Marijuana Law and Policy

On January 4, 2018 the Department of Justice rescinded Obama-era guidance to United States Attorneys, including the 2013 memorandum issued by then-Deputy Attorney General James Cole, calling previous guidance “unnecessary” in light of general principles governing federal prosecutorial discretion. Up until this point, the 2013 Cole Memo was widely viewed as the biggest reason state-legal marijuana programs to flourished over the past 5 years, as it directed United States Attorneys to consider distinct federal enforcement priorities when deciding whether to utilize finite government resources to prosecute state-legal marijuana businesses or whether to rely on state and local law enforcement to address those concerns. Click here to read the full client alert.

Today, the Ohio Department of Commerce announced the 12 Level I medical marijuana cultivator provisional license recipients (with one recipient having a possibility of choosing from two different locations) and the 12th recipient of the Level II cultivator provisional license.

In awarding the medical marijuana cultivator licenses, the Department appears to have placed a large amount of emphasis on experience, awarding many of the licenses to companies who have licenses in other states. The emphasis on experience was one of the reasons why the Department declined to include a residency requirement during the application process, which riled many Ohio medical marijuana advocates.

Level I cultivators may have up to 25,000 square feet of cultivation area in a growing facility, with the ability to increase that area up to 75,000 square feet with approval from the Department of Commerce.  Level II cultivators may have an initial cultivation area of up to 3,000 square feet, with an option to increase to up to 9,000 square feet with prior approval. The winners will have nine months from the date they were notified of selection for a provisional license to obtain a certificate of operation by passing all applicable inspections.

The winning applications may be seen here:  https://www.medicalmarijuana.ohio.gov/cultivation.

To learn more about Ohio’s medical marijuana industry, you can reach out to one of the firm’s Marijuana Law & Policy attorneys.

What was scheduled as a hearing by the House Judiciary Committee regarding Attorney General Jeff Sessions’ testimony about possible Russian Government contacts with the Trump Campaign, also included another hot-button issue: Jeff Sessions’ views regarding marijuana.

Representative Steve Cohen, a Democrat from Tennessee, stated some of the purported benefits of marijuana, and his hope that the Department of Justice would consider states as the “laboratories of democracy.” (Justice Louis Brandeis). Attorney General Sessions stated that they would look at purported benefits and would conduct a “rigorous analysis of marijuana usage,” but he added that he was not as “optimistic” as Representative Cohen. Further, when Attorney General Sessions was asked to clarify his comment that people who use marijuana are “not good people,” he tried to explain that the context in which he made this comment was his experience as a U.S. Attorney where “it was seen” that “good people did not use marijuana.”

In the end, Jeff Sessions did not explain his prior comments on marijuana. Nonetheless, his statement that he is not optimistic that any investigation or research would show any purported benefit of marijuana may be a harbinger of things to come.

The Ohio Board of Pharmacy has released model dispensary applications

Today the Ohio Board of Pharmacy released, through the Ohio Medical Marijuana Control Program Website, the application materials for Ohio dispensaries. The Board will accept applications electronically beginning on November 3 at 8:00am and ending on November 17 at 2:00pm.

Similar to what the Department of Commerce did for medical marijuana cultivator applicants, the Board will hold two Q&A periods where it will accept questions from the public. These Q&A periods will be from September 19 – October 5 and October 16 – October 20, 2017. The Board will host an informational webinar on October 3, 2017.

Ohio will license 60 dispensaries, allocated among several geographic districts. There is a $5,000 fee per dispensary application.

Application materials for medical marijuana processors have not been released yet by the Department of Commerce, though it is anticipated that processor applications will be accepted after cultivator provisional licenses are awarded in November.

Conflicting messages from the federal government maintains uncertainty in the legal marijuana industry

Tom Angell reports that Deputy Attorney General Rod Rosenstein discussed the 2013 Cole Memo during an appearance at the Heritage Foundation recently. According to Angell, Rosenstein said, “[w]e are reviewing that policy. We haven’t changed it, but we are reviewing it. We’re looking at the states that have legalized or decriminalized marijuana, trying to evaluate what the impact is[.]” He continued, “[a]nd I think there is some pretty significant evidence that marijuana turns out to be more harmful than a lot of people anticipated, and it’s more difficult to regulate than I think was contemplated ideally by some of those states[.]”

Rosenstein also reiterated that while the Cole Memo may be interpreted to mean that the risk of prosecution is unlikely, it does not mean that an individual’s conduct is legal under federal law, even if that individual is acting in compliance with a conflicting state law.

While Rosenstein is right that the Cole Memo merely guides federal law enforcement in making decisions whether or not to charge marijuana businesses, Rosenstein apparently did not discuss the Rohrabacher-Farr amendment that has been renewed in every appropriation bill since 2014, and was recently renewed until this December.

Under Rohrabacher-Farr, the Department of Justice is prohibited from using funds to interfere in the implementation of state medical marijuana programs. The Ninth Circuit has held that this means the Department cannot prosecute individuals acting in strict compliance with state law. United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016). And at least one Michigan federal court has allowed a hearing to determine whether a federal defendant can take advantage of Rohrabacher-Farr’s protections. United States v. Samp, E.D. Mich. No. 16-cr-20263 (March 29, 2017). Attorney General Jeff Sessions objected to the renewal of Rohrabacher-Farr earlier this year.

The conflicting signals by various federal officeholders could be the new normal for marijuana policy. Over the last year, for example, we have seen the following:

For more information on the application process for Ohio medical marijuana dispensaries and processors, please contact Frantz Ward attorney Thomas Haren or another member of the firm’s Marijuana Law & Policy group.

Two recent events serve as continuing examples of how attitudes towards marijuana are changing in the U.S. The National Football League (“NFL”), which strictly enforces its drug policies, may be changing its mind on medical marijuana. The NFL Players Association (“NFLPA”) has already been working on its own study for the potential use of medical marijuana for pain management. On August 1, 2017, the NFL wrote a letter to the NFLPA indicating its willingness to work together to study the potential use of marijuana for pain management and for acute and chronic conditions for players.

Further, former players have come out in favor of the use of marijuana for medical reasons. For example, on July 24, 2017, former New York Jets Defensive End Marvin Washington was one of five plaintiffs in a lawsuit filed in the Southern District of New York against Attorney General Jeff Sessions, the Department of Justice, and the Drug Enforcement Agency. See Washington, et al. v. Sessions, et al., No. 1:17-cv-05625 (S.D.N.Y.). The lawsuit seeks to remove marijuana from the list of Schedule I drugs, as it is currently classified under the Controlled Substances Act. Marijuana is classified in the same category as heroin, LSD, and Quaaludes, to name a few. However, drugs such as methamphetamine and cocaine are classified as Schedule II drugs and are subject to less strict enforcement.

In Cristina Barbuto v. Advantage Sales & Marketing LLC and Joanne Meredith Villaruz, Massachusetts Supreme Judicial Court Case No. SJC-12226, the Massachusetts Supreme Court held on July 17, 2017, that an employee in Massachusetts can bring a claim of disability discrimination after being fired for using medical marijuana.

Medical marijuana was approved by Massachusetts voters in 2012, and the law provides that individuals who qualify for the use of medical marijuana cannot be punished for using it.  Barbuto suffers from Crohn’s disease and was using medical marijuana two to three times per week, although never during the work day, when she began working for Advantage Sales in 2014. After failing a mandatory drug test, Barbuto was terminated by Advantage Sales on the basis that Advantage follows federal law and not state law, and of course the use of marijuana is illegal under federal law.

In upholding Barbuto’s right to bring a disability discrimination claim under State law, the Massachusetts’ high court stated that although an employee’s possession of medical marijuana may violate federal law, that fact does not make it a per se unreasonable accommodation. The court further stated that even if allowing the use of medical marijuana was unreasonable, Advantage should have still engaged in the interactive process with Barbuto to determine if there was another potential, reasonable accommodation, such as using another drug that did not violate the company’s drug policy. Advantage will have the opportunity to demonstrate the unreasonableness of medical marijuana as an accommodation on remand.

While the court allowed Barbuto’s disability claim to stand, it did state that employers do not have to tolerate the use of medical marijuana during work time, nor allow medical marijuana for individuals in safety-sensitive jobs or those covered by the federal drug-free workplace laws. The court additionally stated that there is no implied statutory cause of action for individuals alleging a violation of the state’s medical marijuana law.

As reported in prior postings, Ohio’s medical marijuana law is much more protective of employers than the law passed in Massachusetts, but it is of course difficult to prevent determined courts from finding ways around what would otherwise be clear provisions of the law.

The uncertainty as to how the Trump administration will proceed in the current environment of marijuana being illegal under federal law while legal, to some extent, in 29 states, has not yet caused significant angst within the $6 billion marijuana industry. Attorney General Sessions’ most recent statements on the issue may change that.

On Monday, June 12, 2017, Massroots.com published a letter it was able to obtain, that Sessions sent to Senators McConnell and Schumer, and Speaker Ryan and Representative Pelosi on May 1, 2017. In this letter, AG Sessions renewed the DOJ’s opposition to the Rohrabacher-Farr amendment. (The law which prohibits the DOJ from spending funds to interfere with the implementation of state marijuana laws.)  He asked that Congress not include such restrictions in DOJ appropriations. Sessions cites “an historic drug epidemic,” “potentially long-term uptick in violent crime,” and that smoking marijuana “has significant health effects,” to support his position in this letter. Sessions also states that drug traffickers and criminal organizations cultivate and distribute marijuana and do so “under the guise of medical marijuana laws.”

It is not yet clear what effect, if any, this letter will have. Nonetheless, it seems to signal a change in the Trump Administration’s stance on marijuana that could turn a $6 Billion industry on its head.

A copy of the letter can be obtained at:  https://www.scribd.com/document/351079834/Sessions-Asks-Congress-To-Undo-Medical-Marijuana-Protections.

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.