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Marijuana: Hazy Laws for an ‘Essential Business’

Marijuana presents a challenging situation for employers around the country. Marijuana (cannabis) is illegal under federal law because it is classified as a Schedule 1 drug under the Controlled Substances Act of 1970.   This means Congress has determined that there is no medical value whatsoever for marijuana.  Yet a total of some 36 states legalized cannabis for medical purposes, and nearly half of those states have legalized marijuana for recreational use as well.  This has resulted in a patchwork scenario of multiple, and often conflicting, state laws which present a harrowing challenge for employers operating in multi-state jurisdictions.

Legislatures in several states over the past year have introduced laws to prevent employers from taking adverse action against employees who test positive for cannabis.  The details of the proposed legislation vary from state to state.  For example, the California Assembly Bill 1256 proposal is to prevent employers from discriminating in the hiring process against employees who test positive for THC.  Florida House Bill 1411 and Senate Bill 1820 prevent employers from taking negative action against employees enrolled in Florida’s medical marijuana program.  Massachusetts House Docket 3914 would bar employers from refusing to hire or terminate an employee because of a positive blood or urine test showing THC unless there is evidence objectively demonstrable that the employee is impaired at work.  New Jersey, on the other hand, introduced New Jersey Senate Bill 3525 to amend the current adult-use law to allow management in certain safety-sensitive sectors, such as construction, infrastructure or law enforcement, to ban the use of recreational marijuana on the employees’ personal time.

Ohio enacted a medical marijuana law that became effective in 2016.  Ohio’s law is unique because it is relatively restrictive in how and when an individual may use medical marijuana.  Further, the law in Ohio allows employers to terminate an employee who tests positive for marijuana.  In other words, Ohio employers are entitled to a “drug-free workplace” and a zero-tolerance policy. Ohio’s medical marijuana law explicitly denies the right of employees to use medical marijuana against the employer’s drug policy.  Also, medical marijuana is not covered under Ohio’s workers’ compensation insurance program because the drug is illegal under the Controlled Substances Act.  However, recent court decisions from states other than Ohio offer conflicting views on reimbursing injured workers for medical marijuana.  A New York appellate court and the New Hampshire Supreme Court recently ruled that medical marijuana is reimbursable in workers’ compensation cases.  The New York and New Hampshire courts found that the federal Controlled Substances Act does not preempt payment for medical marijuana treatment.  In both cases, injured workers with chronic pain had been prescribed therapeutic cannabis and sought coverage as part of the “necessary and reasonable” workers’ compensation claims expenses.

And recently we witnessed cannabis businesses being declared “essential services” during the COVID-19 pandemic.  This ironic situation places cannabis dispensaries and growers, which are illegal under federal law, on par with essential services such as grocery stores, pharmacies and gas stations during the COVID-19 government declared lockdowns.

The issue of cannabis and employment policies will continue to percolate in the future.  We will monitor the situation and provide periodic updates and insights.  Please contact a member of our Labor & Employment Section with further questions or comments.

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