Small Businesses Grapple With Maze of Conflicting Cannabis Laws

Published on May 3, 2018 · Last updated July 28, 2020

WASHINGTON (AP) — A low unemployment rate and the spread of cannabis legalization have led many businesses to rethink their drug testing policies for the first time in decades. A small but increasing number are simply no longer testing for marijuana use.

For small businesses, however, how to handle these challenges may be a tougher call than for bigger corporations. There is a bewildering patchwork of state laws regarding medical and recreational marijuana use. And it’s still illegal under federal law. Yet smaller companies don’t have extensive HR and legal departments to help them sort through it all.

“There is a lot of conflict there, and many employers, they just don’t know what to do,” said Kathryn Russo, a lawyer at Melville, New York-based firm Jackson Lewis. Recreational marijuana use is legal in nine states plus Washington, D.C., and medical marijuana is legal in 29 states.

Here are some questions small businesses need to consider when deciding on what drug testing policies to follow:

Is It a Federally Regulated Position? Safety-Sensitive?

Employment lawyers say these cases are the easy ones. If your business is regulated by the federal Department of Transportation or is a defense contractor, you are likely legally required to drug test for all drugs illegal at the federal level, including marijuana. Similarly, if a job raises safety concerns — such as a forklift driver, an operator of heavy factory equipment, or a meat slicer — it’s in the best interests of the employer to still test for cannabis, even if it is legal in your state.

How long does weed stay in your system?

Don’t Discriminate

In states where medical marijuana is legal, small businesses increasingly risk running into legal trouble if they deny a job to someone who has obtained a medical marijuana prescription.

Three court cases in the past year have sided with employees.

Until last year, courts typically deferred to employers who didn’t want to hire marijuana users, regardless of state law. It’s still illegal under federal law, after all.

But three court cases in the past year have sided with employees, forcing companies in Connecticut, Massachusetts and Rhode Island to reinstate workers with medical marijuana cards who were fired, or whose job offers were rescinded, because they tested positive.

In roughly a dozen states, medical marijuana users are protected to some degree from employment discrimination, Russo said. Yet the state laws around the issue are “all different,” she said. In Arizona and Pennsylvania, for example, state law explicitly allows employers to bar medical pot users from safety-sensitive positions, Russo said. Other states don’t have clear rules.

What About Workers’ Comp?

Some companies may receive discounts on their workers’ compensation insurance premiums if they conduct drug tests. If an employer is thinking about stopping testing, they should find out whether they would lose that discount.

Michael Clarkson, head of the drug testing practice at Ogletree Deakins, recommends small companies check in with their insurance brokers before making a final decision.

Keep an Eye on the White House

In January, Attorney General Jeff Sessions revoked a policy from the Obama administration that had discouraged federal prosecutors from pursuing marijuana cases in states where the drug is legal.

“Your guess is as good as mine where the federal government is.”

That move suggested the Trump administration would crack down on marijuana users and caused even greater confusion among employers.

Last month, Trump promised Colorado Senator Cory Gardner, a Republican, that the federal government wouldn’t target his state’s marijuana industry. The state was one of the first to legalize recreational pot when it did so in 2014.

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Still, it’s not clear to most employment lawyers where exactly the administration stands.

“Your guess is as good as mine where the federal government is,” Clarkson said.

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The Associated Press
The Associated Press
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