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Legalization of Marijuana: What it Means in Today’s Corporate World

Marijuana buds

Marijuana is still illegal on a federal level and still classified as a Schedule I substance, along with hard drugs such as heroin, and currently, the enforcement of marijuana laws is left up to the states. As of 2019, there have been 26 states and the District of Columbia to decriminalize marijuana in some form. Many of the holdout states are leaning toward legalization either through state elections or state legislation, and the major concentration of holdout states are in the Midwest and South.


Brief Overview of Marijuana Legislation

Following California legalizing medical cannabis in 1996, Colorado and Washington became the first states to decriminalize recreational marijuana in 2012 for adults 21 and older. With the Cole Memorandum of 2013, the U.S. Justice Department moved away from marijuana enforcement in states that had some form of legalization, but the Sensible Enforcement of Cannabis Act of 2019 rescinded the Cole Memorandum.

The legalization of recreational marijuana in several states has raised new questions about the rights of workers to use the drug off-site without suffering the consequences of testing positive for a drug test. Each of the states that have legalized recreational marijuana still ban its use in public, and at the same time, no state has yet to pass laws that force employers to tolerate on-the-job cannabis use.

Employers must now realize that access to cannabis is now much easier than in the past, due to the rise of dispensaries. Consuming cannabis edibles is much easier to disguise than smoking the plant. That means employers should be aware that usage may climb in this area, and if they are concerned about it affecting productivity, they should look closer at testing based on signs of intoxication.

Laws are evolving as attitudes change toward cannabis, creating legal uncertainties. For individuals who have obtained a medical marijuana card and use the substance under their doctor’s directions, employers may want to have a private conversation with the employee to develop a better understanding of the situation. Even if the patient uses cannabis for medical reasons, the employer may not make accommodations but perhaps learn more about the worker’s condition.

Many employees still cling to the effects of the Controlled Substances Act (CSA) of 1970. This law clarified the prohibition of certain controlled substances and arranged them in five categories, including Schedule I, which is supposed to encompass substances with a high potential for abuse with no accepted medical use. At the time, marijuana was placed in this group, but since then, research has shown that it does have medical use for treating various health conditions.

Drug Screening

One of the effects of marijuana legalization has been broader use, which has been reflected in drug screening. Following decriminalization of marijuana in the state, positive workplace drug tests jumped 20 percent in Colorado between 2012 and 2013. The new laws contrast with corporate workplace policies to a degree, particularly for medical patients who are approved by their doctors to use cannabis.

The standard policy for drug screening is that employees are first given a written policy, which describes the penalties that may be imposed on them for violations. Corporations are expected to maintain a drug-free workplace, and employees are expected to notify an employer or contractor of any drug conviction for an offense in the workplace within five days.

bird's-eye view of office cubicles

Certain businesses are regulated by the Drug-Free Workplace Act of 1988, and this law calls for federal grant recipients and contractors to adopt a zero-tolerance policy for drug abuse in the workplace. The employers of these organizations have generally agreed to a set of principles that discourage drug usage. They agree to educate employees about the dangers of drug abuse and how it hurts productivity. The law, however, did not mention that employers are required to conduct drug tests. Many jobs that are considered “safety-sensitive,” such as those that involve driving a vehicle or operating machinery, typically require drug screening.

If an employer chooses to require drug screening, they must ensure that it is a “reasonable search” to protect the individual’s privacy rights, per the Fourth Amendment, which means the drug screening is conducted based on suspicion of drug use. A law passed by Congress a few years later, the Americans with Disabilities Act (ADA) of 1990, prohibits an employer from discriminating against an employee based on a disability. In today’s society, disabled workers may be using cannabis as legitimate medical treatment.

As it stands, states can require drug testing before employment and at random times during employment if these tests do not involve discrimination against patients who are legally allowed to use marijuana for medical reasons. Companies that maintain a “zero-tolerance policy” have largely relied on federal law to back their position.

Legal Side

The legalization of cannabis has created a double-edged sword for employers. On one hand, they must respect the new laws but, at the same time, should not feel limited to punish employees who disobey company policies about intoxication. With the current policy of leaving marijuana legislation and enforcement up to states, employers are still in control of enforcing company policies, which may specifically state the consequences of performing duties while under the influence of an intoxicant.

Employee Protection Laws

Employees with disabilities are protected by the ADA from job discrimination regarding pay, training and working conditions. The law states, however, that employers may use the Drug-Free Workplace Act to require employees to conform to drug policy. However, the ADA doesn’t include drugs taken under the supervision of health professionals in its definition of illegal drugs.

A judge's gavel

States now face the challenge of sorting out where marijuana fits into drug policy, and the trend has been toward states deciding based on statutes on how to address the medical marijuana issue concerning other drug laws. Statutes inspired by the ADA tend to favor employers setting restrictive drug policies.

The Oregon Supreme Court ruled in the case Emerald Steel v. Bureau of Labor and Industries that an employer is not required to accommodate an employee who consumes cannabis outside the workplace because marijuana possession is illegal on the federal level. The case involved a drill press operator who tested positive for marijuana use, so he challenged the company and the state. The court found that the employee was not discriminated against because his doctor “recommended” marijuana, rather than prescribed it, so it didn’t count as a drug used under the supervision of a health professional. A similar judgment was made in Ross v. Raging Wire Telecomms., Inc., in which the California State Supreme Court ruled that employers are not required to accommodate off-site cannabis use.


Some states have enacted laws specifically to accommodate medical marijuana use. In New York, for example, a certified patient is considered to have a “disability” based on state law regarding human rights. In states such as Arizona, Delaware, Minnesota, and Nevada, employers are not allowed to single out medical marijuana patients in most situations. In the states where employers must accommodate medical marijuana use, employers must consider the specific needs of the job. In some states, employers must make reasonable accommodations that include a more flexible work schedule that allows for home use of marijuana, but exceptions apply to safety-sensitive jobs.

Employers must now be careful when making adverse employment decisions regarding marijuana. The decision should be based on the employee’s marijuana use in relation to company policy, rather than his or her medical condition. It is common for marijuana legislation statutes to not address marijuana use in the workplace, which further clouds the issue.

Plaintiffs who assert they have been wrongfully terminated due to marijuana use have typically failed in court within states that have set no specific statutes on prohibitions. For example, Michigan’s medical marijuana statute does not prevent an employer from firing an employee over its use, even though it is allowed under state law. The Washington Supreme Court has also backed employers who chose to terminate employees based on marijuana use.

Other state laws that might be relevant to medical marijuana users are those that prohibit employers from firing employees due to breaking laws during nonworking hours. However, this view is still a gray area in many states because cannabis remains illegal on a federal level. It is still important for all employers to make their policies clear to their employees so that there is no misunderstanding in states where cannabis is legal.


The legalization of marijuana in the United States has raised many new questions about how it relates to employment. In past cases, courts have favored employers in wrongful termination cases over cannabis across multiple states, but the formation of specific state statutes will help build cases for employees in the future. For employers trying to gain an understanding on the law, it is important to know the state’s statutes on human rights, marijuana and workers’ compensation. Overall the future of federal and state marijuana laws remains unclear as employers must sharpen their policies that must be communicated clearly to employees.