The burgeoning cannabis industry has ignited western parts of the nation but simmered in the south. Albeit gradually, Georgia has made progress to allow industrial hemp licensing since 2019, but attorneys remain barred from directly advising on business opportunities within the state.
Looking ahead to 2022, Atlanta-based attorney Brent Walker predicted burgeoning opportunities to advise related industry suppliers, an increase in investors and private clients seeking representation, and potential litigation related to additional regulatory restrictions.
“rope walk”
“I think you’re going to see a lot of people trying to invest more in the industry, and lawyers need to be aware of that,” Walker said. “One of the things that I find really interesting in a lawyer is understanding the regulatory framework when it comes to raising funds. I think what lawyers will see a lot is potential clients coming up to them and saying, ‘Hey, I want to come in here.’”
Walker pointed out that industrial hemp is legal in Georgia because of its tetrahydrocannabinol, or THC, content of 0.3 or less. THC is one of the many cannabinoids, or compounds found in the cannabis plant that are responsible for the “high” associated with marijuana.
Gov. Brian Kemp advanced the state’s cannabis industry this year by signing Senate Bill 195, which would allow the establishment of up to 30 state-licensed retailers of low-THC oil products to qualify patients. Because low-THC oil is legal under Georgian law but considered criminal under federal law, the State Bar of Georgia then proposed a rule change that would allow Georgia attorneys to advise on low-THC oil business opportunities , but the Georgia Supreme Court denied the request in July.
Walker said the ruling highlights the existence of a gray area through which attorneys should tread cautiously.
Brent Walker, with the Walker company in Atlanta. (Photo courtesy)
“You have to set a boundary as an attorney and abide by the code of ethics, but also try to serve your client as best you can,” Walker said. “For many lawyers, it will be a small tightrope walk for the foreseeable future.”
According to Walker, more challenges could lie ahead for the industrial hemp sector. The continued discovery of new low-THC cannabis strains beyond the delta-9-THC cannabinoid, which is the focus of Georgia’s hemp law, could trigger further regulatory requirements and further complications for the further development of the state’s canna business.
“In the last year, we’ve seen a real surge in new cannabinoids, particularly delta-8 and delta-10, that other states have started to change and ban their hemp laws,” Walker said. “That had a negative impact on people nationally.”
But he said that doesn’t mean lawyers interested in the sector should let their enthusiasm fizzle out.
“Neighboring” Opportunities
(Image credit: Ian Miller/Adobe Stock)
Attorneys looking for a safer entry point into the industry might choose to represent related but neighboring cannabusiness industries, including equipment manufacturing and greenhouse construction, professional recruiting, procurement and insurance, according to Walker.
He urged those interested in the medical marijuana sector to be patient. Despite the existence of a statewide low-THC patient registry, licensed dispensaries to support these patients remain on hold as the Georgia Access to Medical Cannabis Commission is still in the process of creating rules for retail THC distribution licenses.
That hasn’t stopped retailers from going to the market, albeit at the risk of arrest, which has created additional avenues for criminal representation.
“Stephens County gas stations and smoke shops and locations that sold Delta-8-THC products were raided and people arrested,” Walker said. “I saw that Alpharetta put in place an ordinance that doesn’t allow you to have low THC oil production facilities. Under the new law, you cannot set up your cultivation facility in Alpharetta under the Georgia Hope’s Act.”
Meanwhile, recreational marijuana use hasn’t been licensed in Georgia, but cities like Atlanta have decriminalized possession of up to an ounce of cannabis with fines ranging from $75 to $300.
Walker welcomed the progress made throughout 2021, but said more needs to be done to clarify and move the state’s canna industry forward. He said attorneys could play a preventive role, working with lawmakers to clarify the licensing process, or a reactive role, by advising clients on complaints about government restrictions.
“I don’t really see that as an ethical violation for attorneys dealing with cannabis industry litigation,” Walker said. “The thrust of the Supreme Court ruling seemed to indicate that you really don’t want to be a transaction guy advising customers on how to grow crops that are illegal at the federal level. It’s a big problem, but for example the 20 or so companies that have lodged a protest all have lawyers working with them. Well, that’s an afterthought.”
