Local lawyer to focus on ever-changing business aspects of marijuana law

With two Michigan organizations currently seeking more than 250,000 signatures to beat the Christmas deadline for getting their ballot proposals on the November 2016 ballot, local lawyer Robert Hendricks has been noticing a need in assisting those wanting to open legal businesses. In 2008, the state legalized medical marijuana and partially legalized the use, transportation and growing of the drug.

Hendricks started paying more close attention last year, when he heard a story on NPR about recreational marijuana businesses in Colorado having trouble with creating bank accounts. Without access to banking services, vendors had difficulty paying employees and property taxes and became targets for robbery and theft.

“I was just fascinated by that phenomenon and why an otherwise rational legal system would allow that kind of thing to happen,” Hendricks says. “I began to dig into that question and it just rippled out into dozens and dozens of other fascinating legal issues that began to present themselves to folks who wanted to engage in lawful, marijuana-related activity.”

After some thought, Hendricks decided Michigan had a place and need for lawyers familiar with business concepts to get involved and provide legal counsel for people interested in starting up their own legalized marijuana activity. He’s finishing plans to create a law firm staffed by knowledgeable lawyers that, should recreational marijuana be legalized in Michigan, are able to provide such a service.

At the moment, there is a promising outlook for legalization of recreational marijuana in Michigan. The two petitioning organizations, the Michigan Cannabis Coalition and Michigan Comprehensive Cannabis Law Reform Initiative Committee, continue to receive signatures and money from supportive citizens.

“The numbers seem to be trending toward a popular majority of citizens favoring marijuana legalization,” he says. “More and more regular citizens are saying ‘This prohibition thing in respect to marijuana doesn’t seem to be working.’”

If the state approves even one of the proposals, Michiganders would then face problems similar to those faced by people in other states. Under federal law, marijuana continues to be classified as an illegal substance and those that use, sell, distribute or transport can still be subject to federal prosecution.

Essentially, the federal government is concerned with risky situations associated with marijuana, such as use by minors, organized crime and interstate transportation. States that have legalized some facet of marijuana with a structure that works to prevent these situations, however, are less likely to provoke the government, says Hendricks.

“The feds have said ‘If you’re compliant with state law and state law is compliant with our objectives of preventing certain bad things, we probably won’t come after you,’’ Hendricks says.

Even if businesses avoid problems with the federal government, they still have to deal with other issues, like Section 280E of the Internal Revenue Code, which prohibits them from deducting business expenses from their gross revenues. Just growing marijuana could lead to eviction or dismissal from another job. Despite that, Hendricks believes the atmosphere will continue to evolve and normalize.

“I think over time, depending on how legalization goes, this will become more of a market like any other market, like craft beer or wine. But it’s going to take time and there will be some bumps in the road,” he says.

With a decision possibly arriving next fall, Hendricks’ firm will be primed and ready when the law changes. Even before it does, he won’t wait for the dust to settle to establish himself as a credible presence in the marketplace.

“There are a larger and larger number of entrepreneurial-minded folks who are saying ‘Now’s the time,’” Hendricks says. “There are a larger number of risk-taking entrepreneurs who say ‘I think enough of the risks have been resolved and I’m ready to jump in,’ and those people deserve legal counsel so that they can understand the lay of the land.”