Tricky Business

A dozen years ago, a few eyebrows would lift when Emily Gant told people what she did for a living. Even while attending her daughters’ soccer games with husband Denver, Gant would inevitably be asked about her job.

“Alcohol and cannabis attorney,” she’d reply.

“You defend DUIs?” they’d ask, puzzled. She would explain that, no, her role was to help cannabis companies comply with government regulations.

“Some were like, ’Dude, that’s so cool,’” Gant says. Others not so much.

That was in the early days after Washington became one of the first two states to legalize recreational marijuana. Although 22 other states have since followed suit—and 15 others allow medical cannabis use—marijuana is still a prohibited substance as far as federal law is concerned.

On a drizzly day, Gant is bundled up in a cable-knit sweater in her office at Foster Garvey in downtown Seattle. She speaks with candor, generously punctuating sentences with gestures; oversized glasses giving her an air of edgy confidence. It’s been a month since President Donald Trump was inaugurated, and Gant says she thinks he will leave the cannabis issue alone for the most part, as he did in his first term.
But she doesn’t ignore the elephant in the room.

“Any new administration creates uncertainty, and that’s especially true for this one,” Gant says. “In the last couple of weeks, we’ve seen things happen that I didn’t think would happen.”
Gant, who practices law related to alcoholic beverages, also sits at the cornerstone of Foster Garvey’s cannabis practice, which she’s chaired since 2015. She’s been shepherding cannabis entrepreneurs through the industry’s legislative maze since 2013. Gant keeps an open line between herself and members of the Washington State Liquor and Cannabis Board and helps clients with creative ideas navigate the legal process.

What sets Gant apart, says Diana Shukis, a principal and co-chair at Foster Garvey, is her ability to problem-solve without making anyone feel bad about themselves.

“Emily will use funny words and phrases that are disarming and make people laugh,” Shukis says. “In a meeting, if she says something that’s wrong, she’ll be like—‘Well, that’s a whoopsie-doodle!’ She’s a super-smart, high-powered lawyer, but she’s also a human.”

Tim Prochko is managing attorney for American General Counsel PLC in Rochester, Michigan. When his company became outside general counsel for a cannabis startup in Washington, he shopped around for an attorney with local knowledge, expertise and relationships to give him boots-on-the-ground support. Gant was recommended over and over again.

“Emily was so professional in a sea of people who are in cannabis—which can be an unconventional and less professional space,” he says. “She’s humble, too. … She’s very willing to share her knowledge.”

Growing up in Salem, Oregon, where her father, Jay Harris, worked as an insurance defense lawyer, Gant remembers hearing his war stories over the breakfast table—descriptions of car accidents, trials, expert witnesses, cross-examinations.

“He’s a very good storyteller; he distills facts well,” Gant says. “To a lot of folks, a job is a paycheck. But my dad loved being a lawyer.”

Her father also loves wine. At family gatherings, he’d pull special vintages from his wine cellar—to taste or to send along with a departing relative.

And when Gant’s mom, Mary Harris, would hand off child care for a weekend, her dad would pile Gant and her two younger brothers into the family’s Volkswagen van for a road trip. They’d head out to wineries in Oregon’s Willamette Valley. While their father was busy picking up his wine futures, the kids wandered around, petting people’s dogs and exploring.

While attending Whitman College in Walla Walla, Gant would pop into nearby wineries with her parents when they came to visit. In a light-bulb moment, she realized she loved wineries and wanted to do something involving wine in her future. But she’d been leaning toward teaching or the law.

Inspired by her father, Gant decided to go to law school at the University of Washington. “When you see someone so passionate about things,” she says, “it makes you say, ‘Hey, this may be a good path for me.’”
She kicked off her career as a general commercial litigator for Ogden Murphy Wallace in Seattle, where she says she had great mentors.

A few years in, she had a realization. “I could ‘hang’ on the writing, advocacy and client-counseling aspects of litigation. Those were good uses of my strengths,” Gant says. “Sometimes, though, litigation goes beyond merely adversarial into something more extreme. That’s just not my jam.

“I wanted to help people build things, which meant a pivot toward a transactional and regulatory practice,” she continues. “Rather than duking it out in a courtroom, I wanted to close deals that allowed my client to grow. It’s a better use of my talents and personality.”

A year or so later, a friend who worked in-house at a large Washington winery asked if Gant would help him with a big project researching alcoholic beverage marketing rules for various regulatory environments. She jumped at the chance. After that, Gant steered her practice more toward the alcohol beverage industry, which involved more transactional and regulatory work. Then Washington’s Initiative 502 passed.

“I’m kidding—but kind of not kidding—it looked like the writers of the initiative took the alcohol rules, did a control-C, and then swapped out every reference to ‘alcohol’ with ‘cannabis,’ and stripped out every exception that lobbyists have put in since Prohibition.” Gant says.

“I knew these rules, I knew these laws, I knew these regulators.”

Before she picked up cannabis clients, though, Gant asked colleagues at her firm how they felt about it.
“As you might expect, there was a divergence of viewpoints. There were some folks who saw the opportunity in it, and others whose pearls were clutched,” she says.

She helped them draw up safeguards to manage the risks, starting with the client engagement letter.
“I don’t work with clients who aren’t willing to operate within a compliance system,” Gant says. “If it looks like you’re knowingly violating state or federal law, then we are not the attorney for you.”

Gant switched to her current firm—called Garvey Schubert at the time—in order to focus on building an alcoholic beverage practice, and also to get in on the ground floor of the firm’s cannabis practice.
It’s an industry that’s had its challenges from the start. When Washington state officials asked the Obama administration whether merchants, consumers and public officials would get in trouble for complying with state law, federal officials said cannabis would not be an enforcement priority as long as the state kept it away from children, criminals, people who were driving, and federal lands.

“And so the state of Washington said, ‘Please’ and ‘Thank you, we will do this.’ And they went off to the races,” Gant says.

When Prochko’s firm took on a multistate client involved in the cannabis space a few years later, he relied on Foster Garvey—and on Gant in particular. In a heavily regulated industry, with varying rules from state to state, Gant became his emergency go-to when a client needed something done quickly and accurately, taking into account the local market factors.

“There were some tough issues that came up early on which were challenging and subject to tight deadlines,” he says. “That first year, nearly every time I called Emily, I’d apologize and say, ‘Hey, I’ve got another hot one for you.’”

But headwinds remain.

Banking continues to be a barrier. Any bank that’s FDIC-insured imperils its coverage if dollars from cannabis operations appear on its ledgers.

That’s why cannabis companies open checking accounts at state-chartered credit unions, which often aren’t FDIC-insured. For that privilege, the companies pay fees that are higher than normal. And, generally, even a credit union won’t approve loans for cannabis entrepreneurs, Gant says. To expand their businesses, they often need to turn to private investors.

Another barrier faced by cannabis companies is higher taxes, because the federal government disallows many of the deductions available to other companies. The rule goes back to the 1980s, when a California drug dealer claimed deductions for his operation—and IRS auditors discovered that actually wasn’t against the law.

“Congress was like, ‘Well, we should fix that,’” Gant says. So it sharply curtailed allowable federal tax deductions for all drugs labeled Schedule I and II, which includes cannabis.

One client thought of a possible workaround: forming an employee stock ownership plan, which would have exempted them from federal taxes altogether. Gant’s team analyzed the idea, pitched it, and met with the Washington State Liquor and Cannabis Board several times. But ultimately, the board decided her client would first have to get the statute changed.

“I still appreciated the board’s willingness to have a conversation,” Gant says. “Otherwise, people just roll the dice.”

So how did Gant vote on Initiative 502? No surprise there.

“I don’t think cannabis is the same as heroin or fentanyl,” Gant says. “I prefer to see it regulated and labeled, so a consumer knows what they’re putting in their body. It’s better than having it on the black market.”

Is the system perfect? No, she says.

“But the world hasn’t collapsed, either.”