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RIMS Report: Risk Management Implications of Conflicting Federal and State Cannabis Laws

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The RIMS External Affairs Committee has issued a new Legislative Review discussing the challenges risk professionals may face regarding the cannabis laws in the United States.

Available exclusively to members, The Risk Management Implications of Conflicting Federal and State Cannabis Laws is designed as a resource for risk professionals representing cannabis businesses, as well as landowners and landlords who often face a range of issues as a result of the disconnect between state and federal cannabis laws.

The sale, possession and use of marijuana has been fully and partially decriminalized in many states, but is still federally recognized as a “Schedule I Narcotic” under the Controlled Substances Act. This has led to conflicting interpretations of the law and unwittingly put many companies at risk of breaking the law.

“The members comprising our external affairs committee have been monitoring the developments related to cannabis for years,” said Whitney Craig, RIMS Government Affairs Director. “There are few absolutes when it comes to cannabis in the United States, but the review provides a concise guide to help members navigate through the challenges posed in this evolving industry.

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The review discusses:

  • how and when to navigate between state and federal laws
  • the risks of a marijuana business opening a bank account
  • what types of businesses are subject to federal drug raids
  • how these laws and risks impact residential and commercial owners
  • insurance resources
  • and more.

“Until the Controlled Substances Act is amended to remove marijuana as a Schedule I Narcotic, there is always some risk that shifting political winds or other factors in the area where the business is located may result in prosecution, even where marijuana has been legalized or decriminalized,” the report states. “Careful due diligence and legal advice from counsel familiar with this area of law is always a wise choice.”

The report touches on a number of new cannabis industries, such as delta 8 THC which has become popular in Texas due to the recent DSHS ban. There are a number of merchant services that will process payments for delta 8 THC products, and there are also a number of banks who will accept these clients, according to delta 8 vape manufacturer Area 52.

The report is currently available exclusively to RIMS members.

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To download the report, visit RIMS Risk Knowledge library at www.RIMS.org/RiskKnowledge. For more information about the Society and to learn about other RIMS publications, educational opportunities, conferences and resources, visit www.RIMS.org.

Risk Management magazine has covered the risks that growing marijuana can pose to commercial or residential property.

Marijuana’s Cost to Employers

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With the adoption of more state laws to legalize marijuana, employers will face challenges to protect their employees from injury and to comply with federal requirements to maintain a drug-free workplace.

Employers also face potentially costly litigation as case law surrounding legal marijuana develops, according to the Quest Diagnostics whitepaper “What Will ‘Legal’ Marijuana Cost Employers?”

Marijuana-workplace

Quest reports that medical marijuana legalization brought forth a new phenomenon: the production of marijuana-infused foods and gadgets, which presents a special problem for employers. Today, nearly half of marijuana users in states where it is legal consume marijuana by eating it rather than smoking it. In addition, vape pens, which are like e-cigarettes but contain capsules of concentrated marijuana oils, leave no marijuana smell and are impossible to tell apart from e-cigarettes. These two modes of consumption will make it more difficult, if not impossible, for employers to tell when employees are using marijuana on the job.

As marijuana use increases, so will workplace injuries, accidents, mistakes, and employee illnesses, escalating the costs of companies’ liability, workers’ compensation and health insurance.

Questions companies should ask include:

  • Will employers have to accommodate marijuana use in their workplaces? A closely watched case. Before the Colorado Supreme Court will establish, at least in Colorado, whether employees can use marijuana off the clock even if they may be impaired the next day.
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  • Must employers pay for employees’ medical marijuana if they are injured on the job? By allowing a court of appeals decision to stand, the New Mexico Supreme Court finds that the answer is yes.
  • Will the use of legal cannabinoids like delta 8 THC be allowed in the workplace?
  • What does increased adolescent marijuana use portend for the future workforce? Research shows that compared to nonusers, teens who smoke marijuana on weekends over a two-year period are six times more likely to drop out of high school, three times less likely to enter college, and four times less likely to earn a college degree?
  • How can employers meet federal requirements to maintain a drug-free workplace if states require proof of impairment rather than the presence of marijuana in the body when no level of impairment has been scientifically established and no noninvasive test to denote impairment has been developed?
  • If courts hold that drug testing is no longer a valid indicator of impairment, how can employers whose businesses involve driving or other safety-sensitive positions protect their workers and the public from injuries and deaths cause by stoned drivers?
  • What if courts hold that failing a pre-employment drug test is no longer a valid reason to deny employment to applicants?

There are, however, steps employers can take to protect themselves:

1) Stay up-to-date with the changing legal landscape and adjust workplace policies accordingly.

2) Remember that marijuana is still illegal under federal law.

3) Join other employers to monitor state legislation and take action with legislators to ensure workplace protections are included in any marijuana laws.

4) Educate your workforce about the dangers marijuana poses to children, families and the workplace.

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5) Challenge the notion that marijuana is medicine, or risk paying for it in your health insurance program. No marijuana medicines being sold in states that legalized them have been approved by FDA as pure, safe, or effective.

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Doctors cannot prescribe them and pharmacies cannot sell them.

Nearly 10% of Americans Have Gone to Work High

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Marijuana in the workplace

According to a new study conducted by Mashable and Survey Monkey, 9.74% of American workers have been under the influence of marijuana when they went to work. Of that group, about 81% obtained the pot illegally, meaning only 19%  purchased it recreationally in Washington or Colorado, or bought it for medicinal purposes where medical marijuana has been legalized in one of 23 states or Washington, D.C.

Nearly three times as many workers have been on prescription drugs on the job, but only 7.

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28% reported that they had taken the drugs recreationally, and 95.

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36% had obtained the medication legally, with a doctor’s prescription.

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Check out the infographic below for more of the study’s findings on drug use in the workplace, and who some of the riskiest employees may be:

Drugs at work infographic

The Quagmire of Medical Marijuana in the Workplace

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medical marijuana

At the time of this writing, there are 14 states that have legalized the use of marijuana for medicinal purposes. This, of course, poses quite a few problems regarding the employment of individuals who are prescribed pot. Probably the most pressing is the issue of workers compensation for employees who use medical marijuana and are injured on the job.

Since the Obama administration announced last year that it would end raids on distributors of medical marijuana if such dispensaries were following their state’s laws on the matter, the number of dispensaries exploded in those 14 states (California alone has more than 2,000 of these pot depots). Below is a list of states that have enacted laws that legalize medical marijuana use (courtesy of ProCon.org)

I was curious as to some of the issues regarding employment and medical marijuana so I contacted Brett Halloran, attorney with New Jersey-based Fox Rothschild LLP.

Emily Holbrook: How far does an employer have to go to accommodate medical marijuana users? Are they required to tolerate it in the states that allow such use?

Brett Halloran: Under New Jersey’s law, an employer does not have to accommodate the use of medical marijuana at all, although it may do so if it wishes. I am not aware of any state medical marijuana law that would require an employer to accommodate the use of medical marijuana in the workplace.

Holbrook: Do employers follow state or federal law when it comes to dealing with an employee who is prescribed medical marijuana?

Halloran: Employers need to be cognizant of both federal and state law. While state law may permit the use of medical marijuana, federal law still treats the use of marijuana as a crime, regardless how or why the individual obtained the drug. Therefore, at least under federal, use of medical marijuana is still a crime in all 50 states. In part because of that reason, courts have generally held that employers in states that permit the use of medical marijuana are not required to accommodate its use in the workplace.

Holbrook: How do some employers’ “zero-tolerance” programs need to adjust for the legalization of medical marijuana in some states?

Halloran: For the time being, employers may continue to have “zero tolerance” for workplace drug use, including the use of marijuana, in states that permit medical marijuana. That said, however, employers should review any such policies, including drug-testing policies, to make clear that any prohibition on the use of illegal drugs extends to marijuana prescribed and taken under state medical marijuana laws. By taking an explicit position on the use of medical marijuana by employees, employers can help insulate themselves from a claim, in the context of a later disability discrimination suit, that the employer’s stated reason for a resulting adverse job action was mere pretext.

That brings us to a recent case in Michigan involving a Walmart employee who was fired for testing positive for marijuana during a employer-issued drug test. The 30-year-old employee, who was prescribed marijuana to treat symptoms of an inoperable brain tumor and sinus cancer, was issued the drug test after an on-the-job injury, which is Walmart’s policy. Is this fair? The American Civil Liberties Union doesn’t think so — they immediately filed a lawsuit.

“No patient should be forced to choose between adequate pain relief and gainful employment,” Scott Michelman, a staff attorney with the ACLU Drug Law Reform Project told CNN. “And no employer should be allowed to intrude upon private medical choices made by employees in consultation with their doctors.”

As you have probably guessed, the Walmart employee of five years has also filed a lawsuit. In Walmart’s defense, however, they claimed that “like other companies, we have to consider the overall safety of our customers and our associates, including Mr. Casias, when making a difficult decision like this.”

The issue of medical marijuana in the workplace will only become more important and widespread as more states are set to legalize its medicinal use.