California Ethics Committee Green Lights Advising Cannabis Clients

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The California State Bar Ethics Committee recently adopted Opinion No. 2020-202, which concludes that attorneys may ethically advise clients regarding compliance with California’s cannabis laws and assist them with conduct permitted under state law, despite the fact that the client’s conduct may be prohibited under federal law.

Regarding the scope of advice and assistance, the opinion states that such advice and assistance “may include the provision of legal services to the client that facilitate the operation of a business that is lawful under California law.” Examples of permitted legal services include “incorporation of a business, tax advice, employment advice, contractual arrangements, and other actions necessary to the lawful operation of the business under California law.”

Attorneys providing such legal services must inform the client of the federal-state conflict of laws, including the potential for criminal liability and the penalties that could be associated with a violation of federal law. Attorneys must not advise or assist in concealing or evading prosecution for such violations. The opinion makes clear that attorneys must also advise the client of other potential impacts upon the attorney-client relationship, including on the issue of privilege.

The ethics of advising cannabis clients comes down to informing such clients of potential federal liability but in no circumstances assisting them circumvent enforcement of federal laws. The opinion emphasizes its advisory nature, highlighting that it is non-binding upon the courts, the State Bar of California, its Board of Trustees, any persons or tribunals charged with regulatory responsibilities, or any licensee of the State Bar.

The opinion can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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