Law firm positions itself for medical marijuana

  • Article by: ADAM BELZ , Star Tribune
  • Updated: August 2, 2014 - 2:00 PM

Lawyers at Thompson Hall are positioning themselves for the creation of a new business.

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Aaron Hall and Maureen Carlson, lawyers at Thompson Hall, want in on the ground floor of medical marijuana in the state when it becomes legal.

Photo: Brian Peterson • brian.peterson@startribune.com,

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The medical marijuana business in Minnesota will initially be tiny, legally complex and highly regulated.

Potential customers must suffer from cancer or glaucoma, HIV/AIDS, Tourette’s syndrome, symptoms of multiple sclerosis, Crohn’s disease, seizures or a few other illnesses, including terminal ones that cause severe pain or nausea. Nobody will be allowed to smoke marijuana; they’ll have to take it in a pill or by vaporizer.

The state health commissioner’s best estimate is that 5,000 people will get a card and buy cannabis pills or oil under current law. Only two companies will be allowed to make and sell the products.

And yet, lawyers at Thompson Hall, a Minneapolis law firm, are doing everything they can to grab a foothold in the business.

“It’s the first time that I know of in my lifetime where a whole new industry is opening up,” said Aaron Hall, one of the lawyers at the firm looking at the issue. “If you’re considered the law firm at the center of that industry, you’re likely to have the biggest and best clients.”

While they are not the only businesspeople tuning in as the state launches this small new industry, Hall and colleague Maureen Carlson were the ones who on Wednesday petitioned the state Supreme Court to amend the Minnesota Rules of Professional Conduct to allow lawyers to advise medical cannabis businesses. They’re studying marijuana markets and regulations, hosting a conference this fall, reaching out to consultants and talking with entrepreneurs.

They’re doing all this because while the market will initially be small, it could expand dramatically in coming years if the law is relaxed, and just two companies will have a marijuana business in place by then.

“The fact that the government is going to give a monopoly to just two companies means huge financial opportunity for them,” Hall said. “Whoever gets a foothold in Minnesota as this new industry starts will benefit from market data, relationships, an understanding of the process and a growing brand that will give them a huge advantage if the marketplace expands in the future.”

Cannabis producers will need accountants, bankers and yes, lawyers. Maybe lawyers most of all, which is what these two attorneys are thinking.

Marijuana is still illegal under federal law, even though it will be legal for some patients in Minnesota by July 2015. Carlson and Hall petitioned the Supreme Court out of desires for both clarity in their professional rules and publicity for their law firm, because they believe navigating the law will be difficult.

The official publication of the Minnesota State Bar Association devoted its July cover story to the murky federal backdrop of the program. The Department of Justice has vacillated between relaxed and aggressive postures on prosecuting businesses that sell marijuana products in states where it’s legal. More basic issues can come up, such as the processing of credit-card transactions, which banks are wary of with medical marijuana payments for fear of violating federal racketeering law.

“They’re going to need help navigating through the statute,” Carlson said of companies. “It’s very long. It’s very complicated.”

There’s also more for the health commissioner to work out, research to be done, and new medical conditions — such as chronic pain, which would add tens of thousands of new patients to the market — to consider adding to the list of illnesses that qualify for medical cannabis. The law will evolve, Carlson said.

“It’s almost like an amoeba that’s going to be changing as the Department of Health does their research,” she said.

Demand will be limited at first, but Carlson and Hall are banking on the value of being a first mover, both in the medical marijuana business and in the practice of law that serves those businesses. It’s a long-term play.

“There’s 1,400 licenses in Colorado and some of the market value, they think, is about $10 million,” Carlson said. “In Minnesota, there only being two, we’re talking tens and tens of millions of dollars. And there’s potential that it could be decriminalized in the future.”

That, after all, is what happened in Colorado, 12 years after the first medical marijuana was legalized.

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