NJ Lawyers Can (Ethically) Use And Invest In Cannabis

By: Peter J. Gallagher (LinkedIn)

In a recent opinion, the New Jersey Supreme Court Advisory Committee on Professional Ethics ruled that attorneys may use cannabis and operate/invest in cannabis businesses. The Committee noted that this conduct “remains technically illegal under federal law,” but does not, “as a general matter,” violate the Rules of Professional Conduct.

The Committee analyzed the issue under RPC 8.4(b), which prohibits an attorney from committing a “[1] criminal act that [2] reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer.” The Committee briefly recounted the history of cannabis regulation, both in New Jersey and on the federal level. It observed that, while legal under New Jersey law, the production, sale, and use of cannabis is still a “criminal act” under federal law. So the question before the Committee was whether this criminal act “reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer.”

The Committee held that it does not. This did not appear be a terribly difficult decision for the Committee. Instead, it succinctly concluded that “conduct that fully complies with State law” does not reflect adversely on the lawyer’s character. Moreover, although “technically illegal” under federal law, the Justice Department has “publicly taken the position that it will not enforce the federal law [criminalizing cannabis] in certain situations.” Therefore, the Committee held that “lawyers, like other New Jersey residents, may engage in this conduct.”

But the Committee cautioned that cannabis, “like alcohol, prescription medications, and certain over-the-counter drugs, can affect a lawyer’s ability to provide competent representation of clients.” So a lawyer must be careful “not to use cannabis in a manner that would impair the lawyer in the provision of legal services.”

And, as it relates to owning or investing in cannabis businesses. the Committee reminded attorneys that they must (a) “strictly comply with Rule of Professional Conduct 1.8(a),” which prohibits a lawyer from entering “into a business transaction with a client or knowingly acquir[ing] an ownership, possessory, security or other pecuniary interest adverse to a client unless” certain conditions are met, and (b) be aware of potential conflicts of interest under RPC 1.7(a)(2) if they invest in a client’s business.

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