Marijuana Law and Policy

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.

Green Marijuana PlantOn December 15, 2016, the Board of Pharmacy issued draft regulations placing a limit of 40 dispensary licenses, and providing for rules on obtaining dispensary licenses, operating dispensaries and licensing of employees. The State Medical Board regulations provided steps physicians have to undertake in order to be able to recommend medical marijuana. The Department of Commerce made some increases to cultivator limits.

Board of Pharmacy

The Board of Pharmacy will only issue “up to” 40 provisional dispensary licenses by September 8, 2018, with no licensee being issued more than 5 dispensary licenses at any time. There is a $5,000 non-refundable license application fee and an $80,000 fee to be paid every other year. In order to be eligible, a prospective dispensary owner must have at least $250,000 in liquid assets. Although there is no date yet, the Board of Pharmacy will provide notice of a request for applications to operate a dispensary.

The Board of Pharmacy also issued regulations regarding licensing of employees working for a dispensary, including thorough background checks and maintaining a valid employee identification card. Employees will have to report all purchases to the OARRS controlled substances database within five minutes of purchase.

There are also rules regarding dispensary operation, such as the requirement to hire and maintain a pharmacist, nurse, physician or physician’s assistant as the dispensary clinical director. The clinical director must train employees, develop patient educational materials, and be on the premises at all times or on call at all times.

State Medical Board

The State Medical Board issued rules that only allow physicians to recommend marijuana for medical purposes if they have an active and unrestricted license “to practice medicine and surgery or osteopathic medicine and surgery.” Before they can recommend, physicians must take a two-hour educational course on medical marijuana. Other than that, the process to obtain a certificate to recommend will follow the current licensure structure and require no additional fee and no separate background check. Physicians may only recommend marijuana to treat one of the 21 listed qualifying medical conditions.

Physicians may not have any ownership interest in or compensation agreement with another medical marijuana entity.

Department of Commerce

The Department of Commerce made changes to the original proposed cultivator rules that were issued on November 1, 2016. The major changes included increasing the number of Level II small business licenses from 6 to 12, increasing the maximum cultivation area for Level I licensees from 15,000 square feet to 25,000, and increasing the maximum cultivation area for Level II licensees from 1,600 square feet to 3,000 square feet. Also, beginning on September 9, 2018, upon approval, a Level I cultivator may expand an existing facility to an area not to exceed 50,000 square feet, and a Level II cultivator may expand an existing facility to an area not to exceed 6,000 square feet.

These proposed regulations are nowhere near finalized because final rules are not due until September 8, 2017 for the Board of Pharmacy and State Medical Board, and May 6, 2017 for the Department of Commerce. Also, as was the case with the cultivator regulations, the dispensary and physician regulations are subject to change after public comments.

Marijuana w Black BackgroundPresident-elect Donald Trump has nominated Senator Jeff Sessions from Alabama as the new Attorney General. Senator Sessions has previously expressed his opposition to the legalization of marijuana. Therefore, it seems that the Cole Memo may be revisited. The Cole Memo is a major reason why marijuana continues to be legal medically and/or recreationally in 29 states, but still illegal under federal law.

On August 29, 2013, Deputy Attorney General James M. Cole published Guidance Regarding Marijuana Enforcement (the “Cole Memo”). In light of the legalization of medical and recreational marijuana occurring in many states, the Cole Memo sought to clarify the Department of Justice’s (“DOJ”) enforcement priorities. Some of the most important DOJ enforcement priorities with respect to marijuana are the prevention of:

  • Distribution to minors
  • Interstate movement
  • Use of firearms in connection with marijuana
  • Drugged driving
  • Organized crime

Outside of the above enforcement priorities, the DOJ relies on state and local law enforcement to address marijuana activities.

However, under the incoming Attorney General, the Cole Memo might be revisited. Senator Sessions has been on record as saying there is a need to foster “knowledge that this drug is dangerous, you cannot play with it, it is not funny, it’s not something to laugh about… and to send that message with clarity that good people don’t smoke marijuana.” Further, he has also been critical of President Barack Obama even mentioning marijuana:  “You can’t have the President of the United States of America talking about marijuana…You are sending a message to young people that there is no danger in this process. It is false that marijuana use doesn’t lead people to more drug use. It is already causing a disturbance in the States that have made it legal.”

One potential way to steer clear of Senator Sessions’s statements that marijuana is dangerous and addictive might be to focus on cannabidiol (“CBD”), and not tetrahydrocannabinol (“THC”). THC is the main psychoactive component of marijuana, and one of the reasons it might be labelled “dangerous.” However, CBD has no psychoactive effects and is used for relief from seizures, anxiety, and inflammations.

In the end, because marijuana is now legal medically and/or recreationally in 29 states, it is possible incoming Attorney General Jeff Sessions will be hesitant to abrogate the Cole Memo and undo all of the progress in this arena, and shutter nascent small businesses with the resultant employment loss and loss of tax revenue. However, based on his prior statements and stances, we are in uncertain times.

Marijuana PlantMarijuana ballot initiatives passed in seven out of nine states on November 8, 2016. California, Massachusetts, and Nevada, states where medical marijuana is already legal, passed ballot initiatives to legalize recreational marijuana. A similar initiative in Arizona failed. Maine’s effort to expand beyond medicinal to legalize recreational marijuana is still too close to call. Arkansas, Florida, and North Dakota all voted to legalize medical marijuana. Montana voted to loosen restrictions on the existing medical marijuana laws.

The results were as follows:

Recreational

  • Arizona – 52% No, 48% Yes
  • California – 56% Yes, 44% No
  • Maine – 50% Yes, 50% No (local outlets are declaring victory for legalization, but it is still too close to call)
  • Massachusetts – 54% Yes, 46% No
  • Nevada – 54% Yes, 46% No

Medical

  • Arkansas – 53% Yes, 47% No
  • Florida – 71% Yes, 29% No
  • North Dakota – 64% Yes, 36% No

Loosened Restrictions on Medical Marijuana Laws

  • Montana – 57% Yes, 43% No

Medical marijuana is now legal in 29 states and the District of Columbia. In seven of those states and the District of Columbia, with Maine pending, recreational marijuana is also legal.

legalization-go-feds-09-01As the November 8, 2016 election deadline looms, marijuana legalization in one form or another is on the ballot in nine states throughout the nation. Seven states seek to expand what is already legal and two states seek to enter the medical marijuana field. Below is a list of what is on the ballot and where the current polling stands in these states.

Legalization of Recreational Marijuana

  • Arizona – Although medical marijuana is already legal, Proposition 205, which would legalize recreational marijuana for adults 21 years or older and institute a 15% tax, has a 50% approval among registered voters against a 40% opposition, while 10% of voters are undecided, according to a recent Arizona Republic/Morrison/Cronkite News poll.
  • California – Medical marijuana has been legal in California since 1996. Proposition 64 would legalize recreational marijuana for adults over 21 and establish a 15% sales tax at the retail level and a $9.25 per-ounce cultivation tax.  Proposition 64 has a 60% approval in a Field Poll/Institute for Government Studies against a 31% opposition, while 9% are undecided.
  • Maine – Medical marijuana has been legal in Maine since 1999. Question 1 is a ballot initiative to enact the Marijuana Legalization Act which legalizes recreational marijuana and allows individuals over the age of 21 to possess, transport, transfer, or furnish 2.5 ounces of marijuana or 6 immature plants or seedlings and imposes a 10% retail tax. In a Portland Press Herald poll, 53% of registered voters would vote in favor of Question 1, 38% would vote against, and close to 10% are still undecided.
  • Massachusetts – Medical marijuana is legal in Massachusetts. Voters will decide on Question 4, The Regulation and Taxation of Marijuana Act, which would legalize recreational marijuana and allow people 21 and older to possess up to 10 ounces of cannabis and to grow up to six plants for non-commercial purposes. According to a new poll by WBUR/MassINC Polling Group, 55% are in favor of Question 4.
  • Nevada – Nevada already has legalized medical marijuana. Question 2 is a legislative initiative to legalize recreational marijuana by allowing a person 21 or older to purchase, cultivate, possess, or consume up to an ounce of non-concentrated marijuana or 1/8 of an ounce of concentrated marijuana, to cultivate up to six plants, and establish a 15% excise tax on wholesale sales of marijuana. A recent poll by Suffolk University showed that 57% are in favor of the initiative, while 33% oppose.

Expansion of Medical Marijuana

  • Florida – Florida already allows patients with severe seizures to obtain low-tetrahydrocannabinol (“THC”), high cannabidiol (“CBD”) oils, and terminally ill patients to obtain full scale medical marijuana. Amendment 2 to the Florida Constitution would greatly expand the list of allowed medical conditions and requires a 60% super majority to pass. Of the eight polls conducted since January of 2015, all eight show an approval rating of at least 60%.
  • Montana – Montana legalized medical marijuana in 2004. However, Senate Bill 423, which went into effect on August 31, 2016, implemented laws that banned medical marijuana advertisements, limited dispensaries to three patients, and required a review of doctors who prescribed medical marijuana to more than 25 patients per year. Now, Initiative 182 is on the ballot and it would repeal the three patients per dispensary limit and the doctors’ review. Although there is no current polling on Initiative 182, over 65% of voters support allowing dispensaries based on an August 2015 poll conducted by Public Policy Polling paid for by Marijuana Policy Project.

Legalization of Medical Marijuana

  • Arkansas – Arkansas has two competing medical marijuana ballot initiatives, Issue 6 and Issue 7. Issue 6, the Arkansas Medical Marijuana Amendment, is an amendment to the Arkansas state constitution, while Issue 7, the Arkansas Medical Cannabis Act, is an initiated state statute. The two issues also differ in that Issue 7 would allow patients to grow their own marijuana and Issue 6 would not. A 2012 medical marijuana ballot initiative narrowly lost, and a major organizer of that effort believed the reason to be the “grow your own” provision. He split off from the Issue 7 organizers and formed the competing Issue 6 that doesn’t contain the “grow your own” provision. The Talk Business & Politics-Hendrix College poll found that 49% favor Issue 6 and 43% oppose. Further, 36% favor Issue 7 while 53% oppose.
  • North Dakota – Initiated Statutory Measure 5, the North Dakota Compassionate Care Act, would legalize medical marijuana in North Dakota not to exceed three ounces per patient, and all dispensaries would have to be vertically integrated non-profit entities with not more than 1,000 growing plants and 3,500 ounces (218.75 pounds) of “usable” marijuana at any given point. Like Montana, there are no recent polls regarding medical marijuana in North Dakota, but a 2014 poll by the University of North Dakota College of Business and Public Administration found that 47% of voters supported legalizing medical cannabis, with 41% opposed and 9% neutral.

On September 20, 2016, the Supreme Court of Ohio adopted an amendment to the Ohio Rules of Professional Conduct that clarifies the ethical responsibilities for attorneys under Ohio’s new medical marijuana law (H.B. 523).

Previously, on August 5, 2016, in a non-binding advisory opinion, the Supreme Court of Ohio’s Board of Professional Conduct ruled that attorneys could not counsel or advise clients regarding marijuana businesses in Ohio (Opinion 2016-6). After this opinion, the Supreme Court of Ohio moved quickly in order to clarify an attorney’s ethical responsibilities under H.B. 523. Thus, on August 30, 2016, the Supreme Court of Ohio proposed the following amendment to Prof. Cond. R. 1.2(d)(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.

After the commenting period ended on September 18, 2016, the Supreme Court of Ohio adopted the proposed amendment verbatim on September 20, 2016. Now, attorneys may counsel and advise clients regarding conduct expressly permitted under H.B. 523, and if they do, attorneys must also advise clients of related federal law.

However, Prof. Cond. R. 1.2(d)(2) does not address an attorney’s use of medical marijuana or ownership of a medical marijuana business. Therefore, pursuant to the advisory opinion, an attorney’s use of medical marijuana or ownership of a medical marijuana business may reflect adversely on the attorney’s honesty or trustworthiness and fitness to practice law.

A copy of the amendment can be found here.

Since 2014, Congress has maintained an appropriations rider prohibiting the Department of Justice (“DOJ”) from using funds in relation to 33 named states and territories “to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235, § 538, 128 Stat. 2130, 2217 (2014). DOJ has regarded this as preventing only efforts directed at those states, and not a bar to its prosecution of violations of federal law by individuals engaging in medical marijuana activities that would be permissible under state medical marijuana laws.

In accordance with that interpretation, DOJ brought criminal actions against a number of marijuana cultivators, processors and distributors in California and Washington. The defendants sought to have their cases dismissed and asked for an injunction against DOJ. Ten of those cases were consolidated for consideration by the United States Court of Appeals for the Ninth Circuit. The opinion, U.S. v. McIntosh, No. 15-10117 (9th Cir. Aug. 16, 2016), contained the following points:

  1. The Appeals Court had jurisdiction because the lower courts had denied injunctions sought by the defendants
  2. The defendants had standing to challenge DOJ’s allegedly improper use of funds
  3. DOJ’s interpretation of the rider was incorrect. Prosecuting individuals under the federal Controlled Substances Act, 21 U.S.C. §§ 801 et seq., for marijuana felonies would inevitably “interfere” with states’ efforts to implement their medical marijuana programs
  4. The DOJ is, however, entitled to prosecute individuals who are not acting in strict compliance with the programs of the listed states
  5. The cases should be remanded for evidentiary hearings on whether the defendants were actually acting in conformity with their states’ medical marijuana laws

For those interested in medical marijuana in Ohio, it is important to note that Ohio is not one of the listed states, so the current version of the appropriations rider does not protect Ohio or Ohio defendants. With the Ninth Circuit’s broad interpretation of the rider, it may be that passage of the rider for the 2017 fiscal year will not be as automatic as in prior years and will not be extended to additional jurisdictions.

 

The U.S. Drug Enforcement Agency (“DEA”) may issue a decision as soon as this summer regarding the potential downgrading of cannabis to allow for its medical use.

In response to a letter from seven U.S. Senators in December, 2015, the U.S. Drug Enforcement Agency issued a 26-page response in April, 2016, that many believe indicates a willingness to change the current illegal status of marijuana from a Schedule I substance to a Schedule II prescription drug.

While changing the status of a Schedule I drug is rare, it is not unprecedented, as the DEA has done so at least five times in the past.

If cannabis became a Schedule II prescription drug, it would legalize medical marijuana in all 50 states and the U.S. territories. It is uncertain whether such a change would force those states that have legalized marijuana for recreational use to revert to prescription-only marijuana use, or whether the DEA would allow states to decide whether and how to make legalized marijuana available for recreational use. This is an editorial that discusses the various options available to the DEA.

According to a press release from Ohio Governor John Kasich’s office, the Governor signed six bills yesterday, including H.B 523, which authorizes the use of marijuana for medical purposes and establishes the Medical Marijuana Control Program. H.B. 523 was passed by the Republican controlled Ohio General Assembly on May 25, 2016. According to Ohio law, the Governor had ten days to sign the bill, or it would have become law, absent a veto.

The newly enacted law would allow the use of medical marijuana for medical conditions, such as chronic pain and some twenty other specified medical conditions. The law would reschedule marijuana as a schedule II drug and permit medical marijuana to be administered by patch, vaping, oil and edible, but would not permit smoking.

While the law takes effect in 90 days, it is estimated that the formation of the various boards of control and commissions and approval of regulations will take considerably longer. The law requires that medical marijuana be available within two years. A complete text of the law is available here.