Marijuana & Business

Thomas Howard
teh@h2law.com
309-999-6302
1. Historical primer
In 1937 the federal government prohibited the possession of marijuana after an extensive smear
campaign by journalists that linked the substance to insanity and the degenerate races. Harry Ansliger was
the nations first drug czar and used the degenerate label for marijuana users when he tried and find a new job
for the nations former alcohol prohibition enforcement agents.
Also in 1937, the American Medical Association (AMA) discovered that marijuana was a slang term for
cannabis. The AMAs legal counsel, doctor and attorney William
Woodward testified regarding its known medical effects and opposed
the governments attempt to completely ban the substance that
scientists were studying.
Finally, in 1937 Kentucky Congressman Fred Vinson
(pictured), who attended Dr. Woodwards hearing on marijuana, lied
to the house of representatives and said that the AMA supported the
ban. He was named Chief Justice of the Supreme Court and did not
die until 1953. He died holding up the Brown v. Board of Education
decision that ended segregation.
Suffice to say, the law is predicated on racism and the
railroading of science.

2. Federal Guidance
In 1969 the Supreme Court held the first federal marijuana law unconstitutional. Leary v. United States, 395
U.S. 6 (1969). As a result, President Nixon declared drugs to be public enemy number oneprobably as a
cover for the real villains, hippies. Congress passed the Controlled Substances Act (CSA) in 1970. 21 U.S.C.
801 et. seq. The CSA placed all controlled substances into 5 schedules with the most dangerous being in
Schedule I. Marijuana was first placed and remains still in this schedule.
In a rush to pass the CSA, Part F was attached to it to win over democratic support that opposed
classifying marijuana along side heroin. Part F commissioned a study of marijuana to determine the proper
classification of the substance.

In 1972 the Shafer Commission published its results and recommended

decriminalizing marijuana. Despite this, marijuana remains a Schedule I substance. The law is analogous to an
umpire calling a strike before the baseball was thrown, but promising to really watch the ball once the pitcher
lets it fly.
Many years passed and the population of U.S. prisons increased many times over. In 1996 California
became the first of the wave of states that passed medical marijuana (MMJ) laws. By 2014, over 47% of
Americans live in a state where MMJ is legal. A majority of Americans would now live in an MMJ state, but
Florida required 60% of the vote to pass its law in November 2014, and it only received 58%. On the other
hand, as of February 26, 2015, the nations capital has legalized possession and manufacture (growing of)
marijuana for personal use. As a result of this groundswell in favor of MMJ, the federal government issued
non-binding guidance in the form of Department of Justice (DOJ) memos.
The Constitution provided for federal district as a capitol under the exclusive jurisdiction of Congress,
commonly referred to as Washington D.C. U.S. Const. Art. I. Sec. 8 Cl. 17.

Congress claims the drug is

dangerous; the DOJ wants to prohibit use on federal land. Mere possession of marijuana is a federal crime
pursuant to the CSA, and manufacture can be punished by life in prison. 21 U.S.C. 841. Despite all of these
prohibitions, it is lawful to grow and have marijuana in Washington, D.C.

The DOJ issued the most recent memo on its policy toward MMJ on August 29, 2013 (the Cole
Memo). The federal government will focus on certain aspects of law enforcement that it believes to be of
highest priority.

DOJ goals include:

Preventing marijuana sales to minors

Preventing revenue from funding organized crime
Preventing interstate sales of marijuana
Preventing state-authorized marijuana for being used as a front for illegal

marijuana
Preventing drugged driving
Preventing cultivation on federal lands
Preventing violence and use of firearms related to marijuana
Preventing use on federal property.

The Cole Memo further expressed the federal governments traditional reliance upon states addressing
marijuana activity by their own laws. The federal government continues its expectation in the states to regulate
marijuana laws effectively and safely.

States that have passed laws that include robust regulation and

enforcement measures are less likely to threaten the federal priorities.

Provided that state laws have strict regulation and enforcement measures, the federal government
believes state law should remain the primary means of addressing marijuana-related activity. Perhaps if the
states are not sufficiently strict in enforcing their own marijuana laws, the federal government may have to
challenge the states regulatory structures with appropriate action, including criminal prosecution.

3. State Law & Ethics

Typically, MMJ states amend Rule of Professional Conduct 1.2(d) (the Rule), or the state bar
association provides its opinion of the Rule. This is the rule that prohibits an attorney in helping a client engage
in criminal or fraudulent activity. The Rule is typically amended to permit attorneys to counsel clients in
engaging in conduct that is sanctioned by state law, provided that the attorney admonishes his client about the
federal law.

The Illinois State Bar Association (ISBA) issued its opinion on the Rule on October 7, 2014. It
recommended that the Supreme Court make official changes to the Rule. As of March 2015, no changes to the
Illinois Rules of Professional Conduct has occurred.
The Illinois Medical Cannabis Act (IMCA) became effective on January 1, 2014. The IMCA defines an
adequate supply of marijuana to be 2.5 ounces per 14-day period. 410 ILCS 130/10(b). As of March 2015,
no dispensaries have opened and the process of awarding dispensary and cultivation licenses has been fraught
with legal and ethical quandaries. At this pace, perhaps no MMJ will ever be sold in Illinois before the sunset
date of the IMCA on January 1, 2018. A crop of MMJ grown under the restraints of the IMCA takes
approximately 3-4 months, depending on the strain, before it is ready for sale. Perhaps the first patients will be
able to get their MMJ in Illinois by the end of 2015.
The IMCA is one of the most stringent of the MMJ acts in the United States. The IMCAs strict control
of the awarding of licenses for cultivation and dispensary facilities have caused delay and raised questions about
propriety of the awards. The IMCA only allows marijuana for debilitating medical conditions, which does not
include chronic pain. 410 ILCC 130/10(h). The IMCA even creates penalties for lying to law enforcement
about using MMJ. Many other states have used MMJ to help in dropping possession charges if the offender
could qualify for a medical marijuana card for chronic pain.
4. Employment
The IMCA creates a conflict when it comes to employment. While the IMCA prohibits discrimination
against patients by school, employer, landlords, or under medical care, it enables employers to maintain
zero-tolerance policies.

410 ILCS 130/40-50.

The Illinois legislature clearly want to prohibit

discrimination and to allow businesses to be free to restrict and prohibit MMJ, provided it was done nondiscriminately.
As a result, businesses have all the space to craft any MMJ policy they so chose as long as it is done
even across the board. If a work-place is drug free, it cannot fire one employee that fails a drug test, but
not another.

Unless, there were other reasons for the firing.

The IMCA prohibits employer

discrimination against MMJ patients solely for being a patient, any other legitimate reason will do.

Before an employer adopts a zero-tolerance policy or a drug free workplace, it would behoove that
person to answer one question: is everyone replaceable? If the answer is yes, a drug-free work place is
fine. However consider the following scenario.
Doug is a slacker that gets high on weed, not MMJ. He does not have any real authority and barely
coasts by his duties as a beta tester at the local software development lab (hey, its 2015). The owner of
the lab smells something skunky on Doug one day and orders a random drug test. Dug proudly fails
the test and accuses everyone of used to being cool. On his way from being escorted from the
building, dug posts to Instagram (again, 2015) a picture of him and Amit doing bong rips over lunch.
Amit is the best programmer in the state and it cost $150,000.00 to keep him for six months, which still
has five months to go. Fortunately, Amit has Chrons diseases and a MMJ card. The owner knows that
the new launch for the product that will make or break the company needs Amits work. Either way, the
company is screwed. Either it does not fire Amit and has discriminated against its zero-tolerance policy,
or it fires Amit and faces bankruptcy. There is a more reasonable MMJ workplace policy for companies
that have high skilled employees.
On the other hand, consider the following scenario: Doug is a slacker that works at a burger joint. He
fails a drug test. Everyone is replaceable, but perhaps fire them after the lunch rush. Companies that are
low-skilled can adopt more strict MMJ polices.
5. Banking
6. CBD loophole
7. Going Forward