they got their ducks in a row."
Even with the petition, there's no guarantee the Supreme Court will fix the problem right away. Carlson says these sorts of situations are rare, so she really doesn't know how long it'll take before the Supreme Court acts. And law firms will need to hear something soon, as the deadline for prospective manufacturers to apply to the state is in early October, only about two months away.
But potential pot manufacturers aren't being left completely out to dry. Consulting companies are already stepping in to help make the process easier. As we reported before, one of those businesses, the American Cannabis Company, is already counseling an unnamed group of "entrepreneurs" to try to get in on the ground floor.
The number of potential manufacturers is going to increase as we get further into August, as the state is set to hold its first meeting for prospective producers on August 8, when it'll lay out the rules for the application process. The department says it's already received more interest than expected, meaning that the applicant pool could be large. And with counsel like a lawyer on their side, some applicants could certainly separate themselves from the pack.