As stated in several places on this Website, the thoughts of the authors are not legal or any other form of professional advice, and reading this blog is not deemed to be a “legal or professional consultation” for any purpose. Patrick and I are free to opine on any matter, regardless of how unqualified we are to hold an opinion, or how ignorant our conclusions may turn out to be – hey, that’s what the blogosphere is for!
Since the State of Arizona sued the United States on May 27, 2011, the US hasn’t responded to the declaratory relief complaint (is the AMMA enforceable or isn’t it?). There was some hope that Eric Holder, the Attorney General, would sort out what seemed in the eyes of some to be a mess created by the federal government’s statements of policy, through local US Attorneys, on how the federales would treat merchants of marijuana and their “grow site” suppliers. Across the country, states claimed to be at a loss how to proceed under the medical marijuana statutes their plebescites or legislatures had implemented. The confusion, I’ve argued, was self-inflicted, since the Controlled Substances Act of 1970 (CSA) has banned possession and sale of marijuana since, well-1970. That’s a few years before the implementation of the state acts, beginning with California’s. Nonetheless, after the David Ogden memo of October, 2009, states have claimed entitlement to be confused, given what appeared to less-careful readers to be a statement of a “hall pass” from the Department of Justice.
James M. Cole, Deputy Attorney General, issued another memo (“Cole Memo”) on June 29, 2011 that got lost in the holiday celebrations but is now getting substantial play in the MM press. Wish I could say it’s new, but nothing about the Cole Memo is. Justice says that illegal sale of marijuana enriches “large scale criminal enterprises, gangs and cartels.” Justice says that prosecution of “significant traffickers” of marijuana remains a core priority. Cole then observes the fact that states are moving to authorize “large-scale, privately-operated industrial marijuana cultivation centers.” He decrys persons “who are in the business of cultivating, selling or distributing marijuana”; and he indicts as violators of the CSA “those who knowingly facilitate such activities” without regard to the existence of state law or local ordinances permitting them. He notes that compliance with state laws and local ordinances is not a defense to the CSA’s proscriptions.
I don’t know how much plainer the federal government can be on the subject. The DoJ will prosecute those involved in the chain of distribution, and that includes property owners who make leases, it appears from a literal reading of the memorandum. (I don’t believe the text of the memorandum invites any other sort of reading.)
What may a landlord do in these circumstances in Arizona? How do I know; I haven’t read the landlord’s lease! But I am aware of this: White v. Mattox, 127 Ariz. 181, 184, 619 P.2d 9, 12 (1980) notes that recovery under a contract will be denied “if the acts to be performed under the contract are themselves illegal or contrary to public policy.” Illegality isn’t just dictated by state law, but by all laws. Were I a landlord, I’d consult with counsel about the wisdom of declaring my lease with a medical marijuana enterprise void. At a minimum, I’d consult about getting signed up an amendment to my lease with the enterprise in which the parties agree on a couple of things. First is that the landlord is free to market the leased premises (and rent them) to other businesses, absent an affirmative court ruling upholding the AMMA. Second, that the Tenant’s medical marijuana enterprise cannot open for business to the public (assuming it hasn’t been rented to another prospect in the meantime) until there is a definitive ruling on the State of Arizona’s suit for declaratory relief, or until the case is dismissed. I’d seek an agreement with that tenant that if the case goes badly for the State (the AMMA is void), the lease is terminated as of the date of the final ruling in District Court. My hunch at this point is that the medical marijuana enterprises are feeling beaten down by all this uncertainty – to the point that outright cancellation of the lease may come as a relief.