Legal Insider: Stay clear of Investments in Cannabis Firms and Security Clearances

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor regulation firm situated in Northern Virginia that specializes in federal worker, safety clearance, retirement and personal sector staff issues.

By John V. Berry, Esq.

Keeping or applying for a safety clearance and preserving important investments in cannabis businesses can be a challenge. We have been advising clients about this situation since some states commenced to legalize cannabis about 2010. Owning an investment decision in a marijuana company (e.g., stock, equity) (or operating for a cannabis business) is a reportable clearance action for security clearance holders and applicants and can direct to the decline of a safety clearance or complications in getting a person. Investments in cannabis-linked providers may perhaps constitute involvement in illegal drug activities underneath existing government guidelines.

This can perhaps be the situation even in which the clearance holder or applicant does not directly pick their particular person stocks. It also helps make no variation if the state that the investment is found in has legalized cannabis corporations. The federal government’s latest see is that an particular person has a obligation to know about their investments and to be knowledgeable about federal drug guidelines.

Federal Directives on Cannabis Usage and Financial investment

When there has not been new important direction in the space of financial investment, Stability Executive Agent Directive (SEAD) 4, productive June of 2017, delivers the present basis for not granting or revoking a stability clearance based mostly on drug involvement, including investments in cannabis below Guideline H:

25. Conditions that could raise a safety concern and may possibly be disqualifying incorporate:

. . .

(c) illegal possession of a controlled compound, which include cultivation, processing, manufacture, acquire, sale, or distribution or possession of drug paraphernalia

. . . .

If an concern were to arise, an investment decision in cannabis firms could feasibly drop less than a variety of the security considerations in Paragraph 25 (c) of SEAD 4.

Cannabis investments have been referred to as the new Tesla or other expansion industry, in accordance to the information the urge is to commit now. On the other hand, the trouble is that till the federal federal government modifications federal drug guidelines or results in an exception for cannabis businesses or investment, individuals that invest or in any other case develop into included in cannabis investments can set their protection clearance (and job) in danger. Although investments in cannabis enterprises are possible fewer of a red flag than utilization of cannabis for a clearance holder, the finest advice is to keep away from cannabis investments.

We have continued to see sizeable confusion on this concern due to the fact 2010 when a variety of states started legalizing the use of marijuana. It is advisable that people seeking to keep or to acquire a stability clearance refrain from investing in marijuana shares until federal regulation or policy improvements. Hunting at the present-day standards, the major danger is possible knowing that you are investing immediately in a marijuana enterprise (or direct possession), as opposed to investing in a mutual fund in which a person may well be unaware of these investments. The federal authorities will at some point modify their position on marijuana, but for the second investing in organizations or shares that are associated in the sale of marijuana could lead to safety clearance issues.

Summary

If an employee wants help with security clearance troubles, you should contact our office environment at 703-668-0070 or go to our internet site to agenda a session. You should also like us on Facebook or hook up with us on Twitter.