Summary: The emerging market for legal marijuana has so far lacked access to big law representation.
Though marijuana has been legalized in 23 states and the District of Columbia for medicinal use, and in four states for recreational use, progress is slow. Federal law still officially prohibits the distribution of marijuana, and legal marijuana business owners have found themselves unable to work with law firms or major banks.
The banks avoid them because there is some friction about the federal law. As there is a lot of difficult legislation about anti-money laundering obligations – Marijuana businesses sometimes lead to abuses and illegal distribution – no large bank wants to do business with them.
Further, no major law firm will work with them either. Risk-averse firms are antsy against representing a company that in some sense is committing criminal activity. Maine’s state bar went so far as to say it would be unethical for a lawyer to advise a marijuana company – and this despite the fact that marijuana is legal in Maine.
This has led marijuana businesses to resort to small banks and local lawyers – usually criminal defense lawyers who have gained expertise in marijuana law.
Congress has passed the Marijuana Business Access to Banking Act meant to allow the businesses to work with larger banks, and hence make the business less of a cash-only venture. They could pass similar legislation to allow legitimate business owners to work with law firms as well.