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What you should know about Federal Marijuana Laws and Policy

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The truth is. Medical marijuana does not exist in the United States. That’s because federal law broadly criminalizes the possession, manufacturing, and distribution of marijuana. The worst sentence you can get for “intentionally or knowingly”-manufacturing, dispensing, or possessing with intent to distribute weed or any other illegal drug is life imprisonment.

In 2016, 75-year-old disabled veteran Lee Carroll Brooker was sentenced to die in prison thanks to a mandatory sentence involving marijuana. Here is the sad part; Lee who suffers from multiple ailments had no intention of selling weed. His crime was growing about three dozen plants behind his son’s house in Alabama which he intended to use for health reasons. For that, Brooker got life behind bars without the possibility of parole.

Legally speaking, schedule I drugs such as marijuana have no legitimate medical purpose thus cannot be prescribed or dispensed. However, state law (depending on where you are) allows doctors to prescribe and pharmacists to dispense a controlled substance such as cannabis “for a legitimate medical purpose”.

Since marijuana cannot be lawfully prescribed, some states such as California have adopted other terms such as “order” and “recommendation”.

The reason why some doctors avoid prescribing marijuana is. They risk losing their DEA registration, going to prison or being excluded from Medicare program if they help you obtain marijuana.

Operating an Illegal Marijuana Business

Being the financier, operator, owner, banker, landlord or vendor for an illegal marijuana business is illegal. On top of the potential life felony for dealing with cannabis, it is separate federal crime to manage or control any place (temporarily or permanently) for the purpose of storing, growing, distributing and manufacturing marijuana or any other schedule I drug.

If you are a lender, financer/investor, landlord or ancillary service provider to a marijuana business, you could be prosecuted as a co-conspirator, principal or an aider and abettor.

What if I go Legit?

Even if you comply with all the rules, you are not safe from persecution by the Department of Justice (DOJ). In 2013, DOJ issued the “Cole Memorandum”. The memo directs federal prosecutors to refrain from persecuting marijuana businesses that comply with state law. The issue is. The Cole memo does not say that marijuana businesses are immune to federal prosecution. It states:

“Prosecutors should continue to review marijuana cases on a case-by-case basis and weigh all available information and evidence, including, but not limited to, whether the operation is demonstrably in compliance with a strong and effective state regulatory system… The primary question in all cases-and in all jurisdictions-should be whether the conduct as issue implicates one or more of the DOJ’s enforcement priorities”

What you should know about the Cole Memo is. It only addresses criminal prosecution. It does not speak about regulator sanctions and civil forfeitures both of which can occur without anyone being charged with a crime. For instance, if you manage or control a facility used to grow, distribute or sell marijuana. You can be fined up to $250,000 or twice the gross receipts of your business.

Can I Hide Behind Bankruptcy if my Marijuana Business Fails?

If your business fails, you cannot use bankruptcy for protection from creditors. The problem is, marijuana is illegal on the federal level, because of that, even if the government does not take all business assets in taxes or forfeiture, creditors are allowed to.

If you are considering filing for bankruptcy, you should talk to a bankruptcy lawyer and find out what works.

Civil Forfeiture Laws

Civil forfeiture laws allow the government to take any property traceable to proceeds of a marijuana business and all the assets used to operate the business. That means that, even without persecution, the government can take all your assets.

All the government has to do is show “probable cause” that you are guilty of a crime and that the assets are in some way linked to a crime.

Your Lawyer May be Forced to Snitch on you

The crime-fraud exception states:

“Communication with a lawyer in furtherance of illegal activity is not privileged, even if the lawyer is not complicit in a crime”

Because of that, the government or a private litigant could assert that all attorney-client communication about the transactions or operations of a legal marijuana business are not privileged thus are discoverable in litigation. That simply means that, if your marijuana business is in legal trouble, you should watch what you say.

Federal Money Laundering Laws

If you run a legal marijuana business, finding a bank that accepts your money can be problematic, why? Marijuana is still illegal on the federal level.

The thing is. Federal law requires businesses and banks to report any transaction that exceeds $10,000. If you don’t report such transactions you could be fined or prosecuted.

It is a federal offense to receive more than $10,000 from a known marijuana business. The penalty for that is 10 years behind bars.

Generally, if you are running a marijuana business or are intending to start one, you should comply with FDA policies or rules. You should also keep up with policy changes and marijuana news.

 

 

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