14 June 2016

The Las Vegas Sun reports….

Although Nevada law allows the sale and use of medical marijuana, attorneys in the state could soon face punishment for professional misconduct if they get involved in the business.

The Nevada Supreme Court is considering revising the rules of professional conduct for attorneys by adding a clause saying that the sale, use or possession of marijuana — even when allowed by state law — is prohibited by federal law and could result in misconduct actions. The court is seeking comments on the proposed addition and is scheduled to review it at 1 p.m. July 7 in Las Vegas.

“Marijuana is still considered an illegal substance under the feds,” explained Michael Sommermeyer, spokesman for the Nevada Supreme Court, “and federal law trumps state law.”

The hearing came about at the request of the State Bar of Nevada, “seeking guidance” from the court on the role of attorneys in the industry under its “Rule of Professional Conduct,” Sommermeyer said. It follows a 2014 comment on the same rule, which upheld Nevada attorneys’ right to provide counsel to clients in the industry. If upheld, the new language, which states that “use, possession and distribution of marijuana in any form still violates federal law,” would force Silver State attorneys to “divest immediately” or risk losing their law licenses, Sommermeyer said. The vaguely worded addition is directed primarily at dispensary-owning attorneys, many of whom have invested hundreds of thousands of dollars in the business of medical marijuana.

Las Vegas lawyer Gary Schnitzer is one of them. A minority owner in Oasis Medical Cannabis dispensary, he has sunk six figures into opening and operating the legal pot store.

Schnitzer called the timing of the state bar’s recommendation to review the policies odd and unfair, saying it should have been figured out in 2013, before licenses for the new dispensaries were issued.

He pointed to other Nevada professionals, including casino owners and doctors, whose respective control boards prevented them from participating in dispensary ownership before applications were submitted in the wake of the 2013 legislative session. Attorneys currently invested in dispensaries will face a “double whammy,” Schnitzer said.

“Not only are you forced to liquidate, but you have to sell at a cheaper price, because everyone knows you’re selling,” he explained.

If the revisions to the conduct rule proceed, the punishment for violators has yet to be determined, Nevada State Bar spokeswoman Kimberly Farmer said. Per state bar regulations, attorneys guilty of misconduct can face “a caution, a reprimand, a suspension or a disbarment.” Nevada law license-holders who try to hang onto their dispensaries could face any of those punishments, based on the severity of their misconduct, Farmer said.

But all attorneys ultimately would have to make the decision of giving up either their law license or medical-marijuana investment, Sommermeyer said. “It’s really up to them to choose which one.”

Schnitzer said the value of medical-marijuana dispensaries, most of which are still in their infant stages, wouldn’t merit losing a law license, even for attorneys who have gone “all in” as majority owners. “At this point, the dispensary isn’t generating enough revenue to make it my livelihood, and I don’t think it is for anybody,” he said.

Farmer said the revisions, which were “several months in the making,” would ban ownership in future recreational dispensaries if the Nevada Marijuana Legalization Initiative succeeds in legalizing recreational marijuana use for Nevadans age 21 and older.

Las Vegas attorney and state Sen. Tick Segerblom, who championed the cause of medical marijuana in 2013, doesn’t have an ownership stake in any dispensaries. But after fighting for the “medical and business opportunities” brought to Nevada from the plant, Segerblom said he was “nervous” about the direction of the state bar and state Supreme Court.

“Nevada was supposed to be known as a state’s rights kind of place,” Segerblom said. “The bipolar nature of the marijuana industry is pretty amazing.”


Supreme Court of Nevada

Nevada State Bar

Nevada Judiciary Press Release