Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Two bipartisan cannabis research bills start their legislative journey.  The Supreme Court refuses to hear a 280E case.  Attorney General Garland reiterates his disinterest in prosecuting marijuana users abiding by state law.  The Texas legislature moves on cannabis decriminalization.  And finally, you can now purchase Amish CBD.

cannabis research bills

A bipartisan, bicameral group recently introduced the VA Medicinal Cannabis Research Act.  This bill directs the Department of Veterans Affairs to conduct research into the efficacy of medical marijuana in treating veterans with PTSD.  Also this week, another bipartisan, bicameral group introduced the Marijuana Data Collection Act.  This bill requires the federal government to study the effects of legal cannabis on  state economies, public health, criminal justice, and employment.

supreme court

Moving to the judicial branch, the U.S. Supreme Court refused to hear a case involving section 280E of the Internal Revenue Code this week.  The case began in 2015 in the U.S. Tax Court, which threw out an attempt to appeal an IRS tax bill decision.  Then, the 9th Circuit affirmed the Tax Court’s decision.  With the Supreme Court’s refusal to hear the case, the companies will have to pay up.  This is not the first time the Court has refused to hear a 280E case; they did the same thing in 2019.

department of justice

Attorney General Merrick Garland stated that he did not believe prosecuting marijuana users in states where cannabis is legal is a good use of the Justice Department’s resources.  His remarks came during a House Appropriations subcommittee hearing during which he was asked about large-scale trafficking.  In other state-law protection news, a bipartisan group of House members sent a letter to House leadership asking that the DOJ be prevented from prosecuting those who follow state cannabis laws.  The request would preserve protections for medical marijuana companies and users and add protections for the adult-use industry.

texas

In state news, the Texas House passed several bills dealing with cannabis.  One would decriminalize marijuana possession.  The second would expand the state’s medical marijuana program, and the third would reduce penalties for possession of some concentrates.  The measures now move to the Senate – further bulletins as events warrant.

and finally

If you’ve been hoping to purchase CBD from Amish vendors, you are in luck.

Stay safe and be well everyone – we’ll be off next week, so we’ll see you again on May 21.

Recently, when dismissing a job-applicant’s disability discrimination claims brought under California state law, the U.S. District Court for the Central District of California issued two welcome reminders to employers.  First, an employer can condition an offer of employment on the completion of a preemployment drug screen, including a test for marijuana. This is true even though California has legalized marijuana for both recreational and medical purposes.  Second, an employer is not under any obligation to engage in the interactive process before an applicant passes a pre-employment drug screen.

Case Summary

In Espindola v. Wismettac Asian Foods, Inc., Case 2:20-cv-03702 (C.D. Cal. Apr. 28, 2021), Plaintiff applied for and was offered a position with the Company. Before Plaintiff started work, the Company contacted him to schedule a preemployment drug screen, which was required of all new-hires.  In response, Plaintiff stated that he needed to take care of some personal issues, and could not take the preemployment drug screen before his first scheduled work day.  Thereafter, and before starting work, Plaintiff applied for a medical marijuana card in the state of Florida.

The day before Plaintiff was scheduled to start working, he completed a “personnel information sheet,” on which he indicated he was not “disabled.”  The next day, he met with Human Resources.  During the meeting, Plaintiff signed a drug testing consent form, and disclosed for the first time that he had “chronic back pain” and had been “prescribed” marijuana to treat his condition.  Critically, Plaintiff did not provide any other details or documents — such as a doctor’s note or medical records — to substantiate the nature of his condition or explain any limitations on his ability to perform his job.

The next day, Plaintiff’s request for a medical marijuana card was granted, and he forwarded the approval to Human Resources.  The HR team met with senior management, and all agreed that it was Company policy for everyone to submit to a preemployment drug screen.  Plaintiff subsequently took the required drug screen and tested positive for marijuana metabolites.  As a result, his employment was terminated for failure to pass the preemployment drug screen.

In response, Plaintiff filed suit, alleging, among other things, 1) wrongful termination based on a disability; 2) failure to accommodate a disabling condition; and 3) failure to engage in the interactive process, all in violation of the California Fair Employment and Housing Act (“FEHA”).  The Company moved for summary judgment on all of Plaintiff’s claims, which the Court granted in its entirety.

Regarding Plaintiff’s discriminatory discharge claim, the Court held that it failed for several fundamental reasons.  For starters, Plaintiff only disclosed that he purportedly suffered from “chronic back pain,” which was not sufficient to establish that he suffered from a disability as a matter of law.  Rather, to make such a showing, Plaintiff was required to submit details regarding his specific condition or, more significantly, how his chronic back pain “limited a major life activity.”  Plaintiff’s failure to provide these necessary details — along with his failure to submit any documentation to substantiate his purported condition — was fatal to his claim.

Yet even if Plaintiff could have established that he suffered from a disability, the Court held that his discharge claim still failed because the Company set out a legitimate nondiscriminatory reason for the termination of his employment — Plaintiff failed a preemployment drug screen — and Plaintiff could not show pretext.  Indeed, Plaintiff received notice of the Company’s drug screening policy before his employment started, and the Company required all employees to submit to a preemployment drug screen.  There was no evidence that Plaintiff was treated differently.

Moreover, the Court further explained that Plaintiff’s argument that the drug screen was “illegal” because it was administered after Plaintiff started working was simply wrong.  Crucially, Plaintiff received notice of the drug screen before starting work, and the only reason he took the drug screen after starting work was because he requested that the test be delayed so he could take care of some personal issues. He was not immune from the results of the preemployment drug screen based on the fact that he asked for and was allowed to take it after his employment began.

Finally, Plaintiff’s claims for failure to accommodate and failure to engage in the interactive process also failed for similar fundamental reasons.  Foremost, Plaintiff failed to establish that he was disabled.  Setting this fatal issue aside, these claims also failed because the Company was not under any obligation to engage in the interactive process before Plaintiff passed the drug screen, which was an express condition of employment.

Employer Takeaways

This decision comes as welcome news to California employers, and reaffirms that an employer may lawfully condition employment on the passage of a preemployment drug screen.  When making an offer of employment, employers would do well to provide written notice to the offeree that their employment is conditioned on taking and passing a drug screen, and should get the offeree’s agreement in writing.

For more information on this or any related topic, please contact the authors or your Seyfarth attorneys.

On April 28, 2021, Philadelphia Mayor Jim Kenney signed Bill No. 200625 which, effective January 1, 2022, prohibits employers from requiring prospective employees to undergo testing for the presence of marijuana as a condition of employment. Currently, only New York City and Nevada have similar drug testing restrictions, but we expect this trend to continue. Nevada prohibits employers from taking adverse action against applicants who test positive for marijuana, with exceptions for, among other jobs, safety-sensitive positions and motor vehicle drivers who are subject to testing under state or federal law.  New York City, with some similar exceptions, also bars employers from requiring applicants to submit to testing for marijuana.

There are exceptions to the new Philadelphia bill. Specifically, the prohibition does not apply to individuals applying to work in the following positions or professions:

  • Police officer or other law enforcement positions;
  • Any position requiring a commercial driver’s license;
  • Any position requiring the supervision or care of children, medical patients, disabled or other vulnerable individuals;
  • Any position in which the employee could significantly impact the health or safety of other employees or members of the public, as determined by the enforcement agency and set forth in regulations pursuant to the bill.

It also does not apply to drug testing required pursuant to:

  • Any federal or state statute, regulation, or order that requires drug testing of prospective employees for purposes of safety or security;
  • Any contract between the federal government and an employer or any grant of financial assistance from the federal government to an employer that requires drug testing of prospective employees as a condition of receiving the contract or grant; or
  • Any applicants whose prospective employer is a party to a valid collective bargaining agreement that specifically addresses the pre-employment drug testing of such applicants.

The bill requires the agency tasked with enforcement responsibility to promulgate regulations for the implementation and administration of the new requirements.

In a time where marijuana legalization is rapidly expanding, all employers should reassess their workplace drug testing policies to be sure they are in compliance with existing and soon to be effective laws. This rapidly evolving legal landscape presents new challenges for employers, especially multi-state employers. Employers must balance complying with conflicting federal, state, and local laws, maintaining a safe work environment, and protecting applicants’ and employees’ privacy and other legal rights.

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Legislation to implement cannabis legalization moves forward in Montana.  Florida’s ballot initiative runs into trouble.  The South Dakota Supreme Court heard oral argument in the lawsuit seeking to overturn legalization.  The NFL won’t test for marijuana use in the off-season.  And finally, will we see hemp at the United States Botanic Garden?

montana

We begin today’s post in Big Sky country.  Montana was one of several states to legalize cannabis through a ballot initiative last year, and legislators have been working on legislation to implement the initiative.  As we’ve reported before, the path has not always been smooth.  Finally, the legislature sent a bill to the governor earlier this week, which he is expected to pass.

florida

Florida’s chances for a ballot initiative took a hit this week.  The state’s Supreme Court ruled that language proposed by Make It Legal Florida failed to inform voters that cannabis is illegal under federal law and would remain illegal, even if the ballot initiative passed.  So it’s back to the drawing board for legalization supporters.

south dakota

The continuing saga that is South Dakota’s path to legalization took another turn this week.  The state’s Supreme Court heard oral arguments this week on whether Amendment A is unconstitutional and should be struck down.  Opponents of the measure, including Governor Kristi Noem (R), claim that the initiative contains more than one subject, and thus cannot stand.  No word on when we can expect a ruling.

nfl drug testing

NFL players are free to smoke a joint or eat a brownie this off-season, as the league has announced they will not be testing for THC until the preseason.  The policy is part of the collective bargaining agreement negotiated last year.

and finally

Rep. Eleanor Holmes North (D-DC), along with Reps. Barbara Lee (D-CA) and Earl Blumenauer (D-OR) would like to see some hemp on display at the U.S. Botanic Garden.  The three sent a letter to the institution recently, noting that hemp is now legal, and has a long history of use in the country.  Rep. Norton suggested it might find a home in the “Medicinal Plants” section.

Stay safe and be well everyone – we’ll see you next week!

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

The SAFE Banking Act passes the House – again.  A bill to allow veterans access to medical cannabis gains interest.  Marijuana legalization polls favorably.  Idaho is (again) in the news.  And finally, if you’re looking for cannabis-themed license plates, Colorado has what you need.

SAFE BANKING ACT

They say everything old is new again, and the adage certainly holds for cannabis banking.  The House passed the SAFE Banking Act this week by a vote of 321-101.  If that sounds familiar, it should.  The House passed the Act in 2019, as we reported here.  It also appeared in various House versions of COVID relief packages.  And every time, the measure went nowhere in the Senate.  But, you’ll recall, the Senate is now under new management.  Will the Democrats be able to find ten Republicans to join them in enacting this legislation?  Will they be able to keep all of their own members on board?  Never say never, but we’re not holding our breath.  If reluctant lawmakers need any encouragement, they might find comfort in the support of various governors, banking associations and state treasurers.

medical cannabis for veterans

In other throwback legislation news, the Veterans Medical Marijuana Safe Harbor Act is back.  Introduced in the last Congress, it went nowhere, but perhaps this time will be different?  As with banking, support from Republicans will be crucial to passage.  The House version of the bill has bipartisan support, but the Senate version, as of this blogging, does not.

marijuana – we really, really like you

Over the years, Americans have become less opposed to the legalization of cannabis.  A new poll from Quinnipiac University shows that support for adult-use is now more than 50% in all demographics: age, race, level of education, gender, political party.  Overall support stands at 69%.

idaho

If you clicked on the link above, you’ll have noticed the reporting on the poll came from an Idaho group backing the Idaho Medical Marijuana Act.  So let’s check in on the Gem State (yeah, we thought it would be the Potato State too) and see what’s happening.  The governor signed a bill legalizing hemp.  The legislature voted down a bill that would have made legalizing marijuana almost impossible.  Wow – sounds like Idaho is warming up to cannabis, doesn’t it?  Well, think again.  The governor just signed a bill making it harder to put referendums on the ballot.  The governor said he signed the bill to prevent “urban voters” from having too much say in the initiative process.

and finally

Colorado decided to celebrate 4/20 and raise money for a good cause by auctioning off rights to cannabis-themed license plates.  The plate that raised the most money was “ISIT420” with a winning bid of $6630.  Proceeds will benefit the Colorado Disability Rights Funding Committee.

Stay safe and be well everyone – we’ll see you next week!

Adult-use cannabis legalization was passed in New York State when Governor Andrew Cuomo signed the Marijuana Regulation & Taxation Act (the “MRTA”) into law on March 31, 2021, after the Governor had previously attempted to include the legalization of adult-use cannabis in his last three budget proposals. The MRTA is expected to create significant economic opportunities for New Yorkers and the State, which should help the State generate some much needed tax revenue  to address the budget shortfalls resulting from the Covid-19 pandemic. The Governor’s office estimates that legalization could create 30,000 to 60,000 new jobs and the tax collections from the adult-use cannabis program could reach $350 million annually.

In order to raise the projected revenue while furthering the stated policy goals of helping those from disproportionately impacted communities and community reinvestment, New York took a novel approach to taxation of cannabis. The Act implements a new cannabis tax structure imposing a tax per milligram of tetrahydrocannabinol, better known as THC, the active chemical found in cannabis, with a tiered rate structure depending on final product type. Section 493(a) of the MRTA provides that adult-use cannabis products sold by a distributor to a retailer will be taxed at the following rates based upon the amount of total THC, as reflected on the product labels:

(1) cannabis flower at five-tenths of one cent (0.5) per milligram;

(2) concentrated cannabis at eight-tenths of one cent (0.8) per milligram; and

(3) cannabis edible product at three cents (3.0) per milligram.

In addition to the unique tax imposed by product type, Subsections (b) and (c) of Section 493 further impose a retail tax of nine (9%) percent upon the sale of adult-use cannabis products, as well as an additional four (4%) percent going to the local cities, counties, towns, or villages.

Of the 18 states that have legalized recreational marijuana to date, Illinois is the only other state to incorporate a potency based tax structure, imposing a 25% tax rate for cannabis products with THC concentration above 35%, and only 10% for products that fall below the threshold. While this hybrid product-specific taxation model has yet to be widely tested across the patchwork of individual state cannabis markets and frameworks, there are similarities to the taxation of the alcohol industry. However, taking such an unprecedented and granular approach to cannabis taxation could further delay the much-anticipated start date for legal sales, already unlikely to occur for close to two years, by adding an administrative hurdle requiring product-specific testing and potency labeling by regulators.

There is much still unknown about the timing, specific regulations, and licensing requirements to be promulgated by the newly created Office of Cannabis Management (OCM), governed by a Cannabis Control Board, which will oversee and implement the law, and whether there may be administrative complications arising from the taxation model. In the event logistical or other administrative difficulties complicate the rollout, it should be noted that the MRTA provides that the Board, no later than January 1, 2023, will be required to make recommendations to lawmakers regarding “the appropriate level of taxation of adult-use cannabis” and could potentially address any concerns with the taxation model.

Following closely on the heels of both New York and New Jersey enacting recreational cannabis laws, New Mexico and Virginia have enacted their own laws allowing adults to use cannabis for recreational purposes. Virginia went further by enacting the first law providing employment protections to individuals using cannabis oil. Although not immediately effective, New Mexico and Virginia employers should immediately assess the implications of the laws on their current policies and drug testing practices.

Virginia’s Cannabis Oil Law

In late March 2021, Virginia amended the state’s medical cannabis law to prohibit discrimination against lawful users of medical cannabis oil, which is defined to mean: any formulation of processed cannabis plant extract, which may include oil from industrial hemp extract acquired by a pharmaceutical processor pursuant to state law; or a dilution of the resin of the cannabis plant that contains at least five milligrams of cannabidiol (CBD) or tetrahydrocannabinolic acid (THC-A) and no more than 10 milligrams of delta-9-tetrahydrocannabinol (THC) per dose. The term does not include industrial hemp, as defined in state law, that is grown, dealt, or processed in compliance with state or federal law, unless it has been acquired and formulated with cannabis plant extract by a pharmaceutical processor.

The law, which becomes effective July 1, 2021, states:

  • No employer shall discharge, discipline, or discriminate against an employee for their lawful use of cannabis oil pursuant to a valid written certification issued by a practitioner for the treatment or to eliminate the symptoms of the employee’s diagnosed condition or disease pursuant to the state’s cannabis oil law.
  • Notwithstanding this prohibition, the law does not (i) restrict an employer’s ability to take any adverse employment action for any work impairment caused by the use of cannabis oil or to prohibit possession during work hours, (ii) require an employer to commit any act that would cause the employer to be in violation of federal law or that would result in the loss of a federal contract or federal funding, or (iii) require any defense industrial base sector employer or prospective employer, as defined by the U.S. Cybersecurity and Infrastructure Security Agency, to hire or retain any applicant or employee who tests positive for THC in excess of 50 ng/ml for a urine test or 10 pg/mg for a hair test.

Virginia Recreational Cannabis Law

Beginning on July 1, 2021, the Virginia Cannabis Control Act (CCA) will allow those 21 years of age or older to possess up to one ounce of cannabis and to cultivate up to four cannabis plants per household for personal use. Retail sales will not begin until January 1, 2024. However, some advocates continue to push for an earlier start to retail sales, particularly for already-established dispensaries.

The CCA does not directly address drug-free workplaces, though it acknowledges that cannabis causes impairment and prohibits driving while under the influence of cannabis. We have no reason to doubt that employers can still prohibit cannabis and impairment at their worksites, but we will monitor developments in that state to see whether it may issue further guidance in this area.

New Mexico Recreational Cannabis Law

On April 12, 2021, New Mexico Governor Michelle Lujan Grisham signed the state’s recreational cannabis law. It is effective in late June 2021. While the law does not provide employment protections to recreational users, New Mexico employers still must be mindful of the protections afforded to those using cannabis for medicinal purposes.

The law states that it does not:

  • Prohibit an employer from taking an adverse employment action against an employee who is impaired by, possessing, or using cannabis at work or during work hours.
  • Require an employer to commit any act that would cause it to be noncompliant with or in violation of federal law or federal regulations or that would result in the loss of a federal contract or federal funding.
  • Prevent or infringe on an employer’s rights to adopt and implement a written zero-tolerance policy regarding cannabis use, which may allow for the discipline or termination of an employee on the basis of a positive drug test that indicates any amount of THC or its metabolites.

The law does not apply to employees who are subject to the provisions of the Federal Railway Labor Act and should not be construed to interfere with any collective bargaining agreement between the employer and a labor organization representing its employees.

Next Steps for Employers

Employers should monitor developments surrounding these new laws and stay aware of regulatory developments that further address impacts the laws may have on workplaces in New Mexico or Virginia.  Employers also should consider reviewing and revising their drug and alcohol free workplace policies and practices to ensure compliance in New Mexico, Virginia and the many other states with such laws.

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

The big news this week is that New Mexico legalized adult-use marijuana.  Mississippi’s medical cannabis program faces a state Supreme Court challenge.  And South Dakota’s program is also having its day in court.  Idaho may legalize hemp.  And finally, Uber may get into the marijuana delivery business.

New mexico

New Mexico Governor Michelle Lujan Grisham (D) signed a bill legalizing adult-use cannabis this week.  This brings the total to 21 states and territories where marijuana is fully legal. Possession of up to two ounces and home grow will be allowed as of June 29, with sales to begin in April 2022.

mississippi

Not that legalization will necessarily lead to smooth sailing.  In fact, sometimes it lands you in court.  Take Mississippi, for example.  Medical marijuana won support from 70% of the voters in November, a hefty majority.  So what’s the problem?  Due to the legislature’s failure to update the state’s ballot initiative rules, opponents of the bill make the argument that the initiative is invalid.  The state’s Supreme Court promised to rule soon – further bulletins as events warrant.

south dakota

And it’s not just Mississippi.  The South Dakota Supreme Court will hear oral argument in a challenge to the state’s adult-use ballot initiative later this month.  Opponents claim that the initiative covered two topics: legalization and setting up a way to legalize.  This, they argue, violates the law requiring ballot initiatives to cover one topic only.

idaho

Remember when the federal government legalized hemp?  Did you think the states would have legalized the crop by now?  Well, if you did, you’d be mostly right.  But there’s always one in a crowd, and when it comes to hemp, Idaho is that one.  That could be about to change.  This week, the legislature passed a bill allowing hemp, which is on its way to the governor’s desk.

and finally

After more than a year of COVID, we’re all gotten pretty used to having things delivered.  But what about cannabis?  Uber CEO Dara Khosrowshahi says the company would start bringing cannabis products to your doorstep, if federal regulations permitted.

Stay safe and be well everyone – we’ll see you next week!

On March 31, 2021, New York legalized the recreational use of cannabis, enacting “The Marijuana Regulation and Taxation Act.”

This new law legalizes personal possession of cannabis, home cultivation of cannabis, and allows for the expungement of certain marijuana convictions. Importantly, it also modifies New York Labor Law to impose new restrictions on employers.

New York’s cannabis law provides employment discrimination protection for cannabis users.  Cannabis use is now part of the “off-duty” conduct for which employers cannot take an adverse employment action, similar to off-duty political activities and the like.  Under the amended Section 201-d(2) of the Labor Law, it is now unlawful for an employer to refuse to hire, terminate, or “otherwise discriminate” against an individual for that individual’s use of cannabis, as long as it is within state law.

The new cannabis law carves out three exceptions for employers to take an employment action because of an individual’s cannabis use. Two of the exceptions allow an employer to take an employment action based on an individual’s cannabis use where required by federal or state law, or where federal contracts or federal funding are implicated.

The third exception allows employers to discipline or terminate employees who are impaired at work.  Employers are allowed to take an adverse employment action against an employee who, while at work, “manifests specific articulable symptoms” of impairment from the use of cannabis.  These symptoms could either hurt the employee’s work performance or generally interfere with the employer’s safe and healthy work place.

As a consequence, employers cannot rely on drug tests nor can they rely on knowledge that an employee uses cannabis outside of work to discipline their employees.  Instead, managers and supervisors should be aware of the physical symptoms of possible cannabis impairment.  Employers should also consider adding policies for reporting symptoms of cannabis impairment so that the business is prepared to be able to take adverse employment action if an employee exhibits symptoms of cannabis impairment.

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Federal legislation to legalize cannabis is under consideration.  In state news, Virginia moved up its timeline to legalize possession and home grow.  New York launched a cannabis control website.  We take a look at what’s happening in Montana.  South Carolina probably won’t legalize medical marijuana.  And finally, only cannabis could unite Snoop Dogg and Charles Koch.

federal legislation

Senate Majority Leader Chuck Schumer (D-NY) supports federal decriminalization that would allow states to legalize.  Senators Cory Booker (D-NJ) and Ron Wyden (D-OR) are working with Schumer to draft a bill.  So where is the President on this?  According to Vice President Kamala Harris, the administration has been too busy to give the matter much attention.  Seems like Congress needs to do the heavy lifting, if they want a bill enacted.

Virginia

The Virginia legislature agreed to Governor Ralph Northam’s changes to its marijuana bill on Wednesday, moving up the timeline for legalization.  This means that possession and home cultivation of small amounts of cannabis become legal on July 1 of this year.  Retail sales, however, won’t begin until 2024.

new york

The Empire State’s Office of Cannabis Management website is up and running.  The governor’s office announced the website launch late last week.  It educates the public on state regulations, and provides information on both medical cannabis and adult-use cannabis licensure.

montana

Regular readers doubtless recall that Montana was one of several states to legalize marijuana in November.  So how’s the implementation going in Big Sky Country?  It’s complicated.  The House of Representatives passed three different bills this week that would tax sales at different rates and use the money raised for different purposes.  Now the bills move onto the Senate.  Further bulletins as event warrant.

south carolina

The prospects for medical marijuana legalization in South Carolina look bleak.  So what’s the holdup?  Sen. Greg Hembree (R-Myrtle Beach), who opposes the bill, announced this week that he will block the legislation.  Rules require a three-fifths vote to override this move, and the bill’s backers are doubtful they can muster that much support.

and finally

Snoop Dogg’s work with Martha Stewart is well known to fans of cooking shows and The Puppy Bowl.  But that unlikely pairing is nothing in comparison to his latest strange bedfellow.  The rapper started the Cannabis Freedom Alliance with Charles Koch, the libertarian billionaire known for opposing environmental regulation.  On marijuana however, the Chairman and CEO of Koch Industries is all green.  The third member of the founding group is criminal justice reform advocate Weldon Angelos, head of the Weldon Project.