Medical marijuana is a workers’ comp, employer rights issue in some states, but not widely viewed as bad for a state economy

Medical marijuana is now legal in some form in 25 states and could be legal in Arkansas if one or both of two proposals on this November’s ballot are passed by the voters.

The idea has met resistance from two of the business community’s most important players, the Arkansas State Chamber of Commerce and the Arkansas Farm Bureau Federation. They have joined a lawsuit against one of the proposals, the Arkansas Medical Cannabis Act, an initiated act where dispensaries would be run by non-profits which includes a provision allowing people to grow their own marijuana if they live too far from a dispensary. The initiated act lists about 50 ailments that would qualify for use.

The other ballot proposal is a constitutional amendment, the Arkansas Medical Marijuana Amendment, that would authorize up to 40 for-profit dispensaries and eight cultivation facilities but would not allow Arkansans to grow their own marijuana. It lists about 14 ailments qualifying for use.

Gov. Asa Hutchinson and Arkansas Surgeon General Dr. Greg Bledsoe recently stepped up their opposition to the medical marijuana initiatives.

WORKFORCE ISSUE
At a meeting of the measures’ opponents in July, Kenny Hall, Arkansas State Chamber of Commerce executive vice president, said legalized medical marijuana could make it harder for employers to enforce workplace safety rules and would complicate worker’s compensation claims, which currently can be excluded if an employee has been found to have used illegal drugs or improperly used prescription drugs.

The Arkansas Medical Cannabis Act expressly forbids employers from discriminating against an individual “in hiring, termination, or any term or condition of employment” if the employee is a qualifying patient or designated caregiver. At the same time, it does not permit users to engage in tasks that “would constitute negligence or professional malpractice” or use marijuana in a public place. It does not require any employer to accommodate the use of cannabis in the workplace or to allow an employee to work while under the influence of cannabis. It does not require government medical assistance programs or private health insurers to reimburse for the costs of cannabis. The Arkansas Medical Marijuana Amendment contains very similar and in some cases identical language.

California became the first state to legalize medical marijuana when voters passed the California Compassionate Use Act in 1996. It allowed patients and caregivers with a physician’s approval to grow medical marijuana. Later laws allowed for the creation of cultivation cooperatives and dispensaries. Marti Fisher, Calchamber policy advocate, said in an email that employers are able to work with the law.

“We feel confident that California employers are well protected in the current legal environment to continue to maintain a drug-free workplace,” she wrote.

Minnesota’s medical marijuana bill was signed into law in 2014, and dispensaries were opened to serve patients, though a limited number were able to take advantage of the law because it did not include pain as a qualifying ailment. That changed Aug. 1, and pain now qualifies. Jim Pumarlo, Minnesota Chamber of Commerce communications director, said the change could make a difference.

“In Minnesota, it may be too early to tell. As of Aug. 1, the program will cover intractable pain, which will likely increase participation in the program beyond the roughly 2,000 individuals currently using it,” he wrote in an email. “Some estimates have suggested that this change will increase participation by two to 10 times what it is now.”

Some states have faced issues. New Mexico, which doesn’t have voter-led initiatives, legalized medical marijuana in 2007 through a state law. Jason Espinoza with the New Mexico Association of Commerce and Industry said legislators didn’t contemplate how the law would affect worker’s compensation rules. In 2015, two court of appeals rulings said worker’s comp insurers are required to pay for medical marijuana so the employee can return to work. That puts employers in an awkward situation, because to comply with a state court order, they are required to help employees purchase a product that violates a federal law. Meanwhile, federal courts have always upheld the right of an employer to maintain a drug- and alcohol-free workplace.

“So does it potentially create the sort of cycle where someone goes on work comp, the business pays for their medical marijuana, they come back to the workplace, but under my drug-free workplace, I have the right to fire them?” he asked.

THE COLORADO EXPERIENCE
Probably the state most associated with marijuana is Colorado, which legalized medical marijuana in 2000 and recreational marijuana in 2012.

Loren Furman, senior vice president of state and federal relations with the Colorado Association of Commerce & Industry, said business owners have not complained to her about the law affecting them, other than the fact that it’s become harder to hire drivers. She said the law legalizing recreational marijuana failed to include protections for employee termination, but courts have ruled in employers’ favor. In Coats v. Dish Network, the Colorado Supreme Court ruled in favor of the satellite provider in a suit brought by a fired employee who had used medical marijuana during non-working hours. She said neither worker’s compensation nor unemployment insurance have been big issues. Moreover, the industry generated $50 million in state and local sales taxes that was earmarked for public schools and for law enforcement.

That’s not to say marijuana hasn’t offered challenges. She said dispensaries are popping up everywhere, neighbors complain about the smell, and there are public safety risks. Asked if marijuana has been good for the economy, she replied, “I think it’s been good for the marijuana economy.” She later added, “It’s certainly not something I’m going to brag about on behalf of the state of Colorado.”

Companies associated with the marijuana industry are not members of the Colorado Association of Commerce & Industry. Instead, they have their own group, the Colorado Cannabis Chamber of Commerce.

According to that group’s website, the marijuana industry in that state generates more than $700 million in sales and has created 18,000 new direct jobs. Even marijuana opponents and watchdogs would agree that Colorado has opened many retail establishments. In a presentation at the Arkansas State Chamber of Commerce in July, Henny Laster of Smart Colorado said Denver in January 2015 had more marijuana dispensaries than pharmacies, Starbucks and McDonald’s restaurants.

Legalized marijuana hasn’t destroyed Colorado’s economy. According to the Bureau of Labor Statistics, Colorado in July was tied with the eighth-best unemployment rate of 3.8%, just ahead of Arkansas. The other states where recreational marijuana is legal had lower rates of growth, however. Oregon had the 33rd best unemployment rate at 5.2%. Washington state and Washington, D.C., were tied for 43rd best at 5.8%. Alaska had the nation’s highest unemployment rate at 6.7%.

THE MICHIGAN EXPERIENCE
Like Arkansas is considering, Michigan voters legalized medical marijuana for qualifying patients in 2008. Tino Breithaupt, senior vice president, business development at the Michigan Economic Development Corporation, said the move did not affect the state’s economic development and business attraction efforts, either positive or negative.

According to Wendy Block, director of health policy & human resources with the Michigan Chamber of Commerce, the business community was neutral in that election because it believed the ballot language enabled employers to extend zero tolerance policies.

Since then, the law has been subject to dozens of legal battles, resulting in case law in both Michigan and federal courts. In Casias v. Walmart, an employee was tested after an injury, found to have been a medical marijuana patient, and then terminated under the company’s zero tolerance policy. He sued, but the Sixth Circuit ruled in Walmart’s favor.

On the other hand, the Michigan Court of Appeals held that plaintiffs testing positive for medical marijuana could not be disqualified for unemployment insurance, Block said. The court even said it would not have allowed the employee to be terminated in the first place. The Michigan Supreme Court refused to hear the state’s appeal.

Block said the case put Michigan employers, who pay taxes to fund unemployment benefits, in a “no-win situation.” They must accommodate an employee using medical marijuana and potentially jeopardize workplace safety, or they can discharge employees, pay benefits and pay higher unemployment taxes. Complicating the issue is the fact that no test exists that can measure marijuana impairment.

Block said the Chamber has heard from members that the percentage of failed drug tests has increased. She recently received a phone call from a manufacturer using heavy machinery that had an employee who was smoking marijuana at break or during lunch off company grounds, excusing himself with his medical marijuana card. Each time he did it, he would be sent home with a day’s pay. Then one day he lit up on company property, and he was terminated on the spot with the company knowing it would probably pay his unemployment benefits.

“There’s just more of a brazen attitude by some employees that they have kind of universal protection under the law,” she said.