Up In Smoke?: CCRD Takes Stance Contrary To HUD and Clouds the Issue on Medical Marijuana

Hopkins Tschetter Sulzer recommends three possible medical marijuana policies.  The first policy camp is prohibition.  Marijuana use is prohibited even if the resident possesses a medical marijuana card or makes a reasonable accommodation request.  The prohibition policy is legally defensible because marijuana use or possession is a felony under the federal Controlled Substances Act (“CSA”).  The second policy camp is to prohibit medical marijuana use based on a medical marijuana card, but to consider making an exception to the policy, if the resident makes and meets the requirements for a reasonable accommodation under fair housing laws.  The third policy camp is to allow any resident with a valid medical marijuana card to use medical marijuana.

All three medical marijuana policies are legally defensible.  These three legally defensible medical marijuana policy alternatives emerged because of and in an effort to address the clear conflict between federal and state marijuana laws.  Under the Colorado Constitution medical marijuana use is legal.  Under federal law, the use of medical marijuana is not recognized and remains illegal.  Legal analysis of policy alternatives becomes even more complicated when state and federal fair housing laws are considered.  Specifically, the federal law prohibiting medical marijuana is in direct conflict with Colorado fair housing laws regarding reasonable accommodation requests, and arguably is also in conflict with federal fair housing laws regarding reasonable accommodation requests.

Because of the federal/state conflict, no perfect or legally risk free medical marijuana policy exists.  In analyzing medical marijuana policy options, we reviewed and gave consideration to the stated intent of federal and Colorado agencies regarding medical marijuana related issues.  The federal viewpoint clearly supports a prohibition policy.  However, one of the potential disadvantages of a medical marijuana prohibition policy is that a Colorado state court or administrative agency could hold that Colorado state law controls medical marijuana issues.  Because medical marijuana is a constitutional right in Colorado and Colorado recognizes the right of disabled residents to make reasonable accommodation requests under Colorado fair housing laws, this potential development was not totally unforeseeable.  Our anticipation of this possibility is a driving force behind the development of policy camp two (treat medical marijuana requests as requests for reasonable accommodations).

On the federal level, the U.S. Department of Housing and Urban Development (“HUD”) enforces the federal Fair Housing Act Amended, Title II of the Americans with Disabilities Act, and § 504 of the Rehabilitation Act of 1973.  HUD has repeatedly published its viewpoint on medical marijuana via an internal Memorandum made public.  On January 20, 2011, HUD again issued another memo regarding medical marijuana and reasonable accommodations in federal public and assisted housing.  HUD’s memorandum serves as a guideline for all housing providers that are either Housing Authorities or who receive federal assistance.  HUD’s position is clear.  HUD concludes that the CSA prohibits marijuana use, even for medical purposes, to lessen the effects of a disability.  Thus, HUD is against housing providers granting reasonable accommodation requests related to medical marijuana, even in states like Colorado that have a Constitution that allows medical marijuana.  HUD’s guidelines clearly follow Camp 1 (total prohibition of medical marijuana).

On the state level, the Colorado Civil Rights Division (“CCRD”) enforces Colorado’s Fair Housing Act, and works in connection with HUD to enforce the federal laws mentioned above.  Pursuant to federal statute (federal fair housing laws), HUD can and does enter into arrangements with state agencies to process, investigate, and prosecute fair housing complaints filed with  HUD.  Simply put, HUD is CCRD’s boss with respect to fair housing claims brought under federal law and processed by the CCRD.

Despite this fact, the CCRD has taken a position contrary to HUD on the topic of medical marijuana.  The possibility of Colorado articulating a legal position directly contrary to federal law and HUD’s published memorandum on medical marijuana is now a reality.  The CCRD’s probable cause finding in a medical marijuana case concerns a 2010 fair housing complaint processed by the CCRD.  Specifically, in December of 2010, CCRD found the housing provider discriminated against a tenant on the basis of disability by refusing to consider a request for a reasonable accommodation based on the use and growth of medical marijuana.

Interestingly, the housing provider in this case is a Housing Authority.  Based on its finding that probable cause exists that the housing provider discriminated against the disabled resident, the Colorado Attorney General’s office has filed an administrative lawsuit against this Housing Authority.  The Housing Authority now faces substantial legal exposure, and most likely tens of thousands of dollars in additional legal bills.

In this CCRD case, the Housing Authority owns and operates housing subsidized by HUD.  The Housing Authority terminated a tenant’s Section 8 voucher for  the use and growth of marijuana and did not engage in an interactive dialog to address the resident’s reasonable accommodation request.  Under both the HUD/DOJ reasonable accommodation guidelines, and Colorado law, a housing provider must respond to a resident’s reasonable accommodation request, and engage in an interactive dialog process to satisfactorily resolve a resident’s reasonable accommodation request.

Because the CCRD found the housing provider’s actions to be discriminatory, the CCRD has taken a position directly contrary to HUD in this case. We have it on good authority that HUD is not happy. However, given the conflict in the law, the CCRD’s position is not without significant legal support.  The CCRD’s findings further cloud an already hazy issue.  Some firm clients fall under the purview and direction of the 2011 HUD memo (medical marijuana is prohibited) .  Yet, CCRD has made it clear, at least for the time being, that landlords should consider reasonable accommodation requests for medical marijuana in certain circumstances. Thus, it appears CCRD has adopted a Camp 2 policy (treat medical marijuana requests as requests for reasonable accommodations).

As with any fair housing discrimination complaint where the CCRD finds probable cause, the matter may be far from over.  The Housing Authority has the option to remove the case to state Court.  If the Housing Authority fails to exercise this option, an administrative law judge will determine whether the Housing Authority discriminated against the resident in violation of fair housing laws.  If the Housing Authority removes the case to state court, a Colorado District Court will determine the outcome.  The case may not be concluded for years, as one or both parties exercise various legal rights, including the right to appeal.  Additionally, just like any other housing discrimination complaint filed with the CCRD, the resident involved has the right at any time to open an entirely new legal front by filing a civil lawsuit against the housing provider.  In the end, unless state and federal laws are reconciled, only time will resolve this controversial and fascinating case.

Even prior to the CCRD’s recent ruling, we urged our clients to evaluate and adopt an appropriate medical marijuana policy.  The knee jerk reaction to the CCRD’s ruling might be for everyone to rush into policy camp two (medical marijuana requests should be treated as requests for reasonable accommodations). However, this policy may not be appropriate for every community, especially for federally subsidized housing providers.

Similarly, many housing providers total reliance on the CSA to prohibit medical marijuana may be misplaced.  The CSA is a law from the early 1970’s, designed to curb drug trafficking.  The Colorado law concerning medical marijuana, on the other hand, is a State Constitutional amendment intended to address medical (disability) concerns.  As evidenced by its finding, the CCRD places great significance on the intent of Colorado medical marijuana law.  So, what is a housing provider to do now that the CCRD (state) and HUD (federal) are now at loggerheads?

You should start with whether you receive federal funds or are considered a federally subsidized housing provider.  For those housing providers who truly fall under HUD’s purview, the less risky course of action is to adhere to HUD’s memo (Camp 1 – total prohibition).  Based on the CCRD’s recent ruling, you do run the risk of a CCRD complaint, and probable cause finding.  Because Legal Aid primarily represents residents who reside at subsidized housing communities, this is not an unsubstantial risk.  However, a HUD investigation and termination of the property’s subsidy outweighs these risks.

If your community is a conventional property, receiving no federal assistance, we recommend adopting a policy that follows Camp 2 (treat medical marijuana requests as requests for reasonable accommodations).  Taking section 8 vouchers does not mean your community is the recipient of federal funds.  Some tax credit communities receive federal assistance, and some do not.  Tax Credit properties need to take an especially hard look at this issue, and make sure they are confident that as to their federal funds recipient status.  Conventional communities could also adopt a Camp 3 policy (residents with medical marijuana cards are allowed to use medical marijuana regardless of whether the resident would qualify under reasonable accommodation analysis).  As discussed in our previous Medical Marijuana article, a Camp 3 policy, like any other policy camp, has its own advantages and disadvantage.

We draft medical marijuana policies for our clients on an hourly fee basis.  If you want us to draft your policies, you will first need to determine which policy camp your community will follow.  Once you have made the decision, we can assist you in drafting an appropriate policy.  The policy can take the form of an internal memorandum given to staff, and may include adjustments to lease documents so that they accurately track your community’s policies.  However, an addendum may trigger unintended or unwanted consequences.  For example, if you have a Camp 2 policy, once the word gets out, you might be flooded with requests for reasonable accommodations from residents (with or without medical marijuana registry cards) who otherwise would not have raised the issue.  Accordingly, even after you decide on a policy, you will need to evaluate additional considerations in drafting and carrying out your community’s medical marijuana policy.

A well thought out and drafted medical marijuana policy has many advantages.  Currently, clients are flooding the situation board with countless medical marijuana “situations”.  Many onsite teams are confused and lack direction because the community has no policy.  A policy will eliminate confusion and standardize procedures, and most importantly lease enforcement protocol.  Depending on your policy, the onsite teams will know whether to lower the boom (Camp 1), engage in the reasonable accommodation process (Camp 2), or get the resident on a medical marijuana addendum (Camp 3).  A well defined policy will also address other commonly related issues.  For example, complaints from other residents about marijuana smoke and marijuana growing are common issues associated with medical marijuana use.

Similar to any other rental housing issue, the firm stands ready to meet your medical marijuana policy needs.  For further information or to discuss your specific medical marijuana policy needs, please contact partner Wes Wollenweber who heads up the firm’s medical marijuana policy development.

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