Weed at Work: Is All Cannabis Illegal?

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This is the first in a three-part series of articles on cannabis laws and court opinions. Today's article reviews different rulings on federal pre-emption of state marijuana laws. The second part discusses workplace accommodations for medical marijuana use, and the third part focuses on how marijuana is treated under state workers' compensation and benefit programs.

The legal landscape surrounding marijuana and the workplace is dynamic and changing quickly. Employers must navigate a labyrinth of federal and state statutes and court decisions when developing substance-abuse policies and drug-testing practices around cannabis.

Regulatory Background

United States law currently treats two different species of cannabis—marijuana and hemp—quite differently. Both species contain various cannabinoid compounds, including cannabidiol (CBD), a nonpsychoactive component said to have medicinal value, and tetrahydrocannabinol (THC), the primary psychoactive compound in cannabis. 

The federal Controlled Substances Act (CSA) lists marijuana as a Schedule I drug, thereby declaring that it has a high potential for abuse and no accepted medical use. The CSA prevents the production, distribution and use of marijuana. Recently, the 2018 Farm Bill recognized hemp cultivation as lawful and excluded hemp and hemp-derived products that don't contain more than 0.3 percent of THC from the CSA's prohibitions. Hemp can be used to make a variety of products, including paper, rope, clothing and cosmetics.

In stark contrast to federal law, 33 states and Washington, D.C., allow marijuana use for medical purposes, 10 states permit full recreational use, and a growing number of states permit medicinal use of CBD products with low THC levels.

Outside of the U.S., several countries, such as Mexico, Italy and Germany, permit marijuana for medical use, and others, such as Canada and Uruguay, permit full recreational use.

Confusion About Federal Pre-Emption

Some employers that fired or refused to hire medical marijuana patients have been sued for discrimination under the applicable state law. Employers often argue that federal law prohibits medical marijuana use, and thus, state marijuana laws cannot afford employees any protections. Some courts have agreed with this argument—others have not.

One of the earliest cases came before the Oregon Supreme Court: Steel Fabricators v. Bureau of Labor and Industry. The employer challenged the Oregon Bureau of Labor and Industries' finding that it unlawfully discriminated against an employee for using medical marijuana in accordance with the Oregon Medical Marijuana Act.

The court said that a conflict between federal and state laws exists "when it is physically impossible to comply with both state and federal law" or when the state law works as a barrier to the achievement and execution of the federal law.  

Since the state law authorizes medical marijuana use and the CSA prohibits it, the court said that the Oregon law served as an obstacle to CSA enforcement. Therefore, the court ruled that the CSA pre-empted state law.

Several other decisions likewise found that the CSA pre-empts state law and therefore employers do not need to permit medical marijuana use. In 2008, for instance, the California Supreme Court decided Ross v. RagingWire Telecommunications Inc. and concluded that employers need not accommodate marijuana use. The court reasoned that no state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law, so the California statute could not be read to require an employer to accommodate such use.

In 2015, the Colorado Supreme Court decided Coats v. Dish Network and held that marijuana use could not be considered a lawful activity given the CSA's prohibitions, even though state law permitted medical marijuana use. As such, its use is not protected under a Colorado statute that generally makes it unlawful to discharge an employee for engaging in lawful off-duty activities.

In 2016, the U.S. District Court for the District of New Mexico similarly ruled in Garcia v. Tractor Supply Co. that the state's medical marijuana law did not require an employer to accommodate an employee's use of medical marijuana.

Is Change Afoot?

Recent court opinions suggest a change in direction on the pre-emption issue. In 2017, the U.S. District Court for the District of Connecticut decided Noffsinger v. SSC Niantic Operating Co. LLC. There, the court held that employers cannot claim federal pre-emption to avoid discrimination lawsuits brought by employees who use medical marijuana in accordance with a state program.

The employee in Noffsinger had post-traumatic stress disorder, which qualified her as a patient under Connecticut's Palliative Use of Marijuana Act (PUMA). PUMA prohibits employers from discriminating against qualifying patients. The employee received a conditional job offer requiring her to pass a drug screening. She told the employer she could not pass the test because she used medical marijuana supplements at night. She said it would not affect her performance during the day.

The employer nevertheless rescinded the offer, and the employee filed suit alleging a violation of PUMA. The employer argued that federal laws, including the CSA, pre-empted PUMA's discrimination protections.

The court ultimately held that the CSA does not speak to the issue of employing marijuana users, so the CSA could not be viewed as intending to pre-empt state laws like PUMA, which explicitly protect medical marijuana users from employment discrimination.

Tips for Employers

Gone are the days when employers could issue a zero-tolerance drug policy without giving it a second thought. Employers may no longer be able to prohibit cannabis use across the board simply because it is illegal under the CSA. 

[SHRM members-only HR Q&A: What laws should companies be aware of when implementing a drug testing program?]

Drug-testing and screening policies must account for anti-discrimination protections that stem from marijuana legalization statutes and subsequent court decisions. Employers should also consider the growing use of CBD products when developing such policies. Since hemp was removed from the controlled-substances list, some CBD products may no longer violate federal law. For example, in June 2018, the Food and Drug Administration approved Epidiolex, a CBD product, to treat seizures in certain cases.

The second part of this series will discuss whether an employer must accommodate an employee's medical use of marijuana to treat a disability.

Dean Rocco is an attorney with Wilson Elser in Los Angeles. Noelle Sheehan is an attorney with Wilson Elser in Orlando, Fla.