As cannabis growers and retailers struggle with the complex and onerous regulatory scheme governing California’s emerging legal marijuana marketplace, they may be excused for overlooking the requirements of California Safe Drinking Water and Toxic Enforcement Act of 1986—more commonly known as Proposition 65.  Neither the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), nor its implementing regulations, reference or suggest that cannabis growers or retailers are subject to Proposition 65.  Yet, Proposition 65 plainly applies to cannabis and cannabis products, and ignorance of its requirements can prove costly to fledgling and established cannabis businesses alike. Continue Reading Proposition 65: Yet Another Challenge for California Cannabis Businesses to Bend Their Minds Around

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

The big news on the federal level was the reintroduction of the SAFE Banking Act, by sponsor Ed Perlmutter, a Democrat from Colorado.  Lest you think this is strictly a measure supported by Democrats from states with legal recreational marijuana, know that several Republicans and legislators from states that have not yet legalized are also co-sponsors.

As for the states, there was lots of movement this week on the legalization front.  In New Mexico, the House passed a compromise bill that would allow adult use; now it goes to the Senate.  Meanwhile, in New Jersey, the governor and Democratic legislators have reached an agreement in principle to legalize recreational cannabis.

What about New York? Well, it looks as if it won’t be the next state to legalize.  Gov. Cuomo is walking back expectations that a deal will happen in the next couple of weeks.  To continue with our survey of activity in the “New” states, the New Hampshire House has passed a bill to allow medical marijuana patients the ability to grow cannabis at home.

And the NFL is thinking of changing its policies around marijuana in the next collective bargaining agreement.  Does that mean that teams in states that have legalized cannabis would have an advantage in keeping or attracting players?

And finally, in a bit of generational irony, it turns out that the generation least likely to support legal marijuana is Boomers.  Clearly, we are a long way from Woodstock.

See you next week!

An Arizona federal district court judge entered judgment against Walmart Inc. for terminating the employment of a woman who had been prescribed medical marijuana because it had not established through expert evidence that the employee was impaired by marijuana at work despite high levels of marijuana in the results of her drug test.  Therefore, the court held plaintiff’s termination was contrary to the Arizona Medical Marijuana Act, A.R.S. § 36-2813(B) (“AMMA”).

Case Background

In Whitmire v. Walmart Inc., the plaintiff Carol Whitmire had worked at Walmart since 2008, initially as a Cashier and thereafter as a Customer Service Supervisor.  During her employment Walmart had a drug testing policy which expressly stated that employees were prohibited from “[r]eporting to work under the influence of drugs or alcohol, including medical marijuana.”  Walmart’s policy also required employees to submit to a drug or alcohol test if they suffered a workplace injury that required medical treatment.  Plaintiff was aware of Walmart’s drug testing policy and acknowledged her understanding of the policy.

On May 21, 2016, plaintiff reported to Walmart that a bag of ice fell on her wrist while at work, and two days later, she notified Walmart that she experienced continued swelling and pain in her wrist.  On May 24, 2018, around approximately 2 a.m., plaintiff smoked medical marijuana for an alleged non-work related condition prior to going to sleep.  Later that same day at 2 p.m., plaintiff began her scheduled shift at Walmart and reported to human resources that her wrist still hurt.  Plaintiff left her shift because Walmart directed plaintiff to urgent care pursuant to its policy.  Plaintiff received an x-ray of her arm, submitted a urine sample for a post-accident drug test, and then returned to work.  After returning to work, plaintiff advised Walmart for the first time that she possessed a medical marijuana card and provided a copy.

Plaintiff’s drug screen tested positive for marijuana metabolites, and Walmart concluded that upon reasonable belief, the high levels of marijuana metabolites recorded in her positive test indicated that she was impaired by marijuana during her shift earlier that same day.  Walmart suspended and eventually terminated plaintiff citing the positive drug test as the reason.

Plaintiff filed a lawsuit in the United States District Court for the District of Arizona asserting that she was terminated and discriminated against in violation of the AMMA and other state laws.  Walmart denied that it wrongfully terminated or discriminated against plaintiff and asserted an affirmative defense that it had “established a policy and implemented a drug testing program” in compliance with the Arizona Drug Testing of Employees Act, A.R.S. § 23-493.06 (“DTEA”).

Walmart moved for summary judgment, arguing, among other arguments, that the AMMA did not provide plaintiff with a private cause of action against Walmart.  Additionally, Walmart argued that it was entitled to judgment as a matter of law because it terminated plaintiff based on the results of a drug test taken during her shift, which showed that plaintiff had marijuana metabolites at the highest level the test could record, and which gave Walmart a good faith basis to belief plaintiff was impaired by marijuana during her work shift.  The State of Arizona filed an appearance and an amicus curiae brief.

The District Court of Arizona’s Ruling

After considering decisions from numerous other courts that considered whether their respective state medical marijuana laws created an implied cause of action against employers, the District Court held that the AMMA implied a private cause of action because no other remedy for violation of the statute was available.

The District Court next decided whether a genuine issue of material fact existed as to plaintiff’s discrimination claims.  The District Court agreed with Walmart that an employer was allowed to establish a policy and drug testing program under the DTEA, which shields an employer from liability for “actions based on the employer’s good faith belief” that an employee was working while under the influence of drugs.  Additionally, the court held that, reading the AMMA and the DTEA in conjunction, a registered user of medical marijuana may be considered to be “under the influence of marijuana based solely on the presence of ‘metabolites or components of marijuana’ that appear in sufficient concentration to cause impairment.”

Walmart argued that the level of marijuana metabolites present in plaintiff’s drug screen results led Walmart to believe she was impaired at work. Walmart produced a declaration from its Personnel Coordinator in which the coordinator stated that the level of marijuana metabolites found was the “maximum reading the test can measure for marijuana.”  However, the court determined that proving impairment based on the results of a drug test was a “scientific matter” which required expert testimony and the Personnel Coordinator did not have the “requisite ‘knowledge, skill, experience, training or education’ to render opinions regarding the results of the Plaintiff’s drug test.”  Furthermore, the court held that Walmart was unable to prove that plaintiff’s drug test results were “so positive” that it had sufficient reason to believe that plaintiff was impaired while at work without expert testimony to establish impairment.  Therefore, the District Court sua sponte entered judgment in favor of the plaintiff because it determined there was no evidence that plaintiff was impaired at work.

Finally, the court held that plaintiff’s disability discrimination claim failed because she was not disabled.  Plaintiff’s claim that she was disabled or regarded as disabled because she qualified for a medical marijuana card was insufficient evidence of a disability.  Furthermore, the court followed precedent in the Third and Seventh Circuits and held that the side effects from smoking medical marijuana do not constitute a disability.

Takeaways for Employers

More than 30 states have legalized medical marijuana, and 10 states and Washington D.C. have legalized recreational use.  Yet, marijuana remains a Schedule I controlled substance under federal law, and the legal implications of marijuana medical and recreational marijuana use are ever-evolving.  If you have any questions regarding this area or need assistance evaluating personnel decisions relating to employees and marijuana use, please contact the author, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Cannabis Law Practice.

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

Let’s start with politics, with the latest in the “Where The Candidates Stand on Marijuana” series.  Senator Cory Booker (D – NJ)  has introduced the Marijuana Justice Act of 2019 that would legalize cannabis at the federal level, remove it from the schedule of controlled substances and expunge federal marijuana-related criminal records.

The biggest news from the states came from Florida, where legislation has been introduced to legalize recreational marijuana.  Obviously, introducing a bill is a long way from opening stores, but it is a step in that direction.

Other states moving to legalize include New Hampshire, where the bill is progressing in the House before it moves to the Senate, but may have problems in the Governor’s office and Vermont, where recreational use is already legal, but buying and selling is not.  This legislation would set up a retail marketplace.

Legalizing cannabis doesn’t necessarily mean smooth sailing, as the state of Michigan is finding out.  The governor has abolished the board that approves or denies applications for licenses for medical marijuana businesses and a new agency will take its place.

The Food and Drug Administration will convene a public meeting to discussion CBD regulation in April.  Of course, the FDA’s chief, Scott Gottlieb, is resigning in April, so the exact date of the meeting is now up in the air.

In international news, the Caribbean nation of St. Kitts and Nevis has announced changes in their cannabis laws: medical marijuana will now be legal and recreational use will be decriminalized.  Meanwhile, Switzerland has announced that it will begin a 10-year study of recreational marijuana; we’ll check back in with them towards the end of the next decade.

And if you were wondering what Martha Stewart’s latest business venture is, wonder no longer.  She is forming a CBD partnership with Canopy Growth.  Their first products will be pet remedies.  Who brought these two together?  Snoop Dogg, of course.

See you next week!

It is well known that the U.S. Patent and Trademark Office (USPTO) does not allow federal registration for cannabis-related trademarks (discussed by this blog here and here). Some commenters have speculated that, because courts have been chipping away at the bans on immoral, scandalous, and disparaging trademarks, the ban on federal trademark registrations related to illegal activity may be next. Continue Reading Likely to be Dazed and Confused: the Hazy Future of Cannabis-related Trademarks

Seyfarth Shaw LLP has released the results of its fourth annual Real Estate Market Sentiment Survey, which polled commercial real estate executives around the country from all sectors. Of interest to our readers, this year’s survey revealed that, despite the dramatic increase in the number of states legalizing marijuana, 85% of respondents are putting the brakes on investing in cannabis use real estate or leasing space to the cannabis industry. This is not surprising, given the current state of federal law, lack of credit availability from financial institutions, and lack of title insurance.

What about the other 15% who do plan on investing in CRE for marijuana use? Most (70%) do not plan to invest anytime soon, indicating an investment horizon of at least 2-5 years. Notably, however, 20% of those respondents planning to participate in the industry already have their hands in the pot business.

View the full survey results

 


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

Alaska was one of the first states to legalize cannabis, so it tends not to appear in the news very often.  However, the governor has put forward a proposal to disband the Cannabis Control Board, and this is not delighting those in the industry.

You may have read about the shipment of industrial hemp that was seized in Idaho recently.  After losing their case in federal district court, Big Sky Scientific has appealed to the Ninth Circuit.  Further bulletins as events warrant.

The last we heard from North Dakota, it had voted down legal recreational cannabis in last November’s election.  Just recently, however, the first medical marijuana dispensary opened in the state.

In other state news, the New Mexico House will be considering legislation to legalize recreational cannabis.  You will doubtless recall that we reported on the New Mexico Senate’s actions in this regard just last week.  Will New Mexico beat New York and Illinois to become the next state to legalize?

One of the difficulties in traveling while using medical marijuana is that dispensaries don’t generally accept out of state registrations.  Lawmakers in Florida have just introduced legislation to allow patients and caregivers from other states to obtain medical cannabis in the state.

Proposition 64, the law that brought legal marijuana to California, provided for the expungement of marijuana cases.  San Francisco is going to wipe out over 9,000 cases going back to 1975.

Finally, you might not think of the Oscars as being a source of cannabis news, but you’d be wrong.  First, an ad for marijuana was rejected by ABC.  But, cannabis infused products were included in the nominees swag bags.  #alwaysacannabisangle

See you next week!

 

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

Starting off in the international sphere, the European Parliament has passed a resolution recommending the descheduling of cannabis.  The hope is that this could lead to the establishment of bloc-wide medical marijuana laws.

In South Korea, medical marijuana will be legalized in March.

Among the states moving towards legalization of cannabis or medical cannabis are: Kentucky, Georgia, North Carolina, Wisconsin and Vermont (which currently has a “DC-style” system: you can grow it and you can use it, but you can’t buy it or sell it).

New Jersey’s move to legalize had been held up by tax considerations.  Now that those have been worked out, look for a bill to be introduced in the legislature in the near future.

The New Mexico Senate has approved a bill allowing the use of medical marijuana in schools.  The legislation now moves to the House.

Lawmakers from Maryland have formed a bipartisan group to study legalizing recreational cannabis in 2020.  The state currently allows the use of medical marijuana, which has generated $100 million in sales in its first year.

And speaking of sales, Pennsylvania’s medical cannabis program brought in $132 million in its first year.

One of the difficulties facing cannabis businesses  is the lack of access to financial services.  Alaska’s Credit Union 1 seeks to change that next month.

The United Parcel Service is less than happy over the logo used by United Pot Smokers.  The first UPS is suing the second UPS in federal court for trademark infringement.  If High Times suggests it’s time to drop the “sassy parody brands,” it probably is…

Finally, from the “I Could Have Told You That” files, researches have discovered a correlation between recreational marijuana laws and junk food sales.

Cannabidiol (CBD) competed with Vitamin C as a top ingredient in new cosmetic products this past year, with promises of having anti-inflammatory effects and other healing properties. Amid the hype, at the end of 2018, the Agriculture Improvement Act of 2018, P.L. 115-334 (the “2018 Farm Bill”) was signed into law, changing the marketing of hemp and derivatives of cannabis and further removing hemp from the Controlled Substances Act thereby making it no longer an illegal substance under federal law. See Section 297A. The 2018 Farm Bill amended the definition of “hemp” to specifically include “all derivatives, extracts, cannabinoids,” which has been construed as an attempt to include hemp-based CBD under the definition of industrial hemp. The 2018 Farm Bill allows, subject to certain restrictions, hemp cultivation, along with the sale, transport (including via interstate commerce), and possession of hemp-derived products. Continue Reading “C” is for…

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

Possibly the biggest news this week was the first ever Congressional hearing on cannabis banking.  From the hearing’s webpage, you can watch the hearing, read the committee’s memorandum and read the witnesses’ prepared statements.   The committee memorandum has a great graphic of state marijuana laws – only three states allow no marijuana consumption in any form.

And speaking of state laws, several jurisdictions are moving forward with some form of legalization.  A full legalization bill was introduced in the Illinois legislature; a full legalization bill was passed out of a Senate committee in Hawaii; a House committee in New Mexico has passed another such bill, but more committees will need to weigh in before the full chamber votes.

In New Yorkthose in favor of legalization are pushing for changes to Gov. Cuomo’s bill introduced last month.   And the City of Baltimore has decriminalized marijuana possession, even though recreational cannabis is not legal in the state of Maryland.

Although no bill has yet been introduced, the Lt. Governor of Pennsylvania meanwhile has embarked on a listening tour to gather input on whether that state should legalize.

And the federal bill with the easy-to-remember number has now been introduced in the Senate.  S. 420 is a companion bill to H.R. 420 introduced last month.

One of the arguments used in favor of legalization is the amount of sales (and sales tax) generated by legal cannabis.  Colorado is looking at $6 billion in sales in 2018, and Oklahoma‘s medical marijuana program saw over $4 million in January 2019.

Since people are starting to throw their hats in the ring for the 2020 Presidential election, here’s the first in what will doubtless become a series: “Where the Candidates Stand on Marijuana.”  Kamala Harris (D-CA) has indicated that she is in favor of legalization.

And finally, the Massachusetts marijuana industry may be getting some publicity from an unlikely source: billboards in Connecticut.