When people ask me what I do for a living, I usually give the simple response: “I’m a lawyer.” Which usually ends the conversation. But sometimes people will ask, “what kind of law?” My response: “marijuana.” This is when people suddenly perk up, “so what do you actually do?” No, it doesn’t mean that I smoke a joint while drafting documents. And while that sounds like fun, THC and asset purchase agreements don’t play well together.

The answer varies for each marijuana lawyer as there are several different types. But all marijuana lawyers share one thing in common–we represent marijuana businesses for a living. And that means their problems become our problems. From banking, to dealing with 280E (which is the section of the federal tax code that prevents marijuana businesses from deducting certain expenses from their income–resulting in far higher tax bills than non-marijuana businesses), to residency requirements for ownership, to the inability to access federal bankruptcy courts, there are major difficulties that marijuana businesses face. And while the underlying legal work that a marijuana lawyer does might be very similar to that done by a non-marijuana lawyer, these unique challenges often define our jobs.

Marijuana lawyers these days tend to come in two varieties: old school types who often have strong criminal law or activist backgrounds and newer arrivals who frequently come from more corporate backgrounds. I’m very much of the latter variety, having spent the six years prior to joining the marijuana industry working at large firms in New York, but I work for a law firm founded and run by lawyers with impeccable activist credentials (if you have ever benefitted from legalized marijuana you owe them a debt of gratitude–they helped write and pass Amendment 64 in Colorado, which created the first legal and regulated recreational marijuana market in the world).

I specialize in corporate and securities law, which is to say that I help marijuana businesses and investors raise capital, buy and sell assets and businesses, navigate the patchwork of ownership requirements across the US, and generally assist with any business law issue that arises. A lot of what I do is almost identical to the work of a startup lawyer in Silicon Valley–drafting contracts and negotiating deals is very similar across industries. But there are key differences. In my previous life, it was extraordinary rare for a client to lose a bank account, or have trouble opening one, and now this is a daily occurrence. And that’s just one of many unique challenges that marijuana businesses and their lawyers face.

But no matter how transactional your focus, being a marijuana lawyer necessarily implies some level of political engagement. Our clients’ businesses are subject to heavy regulation (in addition to currently being federally illegal) and that means marijuana lawyers must both stay on top of the ever-changing regulations governing our clients and continue being activists for our industry. Following cannabis news is effectively a second job for a dedicated marijuana lawyer and my colleagues and I all have a long list of podcasts, daily and weekly newsletters, and websites that we attempt to follow regularly.

Like any other lawyer focused on an industry, we need also to learn the underlying business. In this way marijuana lawyers are far more like oil and gas lawyers than, say, employee benefits or tax lawyers (examples of legal specialties where lawyers are generally agnostic as to the underlying industry–a stock incentive plan can pretty much be the same for a software, machine tools, or widgets company). Unfortunately, this means more than burning one down after work. It means being able to talk intelligently to a grower, extractor, or dispensary manager about their job and it also means keeping up to date on the latest industry trends and news. Good marijuana lawyers understand not only the laws that impact the industry, but also how marijuana is grown, how it is sold, who buys it, and what keep marijuana business owners up at night.

This is the first of a series of articles I’ll be writing for Cannabis in America alongside my colleague Kelly Rosenberg. Together we will explore the frontlines of marijuana law and policy, business, and the day to day challenges and rewards of representing cannabis businesses.

Charlie Alovisetti

Charles Alovisetti is a senior associate and co-chair of the corporate department at Vicente Sederberg LLC. Prior to joining Vicente Sederberg, Charlie worked as an associate in the New York offices of Latham & Watkins and Goodwin where he focused on representing private equity sponsors and their portfolio companies, as well as public companies, in a range of corporate transactions, including mergers, stock and asset acquisitions and divestitures, growth equity investments, venture capital investments, and debt financings. He is a graduate of McGill University and Columbia Law School. Charlie is admitted to practice in Colorado and New York.

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Since Colorado became one of the first states to formally legalize recreational marijuana, there have been many attempts to stop legalization in its tracks. But the most interesting, and arguably the most promising attempt, was Nebraska and Oklahoma’s lawsuit against Colorado, which allege that since Colorado legalized weed, both states face an increased burden on their law enforcement due to marijuana coming in from Colorado. The Supreme Court dashed both states’ hopes on Monday when it declined to hear the case, but still this might not be the end of the story.

The lawsuit claims that Colorado’s marijuana legalization is unlawful for a number of reasons, from violating the Supremacy Clause of the Constitution, to going against international treaties adopted by the United States. Congress passed the Controlled Substances Act during Nixon’s presidency, which categorized Marijuana as a Schedule I drug making it illegal and placing some of the strictest restrictions on its use and sale. The Supremacy Clause of Article IV of the Constitution states that federal law is the “supreme law of the land” and supersedes state laws, which effectively makes Colorado’s legalization unconstitutional.

The lawsuit claims:

In passing and enforcing Amendment 64, the State of Colorado has created a dangerous gap in the federal drug control system enacted by the United States Congress. Marijuana flows from this gap into neighboring states, undermining Plaintiff States’ own marijuana bans, draining their treasuries, and placing stress on their criminal justice systems.

However, in light of many states’ efforts to legalize marijuana, the Department of Justice (DOJ) issued guidance that largely allows states to move forward without federal interference. Deputy Attorney General James Cole issued a memo highlighting eight enforcement priorities, including things like preventing marijuana distribution to minors and stopping marijuana-related violence. But the memo notes that “Outside of these enforcement priorities, the federal government has traditionally relied on states and local law enforcement agencies to address marijuana activity through enforcement of their own narcotics laws.” He further says that if state laws sufficiently regulate marijuana to deal with the DOJ’s enforcement priorities, then the federal government will largely leave states alone. This essentially meant that states would be free to legalize as long as they created a strong enough regulatory system to protect the priorities outlined by the DOJ.

So that explains why the federal government didn’t stop the legalization, but what happens when others challenge the law? That’s how we got here, with Nebraska and Oklahoma suing Colorado after voters passed Amendment 64 back in 2012. The lawsuit was sent directly to the Supreme Court, which has “original jurisdiction” over disputes between states, meaning that such cases begin at the Supreme Court and do not need to go through the traditional appellate process first.

After the Supreme Court declined to hear the lawsuit, Justices Thomas and Alito–both of whom are pretty conservative–dissented primarily because of the nature of the court’s original jurisdiction. In his dissent, Justice Thomas writes, “Federal law is unambiguous: If there is a controversy between two States, this Court—and only this Court—has jurisdiction over it.” He argues that, regardless of his or the other justices’ desired outcomes, the court has a duty to hear the case because it is the only body that can resolve these disputes.

But others have noted that the Nebraska and Oklahoma’s attorneys general still may be able to take the case to a lower court. Robert Mikos, a professor at Vanderbilt University Law School, told the Cannabist that the two states could pursue their case in a district court. Prior to the Supreme Court’s decision, Solicitor General Donald Verrilli filed a brief calling for them to not take up the case. He claimed that doing so would be a “unwarranted expansion of the Court’s original jurisdiction” because it would need to argue that one state’s laws caused the illegal actions of people in bordering states. He also argues that hearing the case would be unwarranted because the dispute could be handled by a circuit court.

Many were not surprised when the court ultimately declined to hear the case. Cases between states are typically pretty rare and the court has often refused to hear them in the past. As the Federal Judicial Center notes, “Since 1960, the Court has received fewer than 140 motions for leave to file original cases, nearly half of which were denied a hearing.” Now it’s up to the Nebraska and Oklahoma to decide whether they want to pursue the case in a different court.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

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With the legalization of marijuana in Colorado and Washington, people who choose to smoke marijuana for recreational purposes will not face criminal charges. But they could be at risk of losing their jobs. This ongoing debate between employees and employers continues to be fueled by state legislation and employment drug testing policy. The courts must now analyze and settle questions regarding the controversy. Although in certain states, employees are not breaking the law by using marijuana, employers continue to implement pre-screening and routine drug tests. Workers are beginning to take action against what they believe to be violations of their rights. This leads to an inherent disconnect between the law and companies’ policies – so here is everything you need to know about marijuana, employment, and drug testing policies.

History of Drug Testing

In order to explain the divide between state law and employee drug testing, let us examine the history of testing policies and procedures. Surprisingly, not all workplaces require drug testing; the power to choose whether or not to implement the procedure is given directly to the corporation. According to Drug Testing USA, there are three factors that are taken into consideration regarding employee drug testing laws:

“1) who can be tested and under what circumstances (pre‐employment, random, etc.), 2) how testing is to be conducted (in a law, via on‐site devices, etc.), and 3) the procedures to be observed by the testing entity.”

As a result, companies have the power to alter and update their employee requirements to align with state legislation. Yet, in recent cases, companies chose to adhere to their original methods. Later, we will examine how the courts respond when employees challenge employers’ practice.

Who is tested?

If employers do not require mandatory drug screenings, do they have the right to single out individuals and conduct a test based on “reasonable suspicions?” If they do, employers must be sure to adhere to a strict guideline of how they define suspicious behavior in order to avoid a lawsuit. According to the Northwest Justice Project, “it is legal for a private employer to require a drug test of its employees, unless the employer uses the test to discriminate against certain people.”

Who conducts the tests?

There is a discrepancy between the law and employee protocol. Although Colorado and Washington have legalized marijuana, this does not mean that businesses have to follow suit. In a company’s defense, retaining a safe and efficient system is vital to the company reputation and prosperity. But an individual could argue that employee drug testing is a violation of their privacy. Since drug testing lacks federal legislation, and designates most of the power directly to the businesses themselves, it is a corporation’s decision whether to drug test or not.

Ethics: Is an employer testing for marijuana a violation of privacy?

Technically, drug testing is classified as a form of search and seizure. When employers choose to test employees, they are compromising the individual’s Fourth Amendment rights which read, “the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” A common argument is that what an individual does on their own time should not be used against them professionally. The concept of employee drug testing is similar to employers researching their employees’ social media accounts. If a person chooses to party and live promiscuously on their own time, should employers have the right to judge the employee even if they are a capable and efficient worker? The employer could argue that this is a practical and fair assessment in evaluating employees. However, the employee could dispute that they have the right to privacy within their personal lives, and should not have to change their habits or filter their social media on account of being judged by an employer.

Case Study: National Treasury Employees Union v. Von Raab (1989)

In a 1986 case, National Treasury Employees Union v. Von Raab, the National Treasury Employees Union argued that drug testing was violating their privacy rights and the Fourth Amendment. Originally the State Court of Eastern Louisiana ruled in their favor, yet the case ultimately went to the United States Court of Appeals. There, the court ruled that the government’s policy on drugs surpassed the desires of the union. Although testing potentially violated employees’ rights, “balancing the individual’s privacy expectations against the government’s special needs” became the basis for enacting the tests. The ruling outlined several factors which the employer must abide by to protect the employee’s rights and ultimately upheld the standard that, “no privacy invasions should be permitted unless some good end is served.” This case made drug testing legally applicable to businesses if they choose to enact such as policy as long as they abide by the ruling’s contingencies.

Case Study: Johnson v. City of Plainfield (1990)

 “Even if drug testing is found to be constitutional, we must measure what we have gained in finding the guilty against what we have wrought upon the innocent.”

-Johnson v. City of Plainfield

In Johnson v. City of Plainfield, the courts questioned the constitutionality of employee drug testing, and decided that it must be decided on a case-by-case basis. In 1986 in New Jersey, the City of Plainfield Fire Department employees were subjected to an abrupt urine test. Sixteen of the firefighters tested positive for unspecified drugs and were fired without pay. Several of the firefighters felt that accusations were false, and that certain medication could have tainted the urinalysis since no information was provided about those present substances. Additionally, they felt that their privacy had been violated because a member of the same sex had monitored them during the urine test. Finally, they argued that their morales were tainted by the positive drug tests. In the ruling, “[the] court suggest[ed] that the factual findings in this matter should cause us to pause in the nationwide rush toward massive and mandatory drug testing.” This case illustrated a shift from a more conservative stance on employee drug testing to a more reformed view.

Case Study: Colorado

Although marijuana is now legal in Colorado, not all businesses condone recreational usage. Section 6 of Amendment 64, which legalized recreational marijuana, states that:

“Nothing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.”

Legally, employees can be tested for marijuana. According to The Denver Post, “despite marijuana’s legal status in Colorado, courts have ruled that employers have the right to fire workers for using pot, even off-duty.” There is no protection against losing your job because of marijuana use, so employees must make wise decisions when partaking in recreational use or they could be at risk for losing their jobs.

Does that violate employees’ rights and the law? According to Amendment 64, Colorado marijuana legalization, “specifically gives employers the right to have a Zero Tolerance Policy.” Therefore companies who choose to enact the policy are abiding by not only federal, but also state law.

Fox Business discusses how Colorado and Washington employers are wrestling with new marijuana laws:

Medical Marijuana

While Colorado and Washington have fully legalized marijuana, a more applicable nationwide debate is medical marijuana. Only a handful of states have provided legal protection to individuals with a prescription for medical marijuana. How do employers handle individuals who smoke to ease the symptoms of painful and sometimes crippling illnesses?

History of Legislation

The 1990 American with Disabilities Act protects individuals with disabilities. It assures that disabled citizens will receive protection from discrimination in the workplace and have the freedom to use certain aides to function in the workplace; yet it does not cover medical marijuana.

The Compassionate Use Act of 1996 gives individuals some protection against criminal charges, such as possession, when they use cannabis for medical purposes. However, it does not include any safeguard for employees from being terminated for violating a company’s drug policy.

Finally, in the 2008 case, Ross v. RagingWire Telecommunications, individuals who used cannabis for medical purposes were denied protection from being terminated from their job.

However, there are some loopholes that certain states provide; in California, a smoker who uses medical marijuana can negotiate with the following letters:

1. Pre-employment Negotiation Letter (.doc).
2. Negotiation Letter for Currently Employed Patients (.doc)
3. Termination Negotiation Letter (.doc)

These letters do not guarantee an employee defense against termination, yet they give an employee a chance to petition to preserve their job.

To see a debate about the legality of medical marijuana in the workplace, click here:

Case Study: Brandon Coats v. Dish Network

In a 2010 Colorado case, a quadriplegic man, Brandon Coats, was fired from the Dish Network for testing positive for marijuana. Coats smoked medical marijuana to alleviate severe pain he experienced on a regular basis. When Coats brought the case to the Colorado Court of Appeals  in 2013,  the court confirmed that Dish had the right to fire Coats for violating company drug policy. When Coats appealed, the appellate court ultimately ruled that: “federal law trumps state law.” Montana, Oregon, and Washington also heard similar cases. All cases resulted in the same ruling– federal law overrides state law, and employers can choose to terminate employees if they do not abide by the company’s drug policy.

Employers retain the right to test and terminate employees for testing positive for THC regardless of the circumstances.

Future Amendments

Will the legislation amend the requirements for employers to accept the use of medical marijuana? Individuals that suffer from chronic illnesses are put in potential financial jeopardy. Yet employers are liable for mistakes made on the job due to marijuana use. As of now, employers have no intention of changing the policy, and legislatures are leaving the power to the businesses. Is this ethical? It has been scientifically proven that marijuana can help with extreme illnesses in a way which no other medication can. Employers are putting individuals who are already in a precarious situation in jeopardy. On the other hand, businesses have a reputation to maintain and would like to remain efficient in a competitive field.

Legal Inconsistency Throughout the States

Currently, every case regarding employees’ rights to marijuana use has been overruled by federal law, which still sees marijuana as illegal. This legal generalization may not suffice with the innovations to state laws that continue to develop. Legislation needs to take into consideration all of the ripple effects that marijuana will have on businesses. When drug testing was deemed constitutionally appropriate, marijuana was distinctly illegal. Now with all of the unique exceptions and amendments to state laws, there are constant inconsistencies. National businesses are now also put in an difficult situation when dealing with the marijuana laws unique to their state– how does a nationwide company handle state-to-state laws regarding their policy on employee drug testing?  Legislation needs to step up and tie up all the loose ends to protect employees as well as protect corporations from being sued by individuals who feel that their rights are being challenged.

Resources

Primary

US District Court, New Jersey: Johnson v. City of Plainfield

US Court of Appeals, 5th Circuit: National Treasury Employees Union v. Von Raab

Department of Labor: Drug-Free Workplace Policy Builder

California EDD: Misconduct MC 270

Additional

Regulate Marijuana: Amendment 64: The Regulate Marijuana Like Alcohol Act of 2012

MAPI: Changing State Marijuana Laws and Employer Drug Testing Policies

The New York Times: Creating Confusion in the Workplace

Americans for Safe Access: Employment 

Huffington Post: Employers Can Fire You For Using Marijuana, But Brandon Coats’ Case Could Change Everything

Madeleine Stern

Madeleine Stern attended George Mason University majoring in Journalism and minoring in Theater. Her writing on solitary confinement inspired her to pursue a graduate degree in clinical counseling after graduation. Madeleine is an avid runner, dedicated animal lover, and a children’s ballet instructor. Contact Madeleine at staff@LawStreetMedia.com.

The post After Marijuana is Legalized, What Limits Can Employers Impose? appeared first on Law Street.

There’s been a lot of talk about marijuana lately. This year we’ve seen the implementation of Amendment 64 in Colorado and Initiative 502 in Washington, both passed in 2012. Aside from the 18 states and the District of Columbia that have approved marijuana for medical use, two states have approved measures to legalize recreational use for adults 21 and over. With the sophisticated enforcement of these initiatives we must ask ourselves, has marijuana gone mainstream?

One might think, but this is a paradox when it comes to the criminal justice system. The latest FBI Uniform Crime Report shows that the highest amount of arrests were for drug abuse violations, with more than 42 percent of violators being arrested for marijuana possession. So marijuana is cleared for medical use but possessing it is a crime that led to more arrests than any other in 2012. Not only that, but these arrests consume massive amounts of money due to the cost of prosecuting, incarcerating, and having offenders under the watchful eye of the courts as a result probation or parole. These non-violent criminals are a drain of financial resources and increase criminal justice caseloads. As a result, many states are considering decriminalizing marijuana as is the case in places like Maryland and the District of Columbia.

The prohibition of marijuana seems to be losing popularity as the combination of decreased funds in state budgets continue, and more medical uses for the drug are found. On top of efforts to decriminalize and legalize marijuana, there seems to be a new level of acceptance when you consider the number of apps that have been created that allow potential marijuana dispensary customer to locate dispensaries from their phones. Even more than being able to get directions to the local dispensary, there are game-like apps such as Weed Firm that allow users to create their own cyber pot shops.

Weed Firm, a creation of Manitoba Games, was offered by the Apple App Store and allowed users to create their own marijuana plant mixtures that could then be sold to virtual customers. The game was complete with seed, potting, and fertilizer options for growers to make their favorite combinations. One of the more unsavory game features was the option to either pay the local thugs for the ability to sell marijuana on their turf, or have them take all of your plants and profit as payment. Manitoba Games was pleased to announce that Weed Firm was number one on every Apple App Store category. Unfortunately for Manitoba Games, Apple recently decided to remove the app from the store. As you can expect, the gaming company was not pleased with this decision and released a hilarious statement discussing the matter. In their statement, Manitoba Games has vowed to return to Apple’s App Store with a more acceptable, censored version of Weed Firm.

If technology is any indication of the changing opinion on marijuana, then its safe to say marijuana is no longer considered taboo. This change is a result of realizing the prohibition of marijuana has been unsuccessful. Financially, states cannot support the incarceration of large amounts of people for non-violent crimes like marijuana possession. It’s even harder to explain that people are being classified as criminals as a result of being in possession of a plant that is used for medical purposes. It seems that the evolution of marijuana and its negative associations are as old as Reefer Madness. This post does not advocate for the legalization of marijuana, but rather to explain some of the changes in public opinion and the influence it has on technology.

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Teerah Goodrum (@AisleNotes), is a recent Graduate of Howard University with a concentration in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football.

Featured image courtesy of [O’Dea via Wikipedia]

Teerah Goodrum

Teerah Goodrum is a Graduate of Howard University with a Masters degree in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football. Contact Teerah at staff@LawStreetMedia.com.

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