Frankly, unless you’ve been living under a rock, you know our country is a-changing. Party politics aside, the past several years have resulted in a rapidly growing number of states choosing to take small, or sometimes giant, steps toward legitimizing and legalizing marijuana, an industry many have viewed with disdain for years. On November 8, 2016, citizens in eight states voted to move in this new direction. Today, 44 states, both red and blue, have turned “green,” passing various levels of marijuana-permissive laws.1
April 01, 2017 Features
Marijuana: At the Crossroads of Law, Science, and Technology
By Gina Tincher
But marijuana isn’t the only green in this equation. Legalizing marijuana in any form yields tremendous financial windfalls. Colorado, a state whose marijuana experiment has been closely watched by other states, reported over $1 billion in marijuana sales by October 2016, a total which surpassed the state’s combined sales in 2014 and 2015. That translated to $76 million in taxes and fees collected by the state in 2014 and $135 million in 2015. With this amount of money at stake, states are going to have an increasingly hard time passing up the revenue that marijuana can bring to a state’s economy.
Big Law and Marijuana: A Growing but Cautious Experiment
Gone are the days when small, boutique law offices were the only attorneys willing to represent marijuana clients. Today, some of the country’s largest and most respected law firms are venturing into the world of weed. In fact, while marijuana-permissive laws represent a relatively new direction in American law, many of the issues surrounding marijuana legalization echo those seen in other, longer-established industries.
For example, while patents for advancements in agricultural biotechnologies are nothing new, today intellectual property attorneys are drafting patents for new and improved strains of marijuana. But many patent prosecutors—and their clients—remain reluctant to mention marijuana in patent applications. A western-based patent attorney recently drafted a patent application for an item used during the harvest of marijuana. However, because this item could arguably be used to harvest other crops, no mention of marijuana was made in the patent application. This particular attorney relayed concerns that the inclusion of marijuana references in a patent application could spell trouble with patent examiners, who are federal employees charged with upholding federal law. And marijuana remains illegal under federal law. The risk of reputational harm—both to himself and to the inventor—was another reason why this attorney made no reference to marijuana in the application.
Some would say this attorney’s fears are unfounded, especially because the United States itself has held a patent for medical marijuana since 2003.2 But others believe caution is warranted here. Under the “moral utility” doctrine, for example, the U.S. Patent and Trademark Office has the authority to deny patent protection for inventions found to be “illegal,” “immoral,” and/or contrary to the “health and good order of society.”3 While the doctrine is largely dormant today, it continues to be cited, and according to at least some legal commentators has not yet entirely died.4
However realistic these fears may or may not be, there are thousands of attorneys, scientists, and entrepreneurs who have chosen to tap into their particular areas of expertise in order to address the various challenges surrounding this industry.
Old and New Challenges
Marijuana is both a crop and a drug, and as such it poses both old and new challenges. For example, while it shares some characteristics associated with other crops, such as pesticide use and regulation and energy consumption concerns, its status as a Schedule I drug simultaneously forces states to reexamine things such as DUI enforcement mechanisms and laws.
Unless you have seen a commercial marijuana cultivation and production facility, what you’re picturing in your mind is likely way, way off. While the origin may have been amateur growing facilities in secreted locations, today these are large, complex, highly sophisticated and highly regulated facilities. In many states, cultivation occurs entirely indoors, in large warehouses and greenhouses. As a result, in many states where marijuana has been legalized (both medical and recreational), most industrial and warehouse-type real estate has skyrocketed in value, and most has been acquired by the marijuana industry.
Much like other crops, marijuana cultivation requires enormous amounts of energy and water. This raises serious concerns in places like California and Colorado, two states that have legalized marijuana but which often face serious water shortages. As a result, companies are marketing a constant stream of new products to the marijuana industry, including wastewater reduction/treatment technologies and energy reduction and recycling mechanisms, in order to address these issues. These technologies allow a marijuana business to reduce costs through energy savings, and they better enable marijuana businesses to comply with a state’s environmental regulations.
Though marijuana cultivation shares some of the same problems as other crops, marijuana offers unique challenges as well. For example, unlike most large-scale agriculture operations, determining which pesticides are safe to use on marijuana has been especially difficult. The reason? Federal law is primarily responsible for governing the use of pesticides. The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) sets forth the application process for new pesticides and contains strict prohibitions on any off-label, or nonapproved, uses of pesticides. Because marijuana remains illegal under federal law, the Environmental Protection Agency (EPA), the agency tasked with ensuring pesticides do not pose unreasonable risks to human health or the environment, has never specifically approved any pesticide for use on marijuana. However, for existing pesticides, states may issue a special local needs registration, which would then allow a pesticide previously approved for use on one crop to be used on another type of crop. For example, if a pesticide is approved for use on tobacco plants, it would likely be approved for use on marijuana crops. While special local needs registrations are issued by a state, once reviewed and approved by the EPA, they become federal registrations under FIFRA.
The problems surrounding the unapproved use of pesticides on marijuana cannot be overstated. For a crop that is consumed both by smoking it and ingesting it, careful consideration must be given to the types of pesticides allowed to be used on marijuana plants. In early 2015, Denver, Colorado, began placing administrative holds on marijuana producers who regulators found to be treating crops with nonapproved pesticides. During these holds, growers could continue to care for and cultivate their marijuana plants, but could not market the marijuana. In an effort to provide consistency and guidance to regulators and growers alike, on November 12, 2015, Colorado Governor John Hickenlooper issued an executive order directing state agencies to take all necessary steps to protect the public from marijuana contaminated by pesticides.5
Nonapproved pesticide use is likely to result in a growing number of products liability suits across the United States. In a 2015 Colorado case, two marijuana consumers sued the company that grew and sold them marijuana, claiming that it contained a pesticide not approved by the state for use on marijuana.6 While a Denver district court judge later dismissed the suit, finding that the marijuana in question had not harmed the plaintiffs, this type of suit will likely appear in other courts across the country.
In addition to public health concerns, marijuana-permissive laws also require that states examine potential public safety impacts, such as drivers impaired by marijuana. In Colorado, the legal limit for tetrahydrocannabinol (THC) in a person’s system is set at five nanograms. The problem is, unlike alcohol, law enforcement currently has no roadside test to determine the level of THC a driver has in his or her system. Companies quickly recognized the opportunities this void offered, leading to what one author dubbed a “marijuana breathalyzer arms race.”7
Law enforcement agencies such as the Colorado State Patrol are testing various prototypes of new roadside tests to detect the level of THC in a person’s body.8 During a three-year pilot program, Colorado troopers will ask suspected impaired drivers for consent to swab the inside of their cheek. It should be noted, however, that the legality of this method of roadside testing has yet to be addressed by the Colorado courts. Roadside testing is but one area in which technology experts and lawyers are working together.
The opportunity for collaboration is strongest, perhaps, when it comes to finding a solution to the marijuana industry’s banking challenges. Today, because marijuana remains illegal under federal law, it is a largely unbanked industry. Most banks are concerned that taking money from a marijuana business could lead to federal asset seizures and other legal troubles with the feds, but that may soon change. Companies have created various technologies that enable marijuana businesses and banks to do business while ensuring compliance with anti-money laundering regulations. For example, companies are marketing products that will act as a sort of regulatory middleman, creating a detailed record of a marijuana business’s incoming cash and monitoring the marijuana business’s online reputation, thus reducing banks’ fears of potential seizures and other regulatory compliance actions that could stem from taking money from those operating outside a state’s marijuana laws.
Marijuana will continue to pose unique and evolving legal, scientific, and technological challenges and opportunities. Moving forward, lawyers, scientists, and the business world will undoubtedly have their ears close to the ground for any signs of the new administration’s position on marijuana, but even amidst the legal uncertainty, these groups will continue to work together on marijuana’s myriad of new and old challenges. ◆
Endnotes
1. Sixteen of these states only allow the use of cannabidiol (CBD), which contains no THC, and only for certain specified conditions. See Deep Dive: Marijuana, Nat’l Conf. St. Legislatures (2016), http://www.ncsl.org/bookstore/state-legislatures-magazine/marijuana-deep-dive.aspx.
2. See John Crudele, Feds Patented Medical Pot . . . While Fighting It, N.Y. Post, Sept. 11, 2013, http://nypost.com/2013/09/11/feds-patented-medical-marijuana-even-when-they-were-fighting-it/.
3. See Omar A. Khan & Richard A. Crudo, Scandalous, Immoral and Disparaging Patents in Light of Tam, Law360 (Feb. 25, 2016), https://www.law360.com/articles/761308/scandalous-immoral-and-disparaging-patents-in-light-of-tam.
4. See id.
5. Colo. Exec. Order No. D 2015-015, available at https://www.colorado.gov/pacific/sites/default/files/D%202015-015%20MJ%20Pesticides_2_1.pdf.
6. See Kristen Wyatt, Marijuana Pesticide Stirs Lawsuit in Colorado, Salt Lake Trib., Oct. 5, 2015, http://www.sltrib.com/home/3028172-155/marijuana-pesticide-stirs-lawsuit-in-colorado.
7. See Inside the Marijuana Breathalyzer Arms Race, 420 Intel (Dec. 22, 2016), http://420intel.com/articles/2016/12/22/inside-marijuana-breathalyzer-arms-race.
8. Rob Low, Colorado State Patrol Troopers Testing Marijuana DUI Devices, Fox 31 News (Jan. 26, 2016), http://kdvr.com/2016/01/26/colorado-state-troopers-testing-marijuana-dui-devices/.