HB published the following 11 May
Regulations continue to develop in Oregon for psilocybin services, and businesses will soon operate in the new industry. As we explained in a recent webinar, the new industry will be heavily regulated, and psilocybin-related businesses will be expected to strictly comply with these regulations and the Oregon Psilocybin Services Act. These businesses will need help from lawyers to operate legally, however the legal rules of professional conduct (RPC) may present a barrier to such legal services for psilocybin ventures.
Cannabis and the rules of professional conduct
Lawyers are governed by the RPC and related commentary. Violating those rules can result in license suspension and even disbarment. Each state enacts its own rules, but most states have some variation of Rule 1.2 which governs the scope of legal services. In Oregon, Rule 1.2(c) provides:
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
This rule created problems for cannabis businesses in recent history. Since 2012 many states, including Oregon, passed laws allowing retail cannabis businesses. However, most of these laws created a significant amount of “red tape” for businesses. Further, “marihuana” is still federally prohibited as a Schedule I substance under the Controlled Substances Act (CSA). Thus, lawyers feared repercussions from assisting cannabis businesses, because such services technically violated Rule 1.2 by assisting businesses that were violating the CSA.
Businesses struggled to find legal advice in the complex industry. Luckily, some states did not penalize lawyers for assisting these businesses. Soon thereafter, many states changed their professional conduct rules to allow lawyers to represent cannabis businesses. For instance, Oregon added paragraph (d) under Rule 1.2, which states:
A lawyer may counsel and assist a client regarding Oregon’s marijuana-related laws. In the event Oregon law conflicts with federal or tribal law, the lawyer shall also advise the client regarding related federal and tribal law and policy.
What about psilocybin and the RPC?
Like marijuana, psilocybin is a Schedule I substance under the CSA. Additionally, psilocybin businesses will need help navigating the heavily regulated psilocybin industry in Oregon. Hence the same Rule 1.2 complexities will arise for lawyers. The Oregon Supreme Court could simply amend Rule 1.2 (d) to include “Oregon’s psilocybin-related laws.” But will the rules change for psilocybin the same way they changed for cannabis?
Perhaps. But there are significant differences between the recreational cannabis industry and the psilocybin services industry. First, the rise of recreational cannabis businesses was largely a response to the Cole Memo, a guidance document (now rescinded) from the Department of Justice (DOJ) which limited federal enforcement of cannabis laws. This document led many states to change professional conduct rules. Second, cannabis has a longer history of legalization efforts. For example, Oregon first permitted medical cannabis in 1998 through Measure 67. In contrast, Oregon was the first state to legalize therapeutic psilocybin, which did not occur until 2020.
As of now, there are no guidance documents from the DOJ regarding psilocybin enforcement. Further, therapeutic psilocybin is a new concept in the legal world, as opposed to medical cannabis which began legal development in the 1990s. With these stark differences, the Oregon Supreme Court may be reluctant to include “psilocybin” in the Rules of Professional Conduct. Alternatively, the Oregon Bar Association could assure lawyers they will not be penalized for such services in the form of an ethics opinion.
Outlook for lawyers and the psilocybin industry
While there are differences between the two industries, the cannabis industry has certainly created a pathway for state psychedelics programs like psilocybin. Modern U.S. society is experiencing a paradigm shift regarding these substances, and a psychedelic renaissance has taken shape. But legal representation could remain scarce for psilocybin businesses until the rules change or enforcement is limited. This requires action from the Oregon Supreme Court or the Oregon Bar Association.
