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Cannabis Use Policy for Employers

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As more states pass cannabis supportive laws, companies often need to reevaluate how they approach cannabis use. Are your employees using cannabis? Regulatory attorney Darshan Kulkarni discusses the legality of cannabis use at both the state and federal levels. We’ll also talk about how companies should engage with their employees who use cannabis, and the legal implications of this practice.

Darshan: So the talk today is about, what should employers do about employees who use cannabis?

Narrator: This is the DarshanTalks podcast. Regulatory guy, irregular podcast, with host Darshan Kulkarni. You can find the show on Twitter @DarshanTalks or the show's website at

Darshan: Let's first take a step back and talk about the fact that, what are the laws around cannabis? So to do that appropriately, what you really have to start thinking about is, what level are you talking about? There is the federal level, there's the state level, and then there's the local level. At the federal level you've got the DEA, USDA, and FDA, who basically take the position that there are ... For the most part, the DEA asserts that it's a schedule one substance, cannabis is a schedule one. And when I say cannabis I really mean THC, or tetrahydrocannabinol. It's a schedule one, and in those specific instances there's no good reason to use it. Having said that, it does have exceptions. For example, there are products like Marinol that are actually FDA approved, and therefore the DEA takes the position that that specific one is okay and appropriate, assuming certain other conditions are met. The FDA, like I said, has done an evaluation, and for very specific reasons and very specific positions, they have approved THC and CBD-containing products.

Darshan: And again, they've been synthetic versus naturally produced, etc., etc., etc. And we don't need to get into the details of this. It's really more about, what is the federal level versus the state level kind of issues. And then the USDA, which actually has a slightly different version on all of this. And it basically says that, it ties itself basically to the states, and we'll talk about that in a second. So for the most part it's illegal at the federal level unless you've actually gone through the FDA approval process. On the other hand, at the state level they take a slightly different position. And individual states have actually said that depending on whether it's for ... Some states basically still do the blanket, "It's illegal." There are some states who say that you can use it, but it has to be for medicinal uses.

Darshan: And there's another piece, another group of states that come out and say, "We'll allow it not only for medical but also for recreational use. And for medical reasons you have to meet certain conditions, and that it has to be one of 22 or 23 different indications. And again, each state chooses which ones they want. It may be more than 23, it may be less than 23. But that's really where it stands. And then you've got the recreational, which, it's not tied to a specific disease at all. And then you've got the local, which basically is, some cities like ... Well, before I go to the local, we spoke about state, we talked about medicinal uses versus recreational uses. And the USDA takes the position that if you're going to do state level cannabis, the labs that measure this need to be DEA approved.

Darshan: And that's become a source of issues. And the DEA is now taking a step back from that position, the USDA is taking a step back from that position, but that's really where that world plays. And again, we can get into details if you need to reach out to me.

Darshan: At the local level, you have cities taking the position that, "Yes, we recognize that at the federal level it's generally illegal to use cannabis. However, we're not going to prosecute," which basically means that they're "decriminalizing." So at no point is it legalized, it is just decriminalized. And that's the distinction between the two. On the other hand, when you actually start looking at the different states, they do have, from an employee/employer standpoint, there are a couple of different standards. The first thing to recognize is, where is the cannabis being used?

Darshan: Is it being used at your facility as an employer, or is it being used on the individual's own personal time? If it's being used in their own personal time, there are, depending on the state, there's probably about half a dozen ... Well, no, about a dozen states or so who have anti-discrimination employee protection policies. And different states have started, Rhode Island started in 2013 and Oklahoma had one in 2019, and there have been a series between that. And essentially what it comes down to is, you can't discriminate against employees or potential employees for using medical cannabis. On the other hand, some will go one step further and say that if you're using medical cannabis, you need to accommodate for that. Nevada is the one that really comes to mind. And that may mean mean things like you need to allow them to start later, etc., etc., etc.

Darshan: Then you've actually got states which will say that it's not just accommodating, or it's not just not discriminating against people in the context of medical cannabis, but also in the context of recreational cannabis. And this one's sort of interesting, because Nevada had one in 2019. However, Maine had one, but they repealed it in 2017. So that's an interesting glitch, if you will. So for the most part, as long as employees aren't bringing the medical cannabis to work, they aren't working in a job where impairment may result in serious harm to others, and they aren't working in a federally related job, employers cannot take medical cannabis use or positive drug results into consideration when making hiring and firing decisions. People will go one step further, and you've got Alaska, Illinois, and Indiana, which is sort of interesting. So in 2019 Alaska introduced a bill that would restrict the release of certain records pertaining to low-level cannabis convictions.

Darshan: So we spoke earlier about the idea of decriminalization. They're taking this one step further and saying it's not only decriminalized, but you can't get the records associated with prosecution for these low-level cannabis uses. Then Illinois actually took the bill that they would seal the records of non-violent criminal convictions for 10 years after termination of the petitioner's last sentence. And the petitioner may actually petition the court to expunge records of a conviction or a guilty plea if it meets certain criteria. And then you had Indiana. And Indiana introduced a bill that would outlaw employment discrimination against medical cannabis patients, but they would also actually add protections for employers.

Darshan: So what that really means is that this would allow employers to prohibit medical patients from performing any tasks while under the influence of cannabis, and provision of the performance-specific tasks would not be considered to be unlawful discrimination, even if it resulted in a financial harm to the employee. I.e., states are taking different positions, they're taking different considerations. Indiana's position seems to be more considerate of the employer's position, Alaska and Illinois are really looking at the employee perspective. And there's probably going to have to be something that considers all of these perspectives and some level of harmonization that takes place eventually. If you have questions about what that means, how you should consider that, feel free to reach out to me. I'd be happy to talk to you further.

Narrator: This is the DarshanTalks podcast. Regulatory guy, irregular podcast, with host Darshan Kulkarni. You can find the show on Twitter @DarshanTalks or the show's website at

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