As cannabis heads to the mainstream, more and more colleges and universities are offering classes geared toward business professionals of the future
By Marguerite Arnold
Marijuana legalization, while celebrated by advocates everywhere, has increasingly created a legal quagmire across the country as state laws clash with federal law and jurisdiction.
On the business front, legal tangles caused by the clash in federal and state law are complex. This starts with the fact that most state-legal marijuana businesses still operate without bank accounts. But that’s not the only challenge. Changing state regulations mean headaches all the way down the production and distribution line. Legal operations, as a result, mandate an expense line for a business lawyer from the get-go.
“Marijuana is, on the one hand, a taboo subject outlawed by the federal government,” said Marc Ross, founding partner at Sichenzia Ross Friedman Ference LLP in New York City. “Yet, on the other hand, (it is a) a burgeoning, billion dollar industry being recognized by more and more states. While people know about marijuana, and many think it is a straight-forward issue, most people do not appreciate the unique complexities associated with the subject because it is presently illegal under federal law, yet legal in 24 states plus the District of Columbia.”
This comes as no surprise to those operating in the business who face such realities daily. Until federal law changes the scheduling of marijuana, operating in this business could be a risky proposition from several different angles.
The biggest problems this legal conflict has caused are in the imposition of federal law over state. This was the case when federal DEA agents made busts even in states where marijuana was legal under state law, but the issue of federal precedence is not limited to criminal law. The continued lack of clarity regarding medical marijuana’s efficacy has meant that federal agents could also impose draconian penalties against which those accused had no defense – even if operating legally under state law.
Even state marijuana law is not set in stone, but rather evolving along with the legalization wave sweeping the country. As a result, marijuana business law is blooming. Many cannabis-specific law firms are popping up around the country, from Washington State and Colorado to Florida, Nevada and New York, as state after state legalizes some form of the drug. Larger firms are beginning to develop cannabis law specialties. And many younger lawyers and law students are beginning to investigate the possibility of a new kind of green job.
Ross, who has also worked as a legal advisor in the formation of state marijuana policy, taught the first cannabis law class in the country at Hofstra University in New York in the spring of 2015.
“Hofstra was initially reluctant to allow a course on marijuana, as they were concerned about the potential perception of such a course,” Ross said. “However, when the dean and curriculum committee realized the critical issues I intended to cover, including issues concerning federalism, securities, bankruptcy, financing, banking, employment, ethical and accounting, they seemed to appreciate the importance and uniqueness of this cutting-edge topic. It also didn’t hurt that Harvard was also offering a class on accounting for marijuana companies at the time.”
His students clearly enjoyed the class.
“It’s an unbelievable discussion point,” student Anthony De Ingeniis said. “People love to ask, ‘You took a weed class?’”
De Ingeniis said “the class introduced me to other aspects of law that I may have ignored such as tax law, banking, securities, and finance. I’m also excited to see what future patents and products may come about in the medical world if marijuana is descheduled.”
Robert Volynsky took the class for more personal reasons.
“I have heard many horror stories from friends of mine regarding the marijuana business,” he said. “The stories ranged from the fear of being shut down by the federal government to having too much cash on hand and being an easy target for robbery. When I saw the class on the schedule, I realized this would be a unique opportunity to tackle those issues. I learned quickly that those were just two bread crumbs of a much more complex structure.”
Like many outside the industry, law students were uniformly shocked to learn how difficult it actually is to run day-to-day operations of cannabis-related businesses because of the associated problems that remain in terms of Internet jurisdiction and banking law. Said De Ingeniis, “I was most surprised to learn that dispensaries and other related companies are having great difficulty with finance and banking. It’s strange that legitimate companies that are doing everything they can to fit within state regulation and federal suggestions are unable to safely create and manage accounts.”
Ross said most of his students support some kind of reform, even if they never end up working in the cannabis industry. This too also seems to auger the end of the road for moral codes baked into state bars, which force lawyers to take sides on the issue.
As Volynsky said, “I think it is a very lucrative industry, which will only become more lucrative, and in the process unravel more legal dilemmas.”
Marguerite Arnold is a freelance journalist and the author of “Green: The First 12 Months of Modern American Marijuana Reform.”