March 11, 2021
Digest: Where a publicly traded company’s sole purpose is the sale of medicinal and recreational marijuana and other cannabis-related products, a judge may not invest in the company if it is operating in the United States in violation of federal law.
Rules: 22 NYCRR 100.2; 100.2(A); 100.2(C); 100.3(B)(1); Opinions 18-169; 18-163.
A full-time judge asks if it is ethically permissible to purchase shares of stock in a foreign corporation publicly traded on the New York Stock Exchange, “whose sole purpose is the sale of medicinal and recreation[al] marijuana as well as other cannabis related products.” We understand the entity is incorporated in another country, where sale and use of marijuana is lawful.
A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act in a manner that promotes public confidence in the judiciary’s integrity and impartiality (see 22 NYCR 100.2[A]). Judges must “respect and comply with the law” (id.) and “be faithful to the law” (22 NYCRR 100.3[B]), and must not lend the prestige of judicial office to advance any private interest (see 22 NYCRR 100.2[C]).
In Opinion 18-169, we said a full-time judge could be a minority shareholder in a company engaged in brokering sales of state-licensed marijuana dispensaries, provided the judge was a “purely passive investor.” We expressly noted that the proposed company would not be engaged in buying or selling marijuana, and acknowledged the “current geographically limited or ‘patchwork’ legalization of marijuana” (id. [quoting Opinion 18-163]). Indeed, while many states allow marijuana use in some form, “it remains unlawful on the federal level” (Opinion 18-163).
Here, unlike Opinion 18-169, the foreign company in which the judge wishes to invest has as its “sole purpose” the sale of marijuana. As judges must “respect and comply with the law” (22 NYCRR 100.2[A]) and be “faithful to the law” (22 NYCRR 100.3[B]), we conclude a judge may not invest in the company if it is operating in the United States in violation of federal law.