Spartan Lawyer Winter 2019
New Frontiers: Cannabis, Cars, and Companion Animals
We asked thinkers in three fast-moving legal fields for their best guesses about what's changing in the next decade. Here's what they had to say.
TEN YEARS OUT: MARIJUANA
“I don’t think that we’ll need to wait a decade,” to see what the future holds for marijuana, according to practitioner John Fraser, ’15. “I think – maybe a month?”
As an associate attorney at Grewal Law PLLC specializing in cannabis law, he regularly works with entrepreneurs interested in operating marijuana-related businesses, but he’s quick to point out that working in cannabis law goes beyond navigating clients through an evolving regulatory framework. Municipal zoning, taxation, bioengineering and plant patents, social and racial justice, trademarks, probable cause, civil forfeiture, the Uniform Commercial Code, criminal law – working in marijuana law places him at the center of an ever-expanding legal universe. While lawyers in other fields might hesitate to speculate about the future, Fraser jumps into the thought exercise with characteristic enthusiasm.
Fraser practices in Michigan, where recreational marijuana was legalized via ballot initiative in 2018. Legal sales of adult-use marijuana products began on December 1, 2019. The state’s regulated and licensed market is in its infancy, and 600+ communities have opted to ban marijuana businesses. Fraser sees those bans as temporary obstacles: “People are going to look around and see that the place hasn’t burned down yet. Then they’ll be willing to try it in their municipality.”
This wait-and-see mentality is unsurprising, given the decades-long cannabis culture wars. “For the majority of the country’s history, marijuana was legal,” Fraser observes. The first major use restriction occurred under the Marihuana Tax Act of 1937 and continued under the 1952 Boggs Act and the Controlled Substances Act in the ’70s. “There’s the gap between the majority and the government on this issue,” he says.
WHY DOES SCHEDULING MATTER?
In 1970, the DEA placed marijuana in its most tightly restricted category of drugs, reserved for those with no accepted medical use. Its controversial Schedule I placement makes studying cannabis in laboratory settings challenging, as the federal government generally bans grant-funded clinical studies. While states make marijuana legal to use, the federal government shows no signs of making it easier to study. And that matters, as consumers hear ever-expanding, unverified claims regarding the psychological and medical benefits of marijuana use.
Fraser explains that states have legalized medical and recreational marijuana from ballot initiatives rather than from proactive legislation because elected officials are unwilling to take on the issue directly. Today, popular opposition to marijuana legalization is collapsing in the face of a generational shift, but the federal government shows no probable signs of legalizing marijuana or pulling it off Schedule I.
“While I’d like to think it’ll be descheduled in the next ten years, that’ll take Congressional action,” he says, noting that the proposed bipartisan legislation is stalled in Congress. He thinks that rather than taking a direct route, the federal government will likely just ignore marijuana entirely, quietly removing the threat of federal enforcement from growers, retailers, and researchers.
But Fraser speculates the IRS could prove an unlikely – and powerful – champion for comprehensive reform. Section 280E of the US Tax Code states that a business engaging in the trafficking of a Schedule I or II substance cannot take tax deductions on drug-related expenses except for their cost of goods sold. This means that all revenue is taxed, whether or not the business owner realized any actual income. For growers and retailers, that can mean facing a 40-50% tax bill, a situation that Fraser calls “bizarre and unfair.” That’s a devastating tax burden, particularly for new start-ups that need to invest heavily in their operations for the first few years. He thinks that ironing out the tax issues might force federal action on marijuana more broadly.
On the judicial front, Fraser believes that the coming decade will see the courts dealing with an emerging issue: with more marijuana use in the population, how can law enforcers identify marijuana-impaired driving? While alcohol intoxication can be assessed with an on-the-spot chemical test, marijuana metabolizes differently, and its effects vary greatly between users. Fraser believes that road testing for marijuana impairment will have to be cognitive, rather than chemical, though proving that driving quality is poor without a clear, objective standard will present a real challenge for police, judges, and prosecutors. “We’ll be litigating these cases in the next few years,” he says.
When asked about which state would be the last to legalize recreational use, Fraser takes a moment. “Probably somewhere in the deep South – Alabama, Mississippi?”
But he believes that it’s just a matter of time. As of today, 34 states have completely legalized medical marijuana, and 11 have legalized recreational adult use. So far, not a single state has backpedaled.
“More mature markets will mean more specific products and a more specific customer experience,” he says. “There’s going to be much more appeal to your average person when they can choose a controlled experience.”
“It’s not going anywhere, for sure. Once all the reforms happen, all that’s left will be regulatory and compliance work – and those will still be good jobs for lawyers.”
Thank You to Our Bold Prognosticators!
John Fraser, ’15
Associate Attorney | Grewal Law PLLC
Mr. Fraser assists clients with a wide range of cannabis law issues and teaches on that topic. He is a chair-elect of the Council for the Marijuana Law Section of the State Bar of Michigan.