By John V. Berry, Esq., www.berrylegal.com
If you are a security clearance holder and you own or work in the ever-growing marijuana industry, you could have difficulties obtaining or keeping a security clearance. We have been counseling clients about this issue since at least 2010. This article discusses the current federal government view on investments in the marijuana industry at present.
This same consideration applies to individuals that work part-time or are otherwise involved in marijuana-related businesses. Owning an investment in a marijuana company (e.g. stock) or working for a marijuana enterprise is a reportable clearance activity for security clearance holders and applicants and can lead to the loss of a security clearance or in one obtaining a clearance. The current marijuana policy comes from the Director of National Intelligence (DNI), by way of an October 2014 memorandum which explains current government policy.
Investments in marijuana-related companies can constitute involvement in illegal drug activities. This can be the case even where the individual does not directly choose their individual stocks and even in states where marijuana businesses are completely legal. There will be varying degrees of differing factual circumstances on a case-by-case basis. The federal government’s current view is that an individual has a duty to know about their investments and to be knowledgeable about federal drug laws.
2014 Memorandum and Other Federal Directives
The 2014 memorandum is not alone. Security Executive Agent Directive (SEAD) 4 issued in June of 2017 provides the current basis for not granting or revoking a security clearance based on drug involvement, including investments in marijuana under Guideline H:
- Conditions that could raise a security concern and may be disqualifying include:
. . .
(c) illegal possession of a controlled substance, including cultivation, processing, manufacture, purchase, sale, or distribution; or possession of drug paraphernalia;
. . . .
Marijuana stocks have been heralded as the new Apple stock, according to the news; the urge is to get in on the ground floor for investors. However, the problem is that until the federal government changes federal drug laws or creates a caveat for marijuana businesses, individuals that invest or otherwise become involved in marijuana investments can put their security clearance (and career) in danger. Even high-profile businessman can lose their security clearance over such issues. One only has to look at the recent news regarding Elon Musk allegedly smoking marijuana on video to start a review of his clearance by the government.
We have also seen a lot of confusion on this issue since at least 2010 when a number of states started legalizing the use of marijuana. We have represented many clearance holders and applicants who have traveled to Colorado or elsewhere, where marijuana is legal, to simply try it. In some of these cases, the experimentation has cost the individual their security clearance.
It is advisable that individuals seeking to hold or obtain a security clearance refrain from investing in marijuana stocks until federal law or policy changes. Eventually, we believe that the federal government will change their position on this issue to an abuse standard, like alcohol usage, but for the moment investing in companies or stocks that are involved in the dispensing of marijuana can cause one to lose a security clearance.
If you are in need of security clearance representation, please contact our office at 703-668-0070 or through our contact page to schedule a consultation. Please also visit and like us on Facebook or Twitter.