Introduction
The past few years have brought a dizzying flurry of state legislation aimed at decriminalizing and legalizing cannabis, popularly known as marijuana. Across the country, states are legalizing marijuana for medical and/or recreational purposes. At press time for the 2024 edition of this manual, 49 states; the District of Columbia; and the territories of Puerto Rico, Northern Mariana Islands, Virgin Islands, and Guam lawfully permit some form of cannabis for use at least in medical treatment.
However, the production, sale, distribution, and use of marijuana remains illegal under federal law. This creates friction between federal and state laws, including laws on employees’ disability, discrimination, and workplace injury protections. Additional protections beyond the federal employment rights laws have historically been available in some states, but as states legalize marijuana for medicinal or recreational use, they are taking vastly different approaches leading to a substantial challenge for corporations that operate in more than one state.
No two state laws are the same with respect to what constitutes lawful use of cannabis products and what protections are afforded to employees who consume cannabis products. For example, while some states explicitly state that an employer is not required to accommodate the use of medical marijuana, others provide affirmative protection for workers who lawfully use medical or adult-use marijuana. In addition, at the time of this article, 23 states, the District of Columbia, Northern Mariana Islands, and Guam have legalized adult-use marijuana. It is expected this number will continue to increase, creating additional concerns for employers who seek to balance a drug-free work environment with the rights of their employees to receive recommended medical treatment or engage in lawful adult-use consumption.
This article provides a basic overview of the various laws in operation and the dynamic challenge they create for employers and their compliance and ethics programs. Also, it seeks to empower compliance professionals to guide their employers on their obligations to manage risks arising from this area of the law. Given this ever- shifting legal landscape and how rapidly the law is developing, it is important to use this article only as an informative background guide, and before taking any employment action, it is critical to consult the state laws in which your company operates, refer to the applicable federal laws, and/or reach out to in-house or qualified outside counsel.
Cannabis Basics
Marijuana is the term often used to describe the substances made from portions of the Cannabis sativa L. plant. The principal psychoactive ingredient of cannabis is tetrahydrocannabinol, which is more commonly referred to as THC. THC is the chemical compound that creates the “high” that is historically associated with marijuana. Cannabis products that are THC-dominant are particularly effective for pain, nausea, depression, anxiety, and insomnia.
Cannabidiol (can-na-buh-DIE-ohl) or CBD is another component of the cannabis plant. It is considered nonpsychoactive. CBD-dominant products have been shown to have medicinal value for a variety of medical ailments and diagnoses, such as inflammation, seizures, and anxiety. CBD consumers rarely experience any psychoactive effect.
The passage of the Agricultural Improvement Act of 2018 (the 2018 farm bill) has created much discussion of hemp. Hemp is also the Cannabis sativa L. plant; however, hemp has been bred to be a strain that has only trace amounts of THC. Specifically, hemp is cannabis with less than 0.3% THC by dry weight volume. CBD can be derived from hemp or marijuana plants and may or may not contain THC.
Complicating matters even further, two FDA-approved prescription medications are derived from the cannabis plant. MarinolⓇ contains THC and is used for treating nausea. EpidiolexⓇ is CBD-dominant and used to treat seizure disorders. Thus, a urinalysis positive for THC metabolite may have been caused by legal consumption of a prescription medication, state-legal consumption of a THC product, legal use of a CBD product containing THC, unknowing consumption of THC through a CBD product believed to be free of THC, or illegal consumption of marijuana. Urinalysis results are not helpful in determining which of these scenarios an employer faces.
It is also helpful to address commonly used terminology surrounding cannabis laws. First, the term “consume” is the industry-preferred term over “use,” because in common parlance, an individual is said to “use” illegal drugs. The term “consume” distinguishes lawful methods of marijuana consumption from the stigma associated with drug use. In addition to the most commonly known form of consumption—smoking—an individual can consume cannabis products via edibles (e.g., candy, baked goods, sauces), in liquid form (e.g., oils, tinctures, beverages), in wax form (“butter” or “dabbing”), pills or capsules, and by vaporized delivery (commonly known as “vaping”). The method of consumption may vary based on the patient’s needs and the conditions for which the cannabis product is consumed or based on the consumer’s preferences.
There is also some argument that the term “cannabis” is preferred to the term “marijuana” because cannabis products include, but are not limited to, marijuana products. For example, CBD oil is a cannabis product, but if it has no THC, it is not a marijuana product. Because so many state laws refer to “marijuana,” this article will use the term “marijuana” when referring to products that include THC and “cannabis” to include marijuana, hemp, and CBD-based products.
There has also been recent discussion regarding the term “recreational marijuana” as opposed to “adult-use marijuana.” Obviously, we do not refer to alcohol or tobacco as adult-use alcohol or tobacco. Some states have used the term “adult-use” instead of “recreational,” however, this reverts to the word “use” instead of “consumption.” Although both terms have been referenced in state legislation, the industry-preferred term is “adult-use” over “recreational.”
The Status of Federal Law
Controlled Substances Act
It is the federal Controlled Substances Act (CSA) that makes marijuana and its derivatives illegal. More specifically, the CSA classifies marijuana as a Schedule I controlled substance, which means it has been deemed to have a high potential for abuse and dependency, with no recognized medical use or value. Accordingly, the CSA provides that the growth, distribution, use, and possession of marijuana is criminal and can be prosecuted under federal law. Although efforts for action at the federal level have multiplied and steadily accelerated, until there is a major change in federal law, the continued friction between state and federal law will continue to pose challenges for employers.
Despite the CSA, states have kept up a stunning momentum on decriminalization and legalization of cannabis for both medicinal and recreational purposes. Below is a detailed analysis of the state laws legalizing various forms of cannabis, which are at odds with the CSA. Given that states have been legalizing medical marijuana since the 1990s, the United States Supreme Court already had an opportunity to put to rest any doubt as to whether federal law reigns supreme on the issue. In 2005, the Gonzales v. Raich decision[2] made clear that in accordance with the Commerce Clause and Supremacy Clause, the CSA trumps state law for purposes of federal criminal prosecutions. That is, even if the use of marijuana is legal under state law, an individual cannot be spared from federal prosecution on such grounds.
As such, memoranda issued in October 2009[3] and June 2011[4] by the U.S. Department of Justice (DOJ) represented former administrations’ enforcement stance. The initial memorandum was known as the Ogden Memo. First, the Ogden Memo made clear that the DOJ “is committed to the enforcement of the Controlled Substances Act in all States,” particularly those that “have enacted laws authorizing the medical use of marijuana.” However, DOJ noted it would be “making efficient and rational use of its limited investigative and prosecutorial resources.” Accordingly, the memorandum outlined that DOJ’s core priorities would be to pursue the prosecution of “significant traffickers of illegal drugs, including marijuana, and the disruption of illegal drug manufacturing and trafficking networks” and to leave alone “individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.” DOJ noted it would rely on local authorities to regulate and enforce state laws authorizing medical marijuana activity.
In August 2013, after Colorado and Washington enacted laws authorizing the recreational use of marijuana, DOJ issued another memorandum to provide guidance concerning marijuana enforcement under the CSA.[5] This was known as the Cole Memo.[6] Once again, it noted that while marijuana remains illegal under federal law, the federal government would continue to rely on state and local law enforcement agencies to address marijuana activity in accordance with their own state laws and it would step “in to enforce the CSA only when the use, possession, cultivation, or distribution of marijuana has threatened to cause one of the [eight] harms” that it has delineated as enforcement priorities important to the federal government (e.g., preventing the distribution of marijuana to minors; preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; preventing the diversion of marijuana from states where it is legal under state law in some form to other states; preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity).
DOJ warned that its deference to state and local authorities is based upon its expectation that state laws “authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health, and other law enforcement interests.” Therefore, if it were determined that a state or various states did not live up to such expectations, the DOJ would consider reversing course.
The U.S. House of Representatives boosted the effect of the Ogden and Cole memos by passing the Rohrabacher– Farr amendment in May 2014.[7] That act prohibited DOJ from expending any funds for enforcement of laws in states where marijuana was becoming legal for medical purposes. The amendment was renewed on an annual basis. It is now known as the Rohrabacher–Blumenauer amendment. In 2021, President Joe Biden was the first president to include the Rohrabacher-Blumenauer amendment in his proposed budget.
The Rohrabacher–Blumenauer amendment is now the only federal initiative protecting states in which medical marijuana has been legalized. In January 2018, the U.S. Attorney General rescinded the Ogden and Cole memoranda, causing alarm across the nation. DOJ did not announce any replacement policy for the rescinded policies; however, DOJ is constrained by the Rohrabacher–Blumenauer amendment and for the time being cannot expend funds to pursue prosecutions related to state-legalized medical marijuana production, sale, or consumption.
Although DOJ has not replaced the Ogden and Cole memos with any announced policy, the Biden administration has largely been hands-off, having taken a slightly more liberal approach to legalization efforts than previous administrations. The Biden administration has deferred to states for regulation and enforcement even while recognizing the need for federal regulation, especially for banking purposes. DOJ has not expressed an intent to abandon enforcement efforts directed at cannabis enterprises not authorized under state laws. While this does not inoculate state-legalized cannabis businesses, this policy approach coupled with the Rohrabacher–Blumenauer amendment brings some comfort to compliant, state-licensed cannabis operations.
Federal Employment Laws Implicated in Legalization of Cannabis
In addition to the CSA, when assessing the presence of marijuana in the workplace and an employer’s obligations to its workforce, there are other federal laws that are at issue, including the Americans with Disabilities Act, Family and Medical Leave Act, Drug Free Workplace Act, Federal Acquisition Regulations, Occupational Safety and Health Administration regulations, Federal Aviation Administration regulations, Department of Transportation regulations, Transportation Security Administration regulations, and the National Industrial Security Program for workplaces that have employees with security clearances. These laws can have an expansive effect on employees’ and employers’ rights.
The Americans with Disabilities Act
The Americans with Disabilities Act,[8] as amended (ADA), was enacted to ensure that qualified individuals with disabilities have equal access to employment opportunities. Generally, the ADA provides protection from discrimination to persons with disabilities, persons with a record of impairment, and persons that are merely regarded as having a disability even if they do not have one.
Under the ADA, an employer is obligated to make a reasonable accommodation for applicants and employees with a disability or record of impairment. In assessing the reasonable accommodations available, an employer and employee must engage in an “interactive process,” in good faith. The ADA also protects the privacy of applicants and employees and restricts medical inquiries at various stages of the employment relationship.
Given the foregoing, when an applicant or employee is deemed to have used or is using marijuana, an employer must examine the scope of their responsibilities under the ADA.
First, the ADA explicitly states that an employer:
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May prohibit the illegal use of drugs at the workplace by all employees;
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May require that employees shall not engage in the illegal use of drugs at the workplace; and
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May require that employees comply with the standards established in regulations proffered by the Department of Defense, Department of Transportation, and the Nuclear Regulatory Commission.
The Equal Employment Opportunity Commission (EEOC) has issued regulations on the ADA, which are intended to provide additional guidance to employers on disability issues. The regulations define the “illegal use of drugs to mean the use, possession, and distribution of drugs that are unlawful under the CSA. Therefore, because marijuana is unlawful under the CSA, it is deemed an illegal drug under the ADA. This means that federal law permits employers to prohibit the consumption of marijuana in the workplace.
Further, as a general matter, to be covered under the ADA, a plaintiff must demonstrate they are a “qualified individual with a disability.” The ADA specifically provides that “a qualified individual with a disability shall not include any employee or applicant who is currently engaging in the illegal use of drugs, when the covered entity acts on the basis of such use.”[9] As set forth above, because marijuana is an illegal drug under the EEOC regulations interpreting the ADA, an individual determined to be currently consuming marijuana is not protected under the ADA. Accordingly, an employer may discipline or terminate an employee or refuse to hire an applicant under federal law on that basis.
The use of the word “currently” is critical, because in certain circumstances, prior use of marijuana may mean the individual is protected under the ADA. The EEOC regulations provide that the “term ‘currently engaging’ is not intended to be limited to the use of drugs on the day of, or within a matter of days or weeks before, the employment action in question. Rather, the provision is intended to apply to the illegal use of drugs that has occurred recently enough to indicate that the individual is actively engaged in such conduct.” This is not helpful language, as it does not provide even an arguably bright-line rule as to what constitutes current use versus prior use. Obviously, an individual could have engaged in conduct a decade prior, and no reasonable juror would make a factual finding that the plaintiff was currently using a substance. If you ask yourself if you currently drink alcohol, you may answer, “not at the moment,” but if you had wine last night, you may agree that you currently use alcohol. However, if you have not had an alcoholic beverage in 6 to 12 months, you may reasonably answer, “not currently.” This is a factual determination.
Under the ADA, the following individuals are protected under the ADA:
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An individual who has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in the use of illegal drugs;
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An individual who is participating in a supervised rehabilitation program and is no longer engaging in the use of illegal drugs; or,
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An individual who is erroneously regarded as engaging in [illegal drug] use, but is not engaging in such use.
With regard to the first two bullet points, the EEOC regulations state that an employer is entitled to “seek reasonable assurances” from an employee or applicant, including requiring the individual to provide “evidence that the individual is participating in a drug treatment program and/or evidence, such as drug test results, to show that the individual is not currently engaging in the illegal use of drugs.” Do note that there are landmines in making these additional inquiries, and therefore, any conversations or requests for additional information should be thoroughly vetted by legal counsel to ensure compliance with all state and federal laws. Put another way, just because the ADA permits this additional inquiry, does not mean that state laws would allow an employer to do so. State laws are discussed in the next section.
Finally, often an individual’s use of marijuana is detected through a drug test. While the ADA does provide restrictions around medical examinations, “a test to determine the illegal use of drugs shall not be considered a medical examination.”[10] This is quite an important distinction, and therefore, under the ADA, an employer may conduct a drug test for marijuana at any point in time of the employment life cycle (e.g., pre-conditional offer of employment, during employment), so long as it is done on a nondiscriminatory basis. That said, various states have laws governing, restricting, and providing mandates as to when, how, and in what manner drug tests may be conducted.
In addition, collective bargaining agreements under the National Labor Relations Act, as well as provisions of the Fair Credit Reporting Act, may be implicated when testing for the illegal use of drugs. So, while the ADA provides leeway on this issue, it does not mean that an employer can simply move forward without assessing other laws.
Family and Medical Leave Act
The Family and Medical Leave Act (FMLA)[11] provides eligible employees of covered employers to take unpaid, job-protected leave for up to 12 workweeks (in a 12-month period) for specified family and medical reasons with continuation of group health insurance covered under the same terms and conditions as if the employee had not taken leave. Family and medical leave may be taken by an employee for one of six reasons, including due to a serious health condition of the employee that prevents the employee from performing the essential functions of their job.
In some cases, an employee’s doctor may recommend or prescribe consumption of cannabis as part of treatment for the condition that gave rise to the FMLA leave. Depending on the medical condition, the period of leave, and the status of any physician’s recommendation, such consumption by an employee may be protected by state law. Employers should tread lightly in this area and always seek legal counsel before disciplining, terminating, or taking any other adverse action against a medical marijuana patient for exercising their rights under the FMLA.
Drug-Free Workplace Act
The Drug-Free Workplace Act (DFWA)[12] requires some federal contractors and all recipients of federal grants to agree that they will provide drug-free workplaces as a precondition to receiving a contract or grant from a federal agency. The DFWA applies to federal contractors who have contracted with a federal agency for the provision of services, not goods, in excess of the simplified acquisition threshold. As of September 2023,[13] the standard threshold was $250,000. The exception is for companies employing only one individual. If you are a company of no more than one employee, no matter the size of the acquisition, you are subject to the DFWA. Comparatively, recipients of federal grants of any amount must adhere to the requirements of the DFWA under the Uniform Grant Guidance.
For federal contractors, the requirements of the drug-free workplace program are contained in the Federal Acquisition Regulation.[14] They require a statement/policy, training and education, monitoring, auditing, reporting, and discipline.
If an employer is subject to the DFWA, it must:
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Establish a drug-free workplace statement, enforce it, and ensure employees’ conformance with it.
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The statement must notify employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the person’s workplace and specify the actions that will be taken against employees for violations of the prohibition (e.g., discipline, up to and including termination).
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Provide a copy of this statement to each employee engaged in performing the contract.
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Notify each employee that as a condition of employment on the contract the employee will abide by the terms of the statement.
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Establish a drug-free awareness program to inform employees about:
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The dangers of drug abuse in the workplace;
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The employer’s policy of maintaining a drug-free workplace;
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Any available drug counseling, rehabilitation, and employee assistance programs; and
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The penalties that may be imposed upon employees for drug abuse violations;
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Adhere to obligations regarding an employee’s criminal drug statute conviction:
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The employees must be notified that they are required to tell the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five days after the conviction.
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The employer must notify the contracting agency within 10 days after receiving such notice from an employee or otherwise receiving actual notice of a conviction.
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The employer must impose a sanction on or require the satisfactory participation in a drug abuse assistance or rehabilitation program by any employee convicted.
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Make a good faith effort to continue to maintain a drug-free workplace.
In short, employers who are subject to the DFWA must maintain a drug-free workplace and will not be forced by law to accommodate the consumption of marijuana (medical or recreational), even in states where consumption is lawful. On the other hand, nothing in the DFWA requires an employer to drug test employees or applicants.
State Employment Laws Implicated in Legalization of Cannabis
This section sets forth information on various states’ positions on whether state employment laws will protect medical marijuana patients in the workplace. In addition, background information is provided on three types of marijuana legalization—medical, low-THC, and recreational—that have been adopted and the potential effect on compliance programs of multi-state corporations.
Medical Marijuana
Themes
While no two medical marijuana laws are the same, many contain common themes related to regulation and patients. For example, the medical marijuana laws generally:
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Identify the medical conditions that an individual must have to qualify for the use of medical marijuana.
Generally speaking, an individual must have a chronic, debilitating, or serious medical condition to qualify for the use of medical marijuana. Each state’s law identifies what specific conditions (e.g., cancer, AIDS, glaucoma, multiple sclerosis, epilepsy, Alzheimer’s disease) and/or symptoms (e.g., severe pain, severe nausea, persistent muscle spasms, seizures) qualify as chronic, debilitating, or serious to warrant use of medical marijuana.
In states where an individual must have a qualifying medical condition in order to have a legal right to use marijuana, an employee or applicant may inform an employer that they have a medical marijuana card.
When employees or applicants share this information, it puts the employer on notice that this individual could be a “qualified individual with a disability” under the ADA (or state law equivalent) and/or have a “serious medical condition,” as that term is defined by the FMLA. In some circumstances, it will also be Health Insurance Portability and Accountability Act protected information that a company needs to be prepared to handle properly.
While federal law does not provide an employee or applicant with protection for the current use of marijuana, it does not mean that the condition for which the employee consumes marijuana does not warrant accommodation. This situation generally arises when an employee or applicant has not (yet) tested positive for marijuana or exhibited evidence of being under the influence at work but instead proactively approaches an employer with information that they have a medical marijuana card, without providing additional information on whether and if they have used marijuana recently.
At that point, the employer may have an obligation to determine whether it needs to accommodate the employee’s disability, even if there is no obligation to accommodate the consumption of medical marijuana. State law may require an employer to accommodate the disability and consumption of marijuana as treatment of that disability.
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Require a licensed physician to certify or recommend the use of medical marijuana.
Physicians do not “prescribe” marijuana in the way they do for pharmaceuticals.[15] The Drug Enforcement Agency assigns eligible physicians with a number they must have and use in order to prescribe certain medications. Because marijuana remains illegal under federal law, physicians risk losing their Drug Enforcement Agency numbers if they were to “prescribe” marijuana to their patients.
Therefore, the state laws only require that a state-licensed physician: (a) certify that an individual has a qualifying medical condition allowing for the use of medical marijuana; or (b) recommend the use of medical marijuana to alleviate the symptoms associated with the condition at issue.
This distinction is important, particularly when an employer has a prescription medication policy in an employee handbook, as it presumptively carves out the use of medical marijuana as being covered, since it is never prescribed. In states where medical marijuana is lawful, it is critical to ensure your company policy is clearly set forth in both policy and in the employee handbook so that the language leaves no room for confusion between prescribed medications and recommended medical marijuana.
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Require an individual user to register and obtain a patient identification card.
Nearly every state has a medical marijuana patient registry and requires an individual to receive a medical marijuana program card of some kind.
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Place limitations on the quantity of marijuana that an individual can possess and, if allowed, grow at any one time.
An individual with a medical marijuana card is not free to possess an unlimited quantity of marijuana. Specific ounce limits are included in state laws. Further, in states where an individual is permitted to cultivate their own marijuana, the law limits the number of total plants, often with additional limits on how many plants can be mature at any given time.
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Identify and limit the forms of consumption of medical marijuana.
The manner in which an individual can consume medical marijuana is also regulated. In Maryland, for example, edible forms of marijuana are prohibited. In Minnesota and New York, medical marijuana can only be consumed in the form of liquid (cannabis oil), pill, vapor, or any method other than smoking.
Pennsylvania also prohibits smoking and only permits the use of medical cannabis in the form of pills, oils, gels, creams, ointments, tinctures, liquid, and nonwhole plant forms for administration through vaporization.
Like other areas of medical marijuana regulation, these laws are in constant flux. Patients in Florida recently challenged Florida’s prohibition on smoking marijuana and prevailed in the appellate court. The smoking prohibition was deemed to be unenforceable and unconstitutional under the Florida Constitution. Since it typically takes a few years for laws to reach the appellate courts for interpretation, we can expect to see constant changes in the legal landscape.
Are there state protections for workers who use medical marijuana? Yes! Importantly, the protections afforded to workers consuming medical marijuana vary from state to state. Generally speaking, these medical marijuana laws contain anti-discrimination and/or reasonable accommodation provisions addressed to employers.
At a basic level, the laws seek to ensure that an individual is not denied employment opportunities on the basis that they have been certified to consume medical marijuana, without regard to whether or if they have recently consumed marijuana. Most states continue to introduce bills to protect workers’ rights to consume marijuana either for medical purposes or adult use.
Beyond this basic principle, it is critical to consult the law to determine whether and how an employer must: (a) provide any protection if the employer is subject to the DFWA; (b) accommodate the consumption of medical marijuana; or, (c) accommodate the medical marijuana consumer. With respect to this last point, where an employer is required only to accommodate the consumer, the employer should use the interactive process to determine what reasonable accommodation may be necessary.
Where state laws provide worker protections, such protection is not always absolute. For example, in Arizona, Connecticut, Delaware, and Pennsylvania, an employer is permitted to discipline an employee who is under the influence of medical marijuana at work. In addition, Connecticut, Delaware, Nevada, and Pennsylvania laws state that while workers enjoy protection from being discriminated against on the basis of being a qualified medical marijuana consumer, such protection does not preclude an employer from prohibiting the consumption of marijuana at work, during work hours, and on work premises.
Moreover, Arizona, Connecticut, Delaware, Minnesota, New York, and Pennsylvania laws provide that the worker protections do not apply if providing such protection would: (a) be in violation of federal law or regulations; and/or (b) if it causes an employer to lose a monetary or licensing-related benefit under federal law or regulations. Thus, employers subject to the DFWA are free to comply with their obligations to enforce a drug-free workplace or other regulations that require employees to be drug free, such as Department of Transportation or Federal Aviation Administration regulations.
However, as mentioned, these state laws are constantly evolving. If there is one truth in medical marijuana, it is change. While California is typically a leader in workers’ rights, it recognized it was behind when it came to worker protections for medical marijuana. California just recently passed legislation to prohibit employer testing for cannabis and to protect and accommodate employees who participate in medical marijuana programs. Those laws go into effect January 1, 2024.
The state supreme courts in California, Colorado, Oregon, Montana, and Washington, as well as the federal appellate courts for the Sixth and Ninth Circuits, have all held that state medical marijuana laws do not require employers to accommodate medical marijuana use in the workplace. Even so, in some such cases, other existing state laws on discrimination may provide protection.
Courts in Rhode Island, Massachusetts, New Jersey, Nevada, and Connecticut have ruled that employers may not discriminate against employees for consuming medical marijuana. Those courts permitted cases to move forward against employers where employers terminated employees based on discovery that they had consumed medical marijuana.
In March 2019, a New Jersey Superior Court held that even though New Jersey’s Compassionate Use Medical Marijuana Act did not require employers to “accommodate a medical marijuana user,” nothing in the Act could effectively remove protections that other New Jersey laws against discrimination provide. In essence, the language of the Compassionate Use Medical Marijuana Act did not require accommodation, but it also did not remove the accommodation requirements other laws impose. The court permitted a case to survive summary judgment and move forward on discriminatory termination grounds where the employee was terminated for using medical marijuana as part of his treatment for cancer. (See Wild v. Carriage Funeral Holdings, Inc., New Jersey Superior Court, 2019.)
A US district court in Nevada came to a similar conclusion in letting a case proceed against an employer where the employee was a nurse who was fired for testing positive for legally consumed medical cannabis after he was attacked and injured at work. The employee’s arguments were largely public policy oriented and compelling. (See Nellis v. Sunrise Hospital and Medical Center, Inc., U.S. District Court, District of Nevada, 2019.)
Low-THC Form of Cannabis
As set forth above, there are two main ingredients in cannabis: THC and CBD. CBD is non-psychoactive and widely known to have therapeutic value. All states and the District of Columbia permit CBD for medical and/or recreational consumption. In some states, it is fully legal, but in others it is conditionally legalized. A minority of states have enacted laws that specifically permit the use of cannabis extracts that are high in CBD and low in THC to treat severe, debilitating conditions. In some states, these laws are distinct from laws legalizing medical marijuana.
Generally speaking, these states are more specific when identifying the medical conditions that an individual must have to qualify for the use of low-THC cannabis. For example, Georgia legalized use for only nine specified medical conditions, including end-stage cancer, Lou Gehrig’s disease, seizure disorders, multiple sclerosis, Crohn’s disease, mitochondrial disease, Parkinson’s disease, and sickle cell disease. However, these laws are evolving, and Georgia has approved cannabis for 18 conditions as of 2023. In addition, the form of cannabis authorized is also more limited in low-THC jurisdictions. In Georgia, and Tennessee, for example, only cannabis oil is legal.
Adult-Use Marijuana
While adult-use (or recreational-use) marijuana has been legalized in 23 states and the District of Columbia, it is where the most change is likely to occur in the next decade. While no two adult-use marijuana laws are the same, they all:
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Require an individual to be 21 years or older to transport, buy, or possess marijuana.
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Limit the amount an individual may possess at any given time.
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Prohibit public consumption of marijuana.
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Do not affirmatively require an employer to accommodate the use of recreational marijuana.
With respect to this last bullet point, Alaska, Colorado, Michigan, and the District of Columbia explicitly state that an employer is not required to permit or accommodate the consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the consumption of marijuana by employees.
Oregon law states that the legalization of medical marijuana does not affect any laws “pertaining to employment matters.” This is vague. However, Oregon’s medical marijuana statute states that it does not require an employer to accommodate the medical consumption of marijuana in the workplace. Accordingly, this may support the conclusion that an employer would be under no obligation to accommodate recreational consumption, either.
Similarly, while Washington state’s recreational marijuana law is silent on the issue of accommodation, a review of its medical marijuana law shows that a Washington state employer is under no obligation to accommodate any on-site medical consumption of cannabis, and that an employer may establish a drug-free workplace policy.
Extrapolating from that, it is reasonable to conclude that neither Oregon nor Washington state law places any affirmative obligation on an employer to accommodate the consumption of recreational marijuana in the workplace.
Illinois has passed employee protections, and employers should be prepared to eliminate any zero- tolerance marijuana policies for their workplaces. The Cannabis Act went into effect January 1, 2020 and amended the Illinois Right to Privacy in the Workplace Act to prohibit employment discrimination against an employee who consumes “lawful products off the premises of the employer during nonworking and noncall hours.” This broad language seems to provide protection for off-duty recreational consumption—protection that not many other states provide.
Illinois employers may take advantage of several safe harbors when the new law comes into effect. Employers will be able to discriminate against marijuana consumers if the consumption “impairs an employee’s ability to perform the employee’s assigned duties.” Employers are not required to “permit an employee to be under the influence” of marijuana “in the employer’s workplace or while performing the employee’s job duties or while on call.”
Illinois is part of a trend gaining momentum forcing employer accommodation of adult-use consumption of marijuana outside of the workplace. That said, all employers should ensure their employee handbooks and other policies are clear on the scope of worker protections under medical marijuana programs and adult-use consumption of marijuana laws. It is very important for employers who are required or seek to have drug-free workplace programs to have the necessary oversight, policies, training, monitoring, and auditing required to maintain a drug-free workplace, and it is equally important that employers respect the legal rights of employees to engage in lawful conduct during off- duty hours. Clarity is king for employers and employees alike.
Compliance & Ethics Program Issues
Oversight
As with any compliance area, it is vital to appoint someone in the company to oversee compliance with medication, drug, and alcohol policies. It is a best practice to ensure the individual has the training necessary to be knowledgeable and up to date on the laws and how those laws impact the corporate risk assessment.
Risk Assessment
It is advisable to address legalization of cannabis in your corporate risk assessment. Even if state law does not require the company to accommodate medical marijuana consumption, it is prudent to identify to what extent legalization may touch your company and create new risks that may not be mitigated by policies, training, or existing insurance policies due to exclusions.
Consider this scenario as an example. A Colorado manager flies to South Dakota to interview a potential new vendor. While driving a car rented by the company, the employee is rear-ended while stopped at a light and is injured. The employee’s urine is tested as a routine, post-accident measure for worker’s compensation and is positive for THC metabolite because the employee recreationally consumes marijuana. Will state law in Colorado require your company to pay worker’s compensation? Will your insurance carrier cover the payments? Can the company legally terminate the employee? Should the employee be terminated for a no-fault accident?
The time to have these discussions is now—before these problems arise. Compliance professionals are at the tip of the spear on these issues, as they are responsible for identifying and mitigating legal risk areas, in partnership with the legal team, executive leadership, and the governing authority.
Drug Free Workplace Policies
Courts in most states that have considered the issue have concluded that employers remain free to set and enforce their own drug policies, however, the playing field is changing quickly.
In late 2018, a federal court explicitly held that an employer subject to the Drug-Free Workplace Act may terminate an employee for otherwise state-lawful consumption of cannabis. (See Carlson v. Charter Communications LLC, U.S. District Court, District of Montana.)
In 2017, a Hawaii company terminated an employee after the employee had a panic attack at work, was transported to the hospital, and tested positive for consumption of marijuana in a routine post-incident drug test. Summary judgment for the employer was affirmed largely in part because the employer had a federal drug-free workplace, the employee had not complied with state laws on consumption of medical marijuana, and the employer was able to show termination was for legitimate violations of the drug-free workplace policies. (See Lamdin v. Marriott Resorts Hospitality Corp., United States District Court for the District of Hawaii, 2017.)
With this in mind, here are some tips and guidance to consider when drafting a drug-free workplace policy or reviewing one in place:
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Be clear about prohibiting illegal drug use, regardless of where or when the use occurs. Most often, drug policies prohibit the use of illegal drugs only at work, during work hours, and/or on the work premises. Similarly, policies sometimes prohibit being under the influence of illegal drugs only at work or on work premises. Policies should clearly define “illegal drugs,” “under the influence,” or “impairment,” and “during work hours.” Many companies have supervisors and managers on call to either come in to work or answer questions even while not on the clock. It is critical that expectations be set forth clearly in the employee handbook and policies so that employees know whether and when they can consume alcohol, medical or recreational marijuana, or even prescription medications that can place them under the influence (such as insomnia or pain medications). For this reason, it may be prudent to separate “use of substances” policies into an alcohol, tobacco, and prescription medication policy and a separate illegal substances policy that may or may not include marijuana depending on the employer’s desire to be a drug-free workplace or not.
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Draft very clear and direct drug-testing policies that put employees on notice of when an employer may test and specific actions the employer may take if the employee tests positive for any substance during work hours.
Urine testing for the metabolite of THC/marijuana is not the same as testing for alcohol. The metabolite of THC/marijuana will show up in a drug test hours, days, and sometimes weeks (for chronic consumers) after an individual consumed marijuana. Comparatively, a blood or breath alcohol test is for current blood alcohol levels. Therefore, the presence of THC metabolites is not indicative that an employee consumed or was under the influence of marijuana at work or during work hours.
In several states, it is unlawful to terminate an employee due to off-duty conduct. A positive test for marijuana may not be enough to terminate an employee. It is important to understand state laws on these issues as well as considering on a state-by-state basis whether an employee will qualify for unemployment benefits under these circumstances. It is also critical to consider the corporate insurance policies and what may be covered or not by worker’s compensation, medical coverage, and other liability coverage such as auto insurance. Engaging a cannabis attorney is helpful. The International Cannabis Bar Association is a great resource for finding a cannabis lawyer who can provide advice in the era of legalized cannabis.
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Consider whether the company is required to accommodate the consumption of medical marijuana and if so, state clearly in the policy the company will do so as required by state law.
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Make sure that any drug-testing policy reserves the right to take adverse action based on any verified test “to the fullest extent permitted by law.” This allows a nationwide employer or one that crosses various jurisdictions to ensure that if a state provides protections to workers certified to use medical marijuana, the policy does not run afoul of that requirement. As with any policy, apply it consistently.
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If a company wishes to designate safety-sensitive positions, those should be set forth in a policy, and job descriptions should be updated to reflect the designation.
Training and Education
Because this area of law is evolving so quickly, training compliance, safety, human resources professionals, supervisors, and employees remains a priority. Ensure that your substance policies include the necessary training requirements (safety personnel, human resources, drivers with commercial licenses, etc.). It may also be prudent to train supervisors on recognizing the different types of impairment. Employees under the influence of marijuana may not be easily discernable and, as mentioned, a positive test for THC metabolite is not determinative that an employee was or is under the influence of or impaired by marijuana while in the workplace.
Monitoring and Auditing
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A hotline is a useful monitoring tool when employees are willing to use it. It is prudent to remind employees to use their supervisory chain of command first if they are concerned about another employee being under the influence of any substance at work. Although, it is also advisable to inform employees that they may use the hotline to report concerns about use or consumption of substances in the workplace.
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Most companies will have a drug-testing program of some sort, whether pre-employment, post-accident, or otherwise. Once a company decides on a substance testing policy, it is critical to consistently follow it for all employees at any level. When planned, managed, and executed properly, a drug-testing program will serve as an effective monitoring tool.
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When developing an audit plan in corporate legal risk areas, it is a good idea to plan for an audit of the corporation’s approach to marijuana consumption. A review of existing policies, processes, training, and the effectiveness of monitoring tools should be key elements of any audit. For example, if a third-party vendor is used for the drug-testing program, it would be best practice to look into the compliance record of the vendor and any laboratory doing the testing to ensure they have not been sued, cited, or otherwise had adverse action based on misconduct, faulty testing protocols, or other problems that would call into question the validity of their operations.
Discipline and Incentives
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Disciplining employees who violate company substance use or abuse policies is good business practice. It is important that the discipline be consistent regardless of employee tenure, title, or position. Compliance professionals should review any progressive discipline policy to ensure that it aligns with any new policy or employee handbook language on consumption of medical or recreational marijuana. If the progressive discipline policy is not crafted to address legalized cannabis, it is advisable to consider appropriate revisions to the policy.
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If the company has a collective bargaining agreement, this can get more complicated because collective bargaining agreements are entered under federal law—the National Labor Relations Act.[16] Because marijuana is still illegal under federal law, employers have no obligation to accommodate consumption of marijuana in a collective bargaining agreement; however, the agreement contains the terms of the employer–employee relationship, typically including employee discipline and termination. If an employer is required under state law to provide certain employee protections, it is vitally important that those requirements be made a part of any collective bargaining agreement to harmonize state and federal law to the greatest extent possible.
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Often, collective bargaining agreements are entered for a period of years at a time. It is possible that as a previous multi-year contract expires and negotiations begin for a new contract, cannabis laws may have shifted dramatically. At contract renewal time, it will be critically important for employers to get expert advice on contract terms that meet the employer’s substance use and consumption objectives and protect employees to the extent required by law. This is not an issue to be ignored when negotiating discipline and termination processes and procedures in collective bargaining agreements.