As Massachusetts goes green—the commonwealth legalized marijuana for recreational use in November—at least one big, Boston-based firm is getting into the budding industry.
Foley Hoag confirmed this week the formation of a new practice group led by energy, cleantech and state attorney general practice co-chair Kevin Conroy focusing on the regulatory issues facing companies looking to capitalize in the growing legalized cannabis market.
Massachusetts voters approved a ballot measure late last year making it the latest state to legalize recreational marijuana use. Shortly thereafter, Conroy was approached by an associate at Foley Hoag about the possibility of developing a practice dedicated to helping entities looking to get marijuana licenses navigate the regulatory process in Massachusetts.
“Based on that suggestion, we did about two-to-three months of due diligence, where we spoke to a number of firms that are our size in the state of Washington, Oregon and Colorado to determine whether there was a market for large firms to represent this industry on regulatory issues on the state level,” Conroy said. “And we determined that there is.”
The American Lawyer reported last year on several big firms getting into the sector, including Orrick, Herrington & Sutcliffe’s partnership with a pro-pot nonprofit group and Florida-based Am Law 200 firm Greenspoon Marder taking its cannabis practice nationwide.
Conroy, who joined Foley Hoag in 1999, left the Boston-based firm in 2005 to serve as chief of staff and general counsel of the New England Council and then, two years later, joined the Massachusetts Attorney General’s Office as a deputy attorney general in charge of health care and energy activities. He re-joined Foley Hoag in early 2012 as a partner in its regulatory and government investigations practice.
“We understand politics [and] regulation in Massachusetts, and we follow these issues pretty closely so it was a natural practice for us to jump into,” Conroy said.
Foley Hoag’s cannabis practice group consists of six lawyers—three regulatory specialists and attorneys focusing on corporate, labor and employment and trademark law—and already has close to 10 clients, some of whom had already been working with the firm on corporate business formation and trademark issues.
“It turned out that we had a good base of marijuana-related clients,” Conroy said.
While marijuana remains illegal under federal law, the legalization of the product in state after state has created a new industry worth roughly $5.7 billion and a boom for legal services. Fox Rothschild opened a Chicago office in 2015 with four lawyers brought on from Nixon Peabody to represent some of Illinois’ newly-licensed medical marijuana cultivators, while three Polinselli partners that left the firm’s Chicago office in 2015 to start their own cannabis company have already expanded to New York.
While Conroy is not yet certain how the addition of the cannabis practice will affect the firm’s gross revenue in the coming year, he said that the firm determined that this was a good area to invest firm resources and that it sees the potential to counsel not only locally-based companies but national corporations in the legalized marijuana industry.
“One of the reasons we’re excited about this practice is that we’re going to see a number of national companies who have licenses in other states are going to come to Massachusetts,” said Conroy (pictured right). “We’ve got a handful of clients now and we’d love to see some considerable growth.”
Whether that growth is still possible under the Trump administration is up for debate.
In his confirmation hearings on Capitol Hill last month, U.S. Attorney General Jeff Sessions did not definitively state what position he would direct the U.S. Department of Justice to take on certain states’ legalization of marijuana.
“This is an uncertain time for nearly every industry in the U.S. The president is making a fair number of changes and thinking about a fair number of changes and lot of industries are unsettled,” Conroy said. “The marijuana industry is no different in the sense that they perceive hostility from this administration.”
Sessions, who has been opposed to the marijuana’s legalization, did however state that enforcing the federal law could create a strain on the government’s resources, which gives Conroy reason for optimism.
“In his testimony, [he] at least indicated that his priority was not to go after companies in states where the state law allowed for recreation marijuana, so I was heartened by that,” he said.