January 26, 2021

Volume XI, Number 26

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January 25, 2021

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Arizona and Three More States Approve Recreational Marijuana Use: Hashing Out What This Means for Employers (US)

For citizens of Arizona, Montana, New Jersey, and South Dakota, 11/3 may become another 4/20, as on Election Day, voters in those states approved initiatives to joining 11 other US states that previously decriminalized recreational adult use of marijuana.[1] Employers in those states however may not be as enthusiastic, since approval of recreational marijuana use undoubtedly will impact how they deal with applicants and employees when it comes to marijuana-related issues, as well as their overall approach to substance abuse and drug testing policies. It’s therefore important for employers to understand the implications these developments may have on how they approach the use of marijuana by their workforce. This post primarily focuses on the evolution of marijuana laws in Arizona, where medical marijuana use has been legal for nearly a decade, and examines what the recent legalization of adult recreational marijuana use means for employers in the state, which may also serve as an example of how other states may take on this issue since it appears that attitudes towards marijuana legalization are substantially shifting, signaling that more states may approve of similar measures in the future.

Following a ballot proposition approved by voters in 2010, the Arizona legislature passed Arizona Medical Marijuana Act (“AMMA”). Different from most states’ medical marijuana statutes, the AMMA goes beyond permitting medical marijuana to also set out explicit employment protections that prohibit employers from discriminating against employees and applicants who hold a valid medical marijuana use card. Specifically, under the AMMA, Arizona employers cannot refuse to hire an applicant nor fire or otherwise punish an employee based on the individual’s status as a registered medical marijuana cardholder. Protections under the AMMA are not without their limits, however, and employers are not required to accommodate medical marijuana use, possession, or impairment on their premises or during work hours. Indeed, a recent decision from an Arizona federal court confirmed that under the AMMA, “an employer cannot be sued for firing a registered qualifying patient based on the employer’s good-faith belief that the employee was impaired by marijuana at work, where that belief is based on a drug test sufficiently establishing the presence of ‘metabolites or components of marijuana’ sufficient to cause impairment.”

Although medical marijuana has been legal in Arizona for many years, efforts to legalize recreational marijuana use failed in 2016, when a ballot proposition received only 48.7% of the vote in favor. However, in 2020, voters in Arizona enthusiastically voted “yes” on Prop 207 – with nearly 60% of votes in favor –  legalizing recreational marijuana possession and use by adults. Specifically, Prop 207, known as the “Smart and Safe Arizona Act,” allows adults age 21 years old or older to use, possess, or transfer up to one ounce of marijuana and cultivate for personal use not more than six marijuana plants at a primary residence. In addition, the Act imposes a 16% excise tax on marijuana sales to fund community colleges, infrastructure, public safety, and public health programs. Importantly, the Act does not allow any person to smoke marijuana in a public place or consume marijuana or marijuana products while driving, operating, or riding as a passenger in a motor vehicle, boat, or other vehicle used for transportation. Further, the Act does not supersede or eliminate any existing rights or privileges of any person, which includes qualifying patients under the AMMA.

Like the AMMA, the Smart and Safe Arizona Act goes beyond just allowing adult recreational cannabis use. It also amends criminal classifications and penalties for cannabis possession and use, and it even allows courts to vacate and expunge certain marijuana arrests, charges, adjudications, convictions, or sentences in certain circumstances starting in mid-2021. This unusual provision is likely to have implications for Arizona employers who perform pre-employment background checks, and accordingly  those employers should ensure that their criminal background checks are based on the most up-to-date, accurate records.

In addition to these provisions, and also like the AMMA, certain provisions of the Smart and Safe Arizona Act relate directly to employers. Preliminarily, it is important to recognize that the legalization of recreational marijuana use in Arizona does not automatically require employers to tolerate marijuana use by their employees. Specifically, the Act does not:

  • restrict the rights of employers to maintain a drug-and-alcohol free workplace or affect the ability of employers to have workplace policies restricting the use of marijuana by employees or prospective employees;

  • require an employer to allow or accommodate the use, consumption, possession, transfer, display, transportation, sale or cultivation of marijuana in a place of employment; or

  • restrict the rights of employers to prohibit or regulate conduct that occurs on or in their properties.

Overall, the Smart and Safe Arizona Act, and other state laws like it, preserve employers’ ability to maintain and enforce zero-tolerance drug-free workplace policies if they so choose. However, as more jurisdictions legalize recreational marijuana use, it may be high time (pun intended) for employers with drug-testing policies to reconsider when they choose to drug test and whether to include marijuana as one of the substances for which they test. Although reasonable suspicion and post-accident drug testing remain essential tools to ensure workplace safety, employers need to seriously consider whether it remains beneficial to continue testing for marijuana, particularly in pre-employment screenings. By conducting such screenings, employers may be severely limiting their applicant pool and unnecessarily eliminating otherwise qualified candidates who may be engaging in an activity now as lawful as having a drink after work. Further, it is worth noting that some jurisdictions, such as Nevada and New York City, actually prohibit most employers from conducting pre-employment drug testing for the presence of marijuana. And other states, such as Illinois, prohibit employers from discriminating against employees who engage in lawful activities outside of the workplace.

Although the number of states that permit both medical and recreational marijuana use continues to grow, it is important to remember that marijuana remains an illegal drug under federal law. Marijuana is still listed under the Federal Controlled Substances Act as a Schedule I substance and the federal government has formally declared that marijuana has “no currently accepted medical use and a high potential for abuse.” In addition, some federal regulations prohibit marijuana use by certain employees, even if their use complies with state law. Accordingly, in some circumstances, a failure to discriminate against a medical marijuana cardholder or recreational marijuana user might cause an employer to lose monetary or licensing related benefits under federal law or regulation. For example, the federal Department of Transportation strictly prohibits marijuana use by employees employed in “safety sensitive” positions, even where such use is legal in the state where they reside. The juxtaposition and outright conflict between federal and state laws regarding marijuana use and possession has created a hazy dilemma (yes, again) for employers since states first began passing such legislation, and employers will need to continue to stay in the weeds (three!) regarding their obligations under both state and federal laws.

In light of these new state laws legalizing both medical and recreational marijuana use, employers in the affected states should examine their current substance abuse and drug-testing policies and consult with their attorney to ensure that they understand the nuances of applicable state and federal laws and any relevant case law in their jurisdiction that may affect their policies. Remember that although these new laws create broader protections for marijuana users, none require employers to allow employees to possess or use marijuana at work, or to come to or be at work while under the influence of marijuana. Therefore, regulating workplace marijuana use is within the rights of employers in every state, and employers should make sure that their substance abuse policies bluntly prohibit the use or possession of, or impairment by, medical or recreational marijuana while working or on company property. Further, employers in states where both recreational and medical marijuana use is legal should make sure they understand their different obligations to employees under both types of laws to ensure they do not skirt their responsibilities to medical marijuana cardholders in applicable jurisdictions.

Finally, on a related note, it’s worth mentioning that on Election Day 2020, Oregon became the first state to decriminalize small amounts of “hard” drugs, including cocaine, heroin, methamphetamines, and other Schedule I-IV drugs through Measure 110, the Drug Addiction Treatment and Recovery Act. Although the Oregon law is silent with respect to employment and therefore does not impose any additional obligations or restrictions on employers, employers in Oregon should consider reviewing their substance abuse and drug-testing policies and consult with counsel to determine if they should revise aspects of their policies in light of this new law.

[1] South Dakota voters additionally approved medical marijuana use, and Mississippi voters also approved medical marijuana use (but not recreational use), bringing the number of states with medical marijuana use to 36 total. For a comprehensive list of states with legalized marijuana use – medical, recreational, or both – see here.

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© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 315
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Daniel B. Pasternak Labor & Employment Attorney Squire Patton Boggs Phoenix, AZ
Partner

Dan Pasternak works with employers to solve workplace problems. Sometimes that involves helping develop, implement and enforce effective and business-sensible employment and traditional labor relations policies and practices. Other times, it involves representing employers in high-stakes litigation matters.

For more than two decades, Dan has advised employers in managing one of their most important assets – their human resources. From leading workplace investigations and crafting executive and non-executive employment, retention and separation contracts, to designing and supporting...

602-528-4187
Melissa Legault Labor & Employment Attorney Squire Patton Boggs Phoenix, AZ
Associate

Melissa Legault is an associate in the Phoenix office, where she focuses her practice on labor and employment matters. Melissa assists employers in diverse matters related to their employment relationships. She routinely researches and analyzes legal authorities for drafting memoranda, pleadings and position statements related to employment law. Melissa also conducts legal research on employment case law and current events to help clients achieve their goals while complying with frequently changing regulations.

Melissa graduated magna cum laude from the...

602-528-4044
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