Marijuana Legalization Rundown: New Legislation Across Several States

There has been a recent flurry of movement – both in the courts and in state legislatures – on the marijuana law front across several states.  As we previously reported, on February 22, 2021, New Jersey Governor Phil Murphy signed three separate cannabis reform bills into law (NJ A21, NJ A 1897, and NJ A5342/NJ S3454), formally legalizing the use and possession of recreational marijuana in the Garden State.  The new laws contain express workplace-related provisions that impact New Jersey employers by establishing non-discrimination rules for recreational cannabis users or marijuana users, codifying that employers do not have a duty to accommodate cannabis use in the workplace, and establishing procedures for employee drug testing.  The laws’ employment provisions were effective immediately, but they do not become operative until the New Jersey Cannabis Regulatory Commission (“CRC”) adopts implementing regulations.

As we have also reported, on March 31, 2021, New York Governor Andrew Cuomo signed a bill legalizing recreational cannabis in the state of New York, effective immediately.  Among the many changes that this new legislation brought were amendments to and expansion of New York’s lawful off-duty conduct law to protect cannabis use by employees when they are not on the job.  This statewide change follows New York City’s April 2019 ban on pre-employment cannabis testing, which deems screening for marijuana or THC as a condition of employment to be an unlawful discriminatory practice, with limited exceptions.

Other jurisdictions are catching up to the marijuana law frenzy.  From East Coast to the South, Midwest, and Southwest, state lawmakers have legalized cannabis and restricted employers from making employment decisions based on employees’ and prospective employees’ use of marijuana.  Here’s a round-up of the most recent developments:

New Laws

Alabama

On May 17, 2021, Alabama Governor Ivey signed the Darren Wesley ‘Ato’ Hall Compassion Act (“Hall Act”).  Named in honor of the son of an Alabama lawmaker who had passed away at age 25, the Hall Act legalized certain forms of medical marijuana, but explicitly stated that Alabama has no plans to authorize recreational use of marijuana.

The Hall Act restricts legal usage to that of cannabis products (not hemp) that can be ingested – for example, by tablet or non-sugarcoated gummy – topical products, suppository, transdermal patch, or by nebulizer.  The Hall Act expressly does not allow for the use of cannabis products that are smoked or vaped, baked goods, or candies.  Patients may be certified and receive medical marijuana cards only for certain enumerated “qualifying medical condition[s],” including, but not limited to, cancer treatment side effects, HIV/AIDS-related nausea or weight loss, other illnesses causing nausea, complications related to multiple sclerosis, and/or “[a] condition causing chronic or intractable pain in which conventional therapeutic intervention and opiate therapy is contraindicated or has proved ineffective.”  The Hall Act establishes the Alabama Medical Cannabis Commission, which will, among other things, implement a medical marijuana program in the state and provide an annual report to the state legislature about the implementation of the law.

Despite providing some protections for medical marijuana users, the Hall Act does not require employers “to permit, accommodate, or allow the use of medical cannabis, or to modify any job or working conditions of any employee who engages in the use of medical cannabis.”  The Hall Act also does not prohibit employers from “refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action” as a result of the worker’s medical marijuana use.  An employer may take an adverse action against a medical marijuana user regardless of impairment or lack of impairment, and regardless of whether the worker’s medical marijuana use is the sole reason or a factor in the employer’s decision to take an adverse employment action. Further, the Hall Act does not create a right of action for adverse employment measures taken on the basis of medical marijuana use.  In fact, the law provides that a worker whose employment is terminated for using medical marijuana or refusing to take a drug test may, in some circumstances, be “legally conclusively presumed to have been discharged for misconduct.”

The Hall Act does not affect workers’ compensation premiums or discounts, or an employer’s ability to assert defenses related to workers’ compensation benefits based on the results of a worker’s drug test.  Employers are not prohibited from establishing or enforcing drug testing policies, including drug-free workplace policies, or requiring a worker to disclose that they are a medical marijuana card holder.  The Hall Act does not affect employment restrictions imposed by the Department of Transportation, nor does it specifically address represented workers.

Connecticut

Joining its tristate neighbors of New York and New Jersey, Connecticut became the 19^th state to legalize recreational marijuana use when Governor Ned Lamont signed legislation into law on June 22, 2021, decriminalizing possession or use of a limited amount of cannabis by adults aged 21 or older as of July 1, 2021.

While adult possession in Connecticut is now legal, portions of the cannabis reforms will phase in, including those affecting Connecticut employers.  Starting October 1, 2021, all employers must prohibit all smoking, including the use of electronic nicotine and cannabis delivery systems (i.e., e-cigarettes or vaping devices), at all business facilities.  Previously, smoking bans were required only at workplaces with five or more employees and did not specifically include a prohibition on electronic smoking devices, and employers could have designated smoking rooms.

Other provisions that took effect July 1, 2022, include:

• The Act exempts certain employers and categories of employment, including (but not limited to) emergency responders, positions requiring operation of a motor vehicle or heavy machinery, security clearance, or jobs entailing the supervision or care of children, medical patients, or vulnerable persons.
• Employers covered by the Act do not have to allow employees to use or be under the influence of cannabis while at work, but employers must permit employees to possess (though not use) medical marijuana at work.
• Employers may establish written policies prohibiting employee use, possession, or consumption of recreational cannabis, and requiring drug testing. Such policies must be made available to current employees prior to enactment, and to prospective employees at the time of any job offer. Absent such policy, employers will be prohibited from terminating or taking any adverse action against employees or prospective employees on the basis of that person’s use, or lack of use, of cannabis products outside of the workplace, with exceptions for employers with federal contracts or other federal funding.
• With a few exceptions, a positive result for THC in a drug test will not be a permissible basis for a termination of employment or refusal to employ someone.
• Employees have a 90-day statute of limitations to pursue grievances of an employer’s alleged violations of the law. Remedies for prevailing plaintiffs include reinstatement, back wages, attorneys’ fees and costs.

Montana

On May 18, 2021, about six months after voters approved two ballot initiatives to legalize and regulate marijuana, Governor Greg Gianforte signed off on legislation that sets January 1, 2022 as the first day of legal cannabis sales in Montana, permitting adults aged 21 or older to possess, purchase, and cultivate limited amounts of cannabis and/or THC.  The new recreational marijuana law includes provisions prohibiting employers from refusing to hire or discriminating against a person on the basis of off-duty use of a “lawful product” outside of workplace premises.  There are, however, situations where even off-duty usage could be the basis for an adverse action against an employee.  For example, if off-duty marijuana usage interferes with an individual’s ability to perform a job, conflicts with a bona fide qualification reasonably related to a person’s occupation, or violates a contractual obligation requiring abstinence from marijuana, an employer could address such circumstances without running afoul of the state’s new law.  Montana law also does not require employers to permit or accommodate marijuana usage in any workplace, nor does it prohibit employers from disciplining an employee for intoxication by marijuana products while working or for any other violation of a workplace drug policy.  Montana employers should review any pre-employment drug screening requirements as well as employee drug testing policies in light of the forthcoming changes.

New Mexico

Since June 29, 2021, adult recreational use of marijuana has been legal in New Mexico. On April 12, 2021, Governor Grisham signed the state’s recreational marijuana bill – the Cannabis Regulation Act (“CRA”) – into law.  The CRA provides several explicit protections for employers. For example, unless otherwise agreed to between the employer and worker, employers may “prohibit and take an adverse employment action” on the basis of a worker’s impairment, possession, or use of “intoxicating substances.”  Employers do not have to take any action that would violate federal law or that would result in the loss of a federal contract.  Additionally, the law does not “prevent or infringe upon the rights of an employer to” have and maintain written zero-tolerance policies about the use of cannabis products, including imposing discipline up to and including termination for a positive drug test.  Employers may take adverse employment action on the basis of the possession or use of marijuana at work or during work hours.

With regard to represented workers, the CRA does not “invalidate, diminish or otherwise interfere with any collective bargaining agreement” or the bargaining powers of any party to a collective bargaining agreement.  Note that the CRA does not apply to Title II of the Railway Labor Act, which concerns air carriers.

Philadelphia, PA

Effective January 1, 2022, Philadelphia will join New York City in prohibiting employers, labor organizations, and employment agencies, and all of their agents, from requiring job applicants to submit to a marijuana drug test as a condition of employment, making such a drug test an “unlawful employment practice.”  There are, however, several exceptions to the law.  For example, the prohibition will not apply to workers in the following safety-sensitive positions: police officers or those in other law enforcement positions; any position requiring a commercial driver’s license; any position that includes the supervision or care of children, medical patients, disabled or other vulnerable people; any position where the worker may significantly impact the health and/or safety of other workers and/or members of the public, as determined by the enforcement agency, and pursuant to the law.

Furthermore, the prohibition on pre-employment marijuana drug testing does not apply to certain required drug testing, including: drug testing required by any federal or state statute, regulation or order that requires such drug testing for safety or security reasons; any contract between the federal government or an employer; and any prospective worker who is party to a valid collective bargaining agreement that specifically addresses pre-employment drug testing of applicants.

In advance of January 1, 2022, Philadelphia employers should evaluate their pre-employment drug testing policies, determine whether any of the positions are exempted from the ordinance, and prepare to cease pre-employment drug screening for marijuana, where necessary.

Virginia

In April 2021, Virginia became the 16th state to legalize recreational use of marijuana. Effective July 1, 2021 – a date accelerated by amendments made by Governor Ralph Northam and approved by the legislature – adults over 21 years of age may possess up to an ounce of marijuana and engage in at-home growing of marijuana.  The retail sale of marijuana in Virginia, however, will not begin until January 1, 2024.  Under Virginia’s recreational marijuana law, the newly-formed Virginia Cannabis Control Authority will implement regulations for the state’s marijuana industry.

Virginia’s recreational marijuana law does not address any obligations or protections in the employment context.  Virginia employers may need to wait for regulations issued by the Virginia Cannabis Control Authority to determine how the new recreational law affects the workplace.

Additionally, on July 1, 2021, new protections for workers under amendments to Virginia’s medical marijuana law took effect.  Under these amendments, employers may not take adverse employment action or discriminate against workers’ lawful use of medical cannabis oil.  Employers may still, however, take an adverse employment action against workers who are impaired while at work.  Employers may also “prohibit possession” during work hours.  The amendments also clarify that employers are not required to take action that would violate federal law, or result in the loss of a federal contract or federal funding.  The amendments specifically qualify that they do not “require any defense industrial base sector employer or prospective employer, as defined by the U.S. Cybersecurity and Infrastructure 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.”

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Employers and health care professionals should prepare to address issues that may arise from the potential conflict between state and federal law in devising compliance, both in terms of reporting and human resources issues.  As states and localities increasingly permit the lawful use of medicinal and recreational marijuana, and prohibit certain pre-employment practices, employers – and particularly those with multi-state operations – must review and evaluate their current policies with respect to marijuana use by employees, prospective employees and patients.

* América Garza, a 2021 Summer Associate (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.