Cannalex lawyers predict business opportunities in medicinal, recreational marijuana legalization

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LEGAL NEWS PHOTO BY CYNTHIA PRICE

by Cynthia Price
Legal News

Whether Michigan continues to allow only medicinal use of marijuana or joins other states in legalizing recreational use as well, Bob Hendricks and his colleagues at Wrigley, Hoffman, and Hendricks think there is a lot of business opportunity in the offing.

Ben Wrigley, Tom Hoffman and Bob Hendricks started Cannalex Lawyers and Counselors to address that potential as well as current issues faced by those in the marijuana industry.

Hendricks presented on the subject to NALS, the association for legal professionals,  on Feb. 11, continuing the group’s fascinating series of luncheon speakers.

He gave a broad overview of the history and politics of marijuana criminalization, focusing on the legal issues around the plant.

In the 1800s, Cannabis Indica was a legal ingredient in elixirs sold “over the counter.” (Cannabis Indica and Cannabis Sativa are the main varieties or “strains” humans use for medicinal and recreational purposes, though the hemp plant used over centuries is also a member of the Cannabis family.)

For the NALS presentation, Hendricks included a slide showing a  couple of antique medicine bottles, including Dr. McAlister’s cough syrup, which gave dosage instructions for both adults and children.

In 1906, the Pure Food and Drug Act required labeling of cannabis when it was an ingredient in such products.

Then the 1937 federal Marijuana Tax Act required that possession of the plant or its products be accompanied by a tax stamp — yet it is likely no stamps were issued, thereby making possession illegal for all intents and purposes.
Many theorize that Mexican immigrants brought with them the type of marijuana used to get high, and that the Marijuana Tax Act was at least in part a reaction during the depression years against all things Mexican.

Interestingly, the 1937 act was declared unconstitutional by the U.S. Supreme Court in a 1969 case brought by the famous drug experimenter Dr. Timothy Leary. “Leary v. United States Government is an interesting kind of side note.
He had been arrested as he was going on vacation and they found a joint in his glove compartment. Because the Tax Act only applied if you admitted you had marijuana, he argued that it was a violation of his right to be protected against self-incrimination, and the Supreme Court agreed,” Hendricks said in a later interview.

But marijuana’s bad reputation stuck, and in 1970 it was listed as a Schedule I drug in the Controlled Substances Act, which means it has a high potential for abuse, is physically or psychologically addictive, has “no currently accepted medical use,” and “[t]here is a lack of accepted safety for use... under medical supervision.”

Also included in Schedule I are heroin, LSD, mescaline, and “Ecstasy.”

Efforts to have marijuana removed from the Schedule I list have so far not been fruitful, despite a good body of research that finds significant and varied medical uses for it.

Hendricks said that he had read a theory about why that might be: the notion of great healing powers in a simple plant grown in the ground did not sit well with the pharmaceutical industry. “Big pharma is a many-multiples-of-billion-dollars-a-year industry, and they want to see marijuana continue on that list; they like the monopoly,” he said. “That’s not original to me, it’s something I’ve read more than once.”

Hendricks, who started his career at Varnum in 1983, decided to join former colleagues Ben Wrigley and Tom Hoffman in early 2014 after years as an in-house lawyer at Universal Forest Products.

It was about that time that his interest in potential legal work for the burgeoning marijuana industry began. “I was listening to a radio news report out of Colorado, after that state legalized it, discussing the challenges the local marijuana entrepreneurs were facing,” Hendricks explains. “They couldn’t find banks that would even allow them to open a checking account, because it was still illegal at the federal level.

“Because of my background as a commercial lawyer, I was pretty familiar with the banking industry — thought not as a banking lawyer. So I was intrigued by this and I began to read about it. And it rippled out for me, every time I’d read an article there was a reference to another conflict. So I went to Ben and Tom and said I thought there was a very significant overlap with what we do as business lawyers every day, and I didn’t see anybody in Michigan paying much attention to this. They agreed, so we started planning to open Cannalex.”

As their website, www.cannalexlaw.com, says, “Each member of our team shares a passion and excitement for the evolving area of marijuana law, which intersects with years upon years of experience in other business industries.”
So far, many of the key players in the state have been criminal lawyers, or litigators in cases concerning interpretation of the Medical Marihuana Act developed as a result of the majority of Michiganians voting yes on the 2008 ballot question.

There is at least one group working to get full legalization of marijuana on the ballot in Nov. 2016 in Michigan; if approved, Michigan would join four states where it is already legal. Reportedly MI Legalize has a good percentage of the needed signatures, and their website says there will be an additional push on March 8, primary election day. Other initiatives seem to have petered out.
Nationally, most polls show that nearly 60 percent of the populace would like to see marijuana legalized. But even if Michigan votes it down, there are still plenty of issues requiring legal assistance in the medical marijuana field, Hendricks says.

He ended his NALS presentation with a number of hypothetical client questions. He finds one — “I have some great marketing ideas for a marijuana business.  How do I trademark those ideas to protect them from competitors?” — particularly daunting.

“{P]rotection of marijuana related intellectual property (trademarks and certain patents) is very limited by rules of the Patent and Trademark Office,” he said in the presentation, and he adds that not only does that affect such inventions as better delivery systems, it also acts to inhibit research and development on the many ways cannabis can be used to improve the lives of those ill or in pain.

Add to that the fact that research is challenged by the necessity of sourcing marijuana plants from just one approved source, as well as having to jump through hoops of the Drug Enforcement Agency and other federal agencies, and it seems that there are almost insurmountable obstacles to marijuana entrepreneurs flourishing.

Hendricks feels that the U.S. Congress is likely to address changing marijuana’s status only when there is a critical mass of states legalizing its use, whether recreational or medicinal.

Whatever the challenges, Hendricks applauds the State Bar of Michigan for being the first in the country to start a Marijuana Law Section. The chair of the new section is Bernard Anthony Jocuns of Lapeer, the well-known criminal lawyer Daniel Grow is vice-chair, and Hendricks is a council member.

“I am proud of our state bar association leading the way in this important step in the mainstreaming of marijuana into the business fabric of our state,” Hendricks says in his blog on the Cannalex website.