'Pot law' is a budding industry for Michigan attorneys
With the passage of Proposal 1 in last Tuesday's midterm election, Michigan attorneys are gearing up for an influx of people interested in the business side of the budding marijuana industry.
The doors seem to have swung wide open for marijuana businesses in Michigan. The excitement is there. But is the legal advice?
Cities across Michigan soon will have to develop local regulations and tax codes for marijuana businesses. All of this forthcoming motion into a new, highly sought-after industry also means attorneys will be weeding through hundreds of calls from new, potential clients who are looking to navigate the legal landscape of it all.
Michigan is the 10th state to allow marijuana for recreational use, and there are 33 others that allow it for medical use, though federal law still forbids its sale, transportation and cultivation. This sort of federal/state disconnect proves difficult for attorneys looking to provide clients with legal advice.
Many are fielding questions that range from where to set up a marijuana shop to how to get a recreational license without a medical one (hint: you can't).
Plenty of attorneys already have been cashing in on giving advice on the best way to navigate Michigan’s marijuana rules and regulations.
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Attorneys are swamped
“This is the biggest development we've ever seen,” said Barton Morris of Cannabis Legal Group in Royal Oak. “Nothing is really going to happen until 2020, but people will still want legal advice.”
Morris’ firm has been getting an influx of calls since the election, but the firm itself has been marketing its services and strategic counseling via Facebook Live for months.
“We’ve done over 70 Facebook Lives because it is difficult to get all the information to people who want to get in,” he said. The firm also hosts marijuana law seminars.
The most important thing prospective marijuana entrepreneurs want to know, according to Morris, is which cities will allow a recreational license. Under the proposal, each city has the right to allow or deny recreational licensing.
That makes real estate crucial. Potential business owners have to know what city regulations say about operating near schools — and, on the more lucrative side, what cities will offer economic incentives, like tax exemptions.
Growing numbers of specialists
Shyler Engel, an attorney in Shelby Township, remembers back in 2011 when there were fewer than a dozen lawyers practicing cannabis law in the state. Now, the Marijuana Section of the Michigan State Bar has more than 700 registered attorneys.
"It is the is fastest growing section of the state bar," said Engel.
The section is aimed to "expand the knowledge of lawyers" by offering contacts, case law and resources to those "who engage in the practice of marijuana law."
Attorneys have largely been at the forefront of efforts to decriminalize marijuana. And the National Organization for the Reform of Marijuana Laws (NORML) was founded in 1970 with that in mind.
It may have been difficult to find a lawyer to help answer marijuana-related questions in the '70s, but not now. NORML offers a long list of specialists in all 50 states.
Some larger law firms are taking an interest in the industry for the cash value, according to Morris, who is on the board of the Marijuana Law Section.
Firms such as Detroit-based Clark Hill have hundreds of lawyers, many of whom are devoted to marijuana business law. Clark Hill has 11 attorneys dedicated to cannabis practice, and will add more in the coming year.
And law firms across the state will be dedicating more resources to what once was considered a subsection of the practice.
'There is no precedent'
Attorneys like Morris often lobby municipal officials to help draft legislation, too. The proposal was designed to mirror that of the medical marijuana program. But recreational business brings its own complexities when filing business license applications and negotiating agreements.
Because there is only about a decade of case law to cite, attorneys have to keep up to date on prior and forthcoming litigation in order to make legal judgments. Sometimes that means interpreting things that haven't been yet decided in the courts.
“There is no precedent to what we are doing,” said Morris. “But our clients need answers, they need to make large money decisions.”
And because there is such little legal precedent for navigating, some institutions have been hesitant to jump in.
Most law schools in Michigan don’t offer courses on so-called “pot law.”
Northern Michigan University in Marquette was the first university in the nation to offer a four-year degree in marijuana chemistry and business that looks at all aspects of the marijuana industry.
Western Michigan University's Cooley Law School has offered a medical marijuana class for several years now, but it deals with the “ethical issues inherent in the subject of drugs and the law” not how to navigate the business side of the industry. University of Denver's law school offers a "cannabis regulation" course, and in 2013, Harvard had a guest lecturer specifically for tax planning aimed at marijuana dealers.
What's next
Despite an array of legal challenges ahead, Engel is not worried, emphasizing that Prop 1 is a victory and creates a new, exciting market for the state.
He said the legislation will also keep every kind of lawyer busy: from property and corporate lawyers, to criminal lawyers.
“All attorneys will have more work because of the legalization of cannabis,” said Engel. “Michigan attorneys are well equipped to handle it, and I look forward to all the new issues that come from this.”