State Bar of South Dakota raise ethical issues for attorneys representing clients in cannabis business

A South Dakota conduct rule doesn’t differentiate between state and federal laws
Updated: Jan. 5, 2021 at 5:05 PM CST
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RAPID CITY, S.D. (KOTA) - South Dakota voters said yes to legal marijuana back in November. But will it be ethical for South Dakota attorneys to represent marijuana businesses here?

The South Dakota State Bar Association advised attorneys against providing legal services to businesses seeking to produce or sell marijuana in the state. The opinion comes in the January edition of the State Bar of South Dakota newsletter.

It says there is no doubt that manufacturing distributing or dispensing or possessing marijuana remains illegal under federal law. A rule of the South Dakota Rules of Professional conduct says “a lawyer shall not counsel a client to engage or assist a client in conduct the lawyer knows is criminal or fraudulent, but may discuss the legal consequences of that conduct.

The statement concludes that the rule does not distinguish between client conduct that is illegal under South Dakota law and client conduct that is illegal only under federal law.

It says a lawyer may not ethically provide legal services to assist a client in establishing licensing or otherwise operating a marijuana business.

The state bar’s website states lawyers who fail to abide by the Rules of Professional Conduct “may be disciplined and given penalties ranging from a private reprimand to permanent loss of the privilege to practice law.”

A memo published by the American Bar Association in 2017 says advising lawyers on representing marijuana businesses “presents a problem for lawyers as they advise their clients in the sale and use of marijuana.”

It notes as of July 2017, 16 state lawyer disciplinary offices have modified rules for representing marijuana-related clients. A majority of states that had not modified guidance for rule 1.2(d) continued regulations under the belief that “the rule bars assistance with conduct that violates the Controlled Substance Act.” (delete)

Legal marijuana in South Dakota has faced several challenges since voters in November approved Amendment A, which legalized recreational marijuana, and Initiated Measure 26, which legalized medical marijuana. Two state law enforcement officials have filed a lawsuit claiming Amendment A is unconstitutional.

Gov. Kristi Noem has spoken out against both measures, saying they’re “the wrong choice” for South Dakota.

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