The reclassification of cannabis from a Schedule I to a Schedule III drug will not legalize recreational use or immediately change most workplace drug policies, but it introduces key considerations for employers, particularly regarding medical accommodations, drug testing, and federal compliance.
Key Impacts for Employers
- No Immediate Legalization or Mandate to Change Policies: Rescheduling does not equate to full federal legalization of marijuana; it remains a controlled substance. Employers are generally not required to change their existing drug testing or zero-tolerance policies, especially in safety-sensitive industries.
- Americans with Disabilities Act (ADA) and Accommodations: Because Schedule III drugs have a federally recognized medical use, medical cannabis may potentially qualify as a “reasonable accommodation” under the ADA in some circumstances. This will likely be a complex legal area, requiring employers to evaluate HR policies to manage potential disability claims.
- Safety-Sensitive Positions: The Department of Transportation (DOT) has stated that rescheduling will not affect its mandatory drug testing rules. Employees in safety-sensitive positions (e.g., truck drivers, pilots, heavy machinery operators) will continue to be subject to federal testing requirements and zero-tolerance rules for THC.
- State Law Conflicts: The federal change will reduce the conflict between federal and state medical cannabis laws. However, employers must still navigate a complex and evolving patchwork of state and local laws, many of which restrict or prohibit drug testing for marijuana, particularly for off-duty use in non-safety-sensitive roles.
- Focus on Impairment: Without a reliable, federally recognized test for current marijuana impairment (unlike alcohol), zero-tolerance policies may persist. Employers are advised to train supervisors on recognizing impairment and addressing it properly.
- Confidentiality: Information related to an employee’s medical cannabis use must be treated as confidential health information, requiring extra safeguards.
- Cannabis Businesses: Companies within the state-legal cannabis industry will see significant financial relief as they will no longer be subject to the IRS Section 280E tax code, which previously barred them from deducting normal business expenses. This also means better access to banking services and increased opportunities for research.
Over the past decade we have seen significant changes throughout the country at the local and state level related to medicinal and recreational marijuana, with the majority of states legalizing some form of THC or cannabis. Marijuana is still illegal at the federal level, which governs in the Department of Transportation rules and regulations for many positions across the country. With the president recently pardoning federal marijuana-related misdemeanors, HR professionals need to ensure we embrace not only the changes laws and regulations, but the changing attitudes towards recreational and medicinal marijuana use.
New York State Recreational Marijuana Q&A PDF
States with Potential 2026 Marijuana Proposals
The status of these initiatives is subject to change as signature gathering and legal reviews are ongoing.
Active Legalization Efforts
- Florida: The “Smart & Safe Florida” campaign is pushing a constitutional amendment to legalize adult-use marijuana for individuals 21 and older. The proposal would allow adults to possess up to 2 ounces of cannabis flower and prohibits public smoking and youth-focused marketing. The campaign has gathered enough signatures to trigger a State Supreme Court review and needs over 880,000 total valid signatures by February 2026 to make the ballot.
- Idaho: Two citizen initiatives may appear on the ballot:
- One initiative would create a legal system for medical marijuana for qualifying conditions.
- A second initiative aims to decriminalize the possession and use of marijuana for all purposes for people aged 21 and older.
- Nebraska: An initiative is in progress to establish a right to the recreational use of marijuana for individuals 21 years of age or older.
- Oklahoma: A campaign is underway to put “State Question 837” on the ballot, which would legalize recreational marijuana, allow home cultivation of up to six plants, and create a licensed retail market.
- Wisconsin: The governor has indicated that if Democrats take control of the legislature, they can “finally” legalize marijuana through the legislative process.
Efforts to Restrict or Repeal Laws
- Idaho: The Idaho Legislature has already placed a measure on the ballot (HJR 4) that would amend the state constitution to give only the Legislature the authority to legalize marijuana, narcotics, or other psychoactive substances, effectively removing the power of citizen-initiated measures.
- Massachusetts: A proposed initiative seeks to repeal the majority of a 2016 initiative that legalized recreational marijuana sales, making retail sales illegal while still allowing possession of up to one ounce.
- Maine: Anti-drug activists are also pursuing a ballot initiative to repeal the state’s legal cannabis market.
- Medicinal Use & ADA: Medical marijuana is legalized in the majority of the states throughout the country. Medical providers can and do prescribe marijuana for medicinal use. We should fully understand reasonable accommodation, essential functions, and additional considerations under the American with Disabilities Act, along with other local and state laws and regulations.
- Drug Testing: Certain states and cities have now banned preemployment drug testing for THC for many positions in the state or locale. Ensure you have a clear understanding of any evolving laws and regulations. Also consider DOT regulations, at times you might have separate drug testing policies for DOT and non-DOT employees in the same organizations. Expectations and policies should be communicated.
- Criminal Background Checks: Laws and regulations continue to evolve on criminal background checks, related to prior charges for marijuana related crimes. This includes second chance legislation. There are a variety of laws and regulations across the country defining the dos and don’ts of criminal background checks. Research and outsourcing will ensure proactive approaches to criminal background checking.
- Policies & Procedures: With evolving legislation, make it a priority to updates any policies and procedures in relation to drug-free workplaces, preemployment testing, reasonable suspicion, post-accident testing, etc. Regardless of the laws and regulations, there should be zero-tolerance policy in place any employee being under the influence or any drug or alcohol in the workplace. Implementing an Employee Assistance Program (EAP) is recommended for organizations large and small. Train supervisors on enforcing the policy and procedures and communicate any changes throughout the organization.” (Burr SHRM Article)
The Americans with Disabilities Act until recently, ruled against reasonable accommodation in relation to medicinal marijuana use. Employer-Friendly decisions include Washburn v. Columbia Forest Products, Inc., Roe v. Teletch Customer Care Mgmt., Johnson vs. Columbia Falls Aluminum Co., and Ross v. RagingWire Telecommunications, Inc. Three out of the four rulings for employers happened in pro-marijuana states: California, Oregon and Washington. However, along comes Barbuto vs. Advantage Sales and Marketing, LLC; “the Massachusetts high court addressed whether an employer must accommodate medical cannabis use, since state law permits medical marijuana use and prohibits disability discrimination…The court held that an exception to the employer’s drug policy to permit offsite marijuana use may be a reasonable accommodation where the employee’s physician determines that marijuana is the most effective treatment for the employee’s disability and that any alternative medication permitted by the employer’s drug policy would be less effective.” https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/must-employers-accommodate-medical-marijuana.aspx
https://www.jdsupra.com/legalnews/third-circuit-rules-that-employees-2174704/
“Schedule I: Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are: heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3 methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote” “Despite marijuana’s Schedule I status, former President Barack Obama’s administration issued a memo in 2013 stating that federal prosecutors wouldn’t target adults who were growing or using marijuana in accordance with state laws. Instead, the federal government focused its efforts on preventing marijuana sales to minors and stopping drug cartels. Although President Donald Trump’s administration rescinded the Obama-era memo, there hasn’t been a ramp up in enforcement, and states continue to approve marijuana use.” https://www.dea.gov/drug-scheduling
On August 29, 2023, the U.S. Department of Health and Human Services (“HHS”) recommended to the Drug Enforcement Administration (“DEA”) that marijuana be reclassified from a Schedule I controlled substance to a Schedule III controlled substance. Reclassification in this manner, should the DEA choose to follow this recommendation, could have profound implications on the marijuana industry, medical research, tax and banking, and criminal enforcement.
December 2024 YouTube DEA Marijuana Hearings
See attached DEA PDF
Medicinal Marijuana & Workers Compensation
On March 17, 2023, the Commonwealth Court of Pennsylvania issued a decision regarding employee use of medical marijuana in the workers’ compensation context. The decision in Fegley v. Firestone Tire & Rubber (Workers’ Comp. Appeal Bd.) addresses an issue of first impression. The court held that an employer’s failure to reimburse an employee’s out-of-pocket costs for medical marijuana to treat his work-related injury was a violation of the Pennsylvania Workers’ Compensation Act (“WC Act”). The decision is significant for Pennsylvania employers. Given this decision, Pennsylvania employers could be subject to penalties under the WC Act if they do not reimburse employees for medical marijuana use—even though marijuana is illegal under federal law and cannot be prescribed by any doctors.
CASE BACKGROUND
The employee in the underlying case sustained a work-related injury to his back. After decades of taking prescribed opiates and narcotics, the employee began using medical marijuana at the recommendation of his doctor. His pain level improved through use of marijuana, to the point that he was able to wean himself off of the prescription drugs. An entity responsible for evaluating the appropriateness of treatment for work-related injuries under the state workers’ compensation system found that the employee’s medical marijuana use was reasonable and necessary. However, the employer refused to reimburse the employee for the cost of his medical marijuana treatment.
The employee filed a claim seeking penalties for the employer’s alleged violation of the WC Act by failing to pay for the cost of his medical marijuana use. The employer prevailed at the agency level on the grounds that the Pennsylvania Medical Marijuana Act (“MMA”) says that coverage is not required for medical marijuana and requiring an employer to fund marijuana use would violate federal law and did not violate the WC Act. The employee then appealed to the Commonwealth Court of Pennsylvania.
DECISION ON APPEAL
In a 5-2 decision, the Commonwealth Court of Pennsylvania disagreed with the agency ruling below, and thus reversed and remanded. In reaching its decision, the Court analyzed the contours of, and the relationship between, the WC Act, the MMA, and related federal law.
Starting with the basics, the Court observed that the WC Act requires reimbursement to employees for reasonable and necessary medical expenses resulting from work-related injuries. The Court also observed that the MMA deems marijuana to be a legitimate therapy for treatment of medical issues under proper circumstances. And the MMA seeks to protect individuals who use medical marijuana by stating that medical marijuana patients shall not be “denied any right or privilege, . . . solely for lawful use of medical marijuana . . .”
The MMA, however, also has a section entitled “Conflict”, which provides that “[n]othing in [the MMA] shall be construed to require an insurer or a health plan, whether paid for by Commonwealth funds or private funds, to provide coverage for medical marijuana.” This did not end the Court’s inquiry. The Court found that the absence of the word “reimbursement” in this Conflict provision is significant. While a well-reasoned dissenting opinion described “coverage” and “reimbursement” as “two sides of the same coin”, the majority disagreed. The Court held that “coverage” and “reimbursement” have materially distinct definitions. The Court reasoned that the MMA does not require coverage for medical marijuana, but there is no language in the MMA precluding a WC carrier from reimbursing a claimant for medical expenses that are reasonable and necessary to treat a work-related injury. In the Court’s view, employers must therefore reimburse employees for medical marijuana treatment that is reasonable and necessary for work-related injuries. This conclusion, the Court noted, is consistent with the WC Act’s reimbursement requirement, along with the MMA’s endorsement of medical marijuana and corresponding prohibition against the denial of rights or privileges based solely on medical marijuana use.
The Court also addressed the relationship between state and federal law. The MMA contains a provision stating that [n]othing in [the MMA] shall require an employer to commit any act that would put the employer or any person in violation of federal law.” Under federal law, it is unlawful for “any person knowingly or intentionally – [] to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance[.]” 21 U.S.C. § 841(a). The Court did not find this to be a persuasive reason for reaching a different decision because reimbursement is not the same as manufacturing, distribution, or dispensing of marijuana. Thus, reimbursement is not illegal.
In her dissent, Judge Christine Fizzano Cannon discussed the interplay between state and federal law. She wrote that “[a]lthough the MMA legalizes the use of medical marijuana in Pennsylvania, a provider still cannot legally dispense medical marijuana under federal law” because it is illegal. She reasoned that an illegal treatment cannot be reasonable or necessary under the WC Act and, in turn, an employer should not be responsible for reimbursement.
KEY TAKEAWAYS
This decision—unless it is overturned or superseded—has immediate impact on employers in Pennsylvania. Indeed, they are now required to reimburse employees for medical marijuana treatment for work-related injuries under the WC Act. Failure to do so could result in penalties.
This holding is consistent with holdings in New Mexico, New Jersey, New Hampshire, New York and Connecticut. However, it is contrary to holdings in Massachusetts, Maine, and Minnesota. (https://www.jdsupra.com/legalnews/pennsylvania-court-holds-that-it-is-2936018/)
Drug Free Workplace Act
The most important piece of legislation regulating federal contractors and grantees is the Drug-free Workplace Act of 1988 (PDF | 204 KB). Under the act, a drug-free workplace policy is required for:
- Any organization that receives a federal contract of $100,000 or more
- Any organization receiving a federal grant of any size
At a minimum, such organizations must:
- Prepare and distribute a formal drug-free workplace policy statement. This statement should clearly prohibit the manufacture, use, and distribution of controlled substances in the workplace and spell out the specific consequences of violating this policy.
- Establish a drug-free awareness program. This program should inform employees of the dangers of workplace substance use; review the requirements of the organization’s drug-free workplace policy; and offer information about any counseling, rehabilitation, or employee assistance programs (EAPs) that may be available.
- Ensure that all employees working on the federal contract understand their personal reporting obligations. Under the terms of the Drug-Free Workplace Act, an employee must notify the employer within five calendar days if he or she is convicted of a criminal drug violation.
- Notify the federal contracting agency of any covered violation. Under the terms of the Drug-free Workplace Act, the employer has 10 days to report that a covered employee has been convicted of criminal drug violation.
- Take direct action against an employee convicted of a workplace drug violation. This action may involve imposing a penalty or requiring the offender to participate in an appropriate rehabilitation or counseling program.
- Maintain an ongoing good faith effort to meet all the requirements of the Drug-free Workplace Act throughout the life of the contract. Covered organizations must demonstrate their intentions and actions toward maintaining a drug-free workplace. Their failure to comply with terms of the Drug-Free Workplace Act may result in a variety of penalties, including suspension or termination of their grants/contracts and being prohibited from applying for future government funding.
OSH Act
Duty to provide employees with a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm”
Substance abuse is such a hazard.
DOT “Medical Marijuana” Notice
DOT Office of Drug and Alcohol Policy and Compliance Notice
Recently, the Department of Justice (DOJ) issued guidelines for Federal prosecutors in states that have enacted laws authorizing the use of “medical marijuana.” http://www.justice.gov/opa/documents/medical-marijuana.pdf
We have had several inquiries about whether the DOJ advice to Federal prosecutors regarding pursuing criminal cases will have an impact upon the Department of Transportation’s longstanding regulation about the use of marijuana by safety‐sensitive transportation employees – pilots, school bus drivers, truck drivers, train engineers, subway operators, aircraft maintenance personnel, transit fire‐armed security personnel, ship captains, and pipeline emergency response personnel, among others.
We want to make it perfectly clear that the DOJ guidelines will have no bearing on the Department of Transportation’s regulated drug testing program. We will not change our regulated drug testing program based upon these guidelines to Federal prosecutors.
The Department of Transportation’s Drug and Alcohol Testing Regulation – 49 CFR Part 40, at 40.151(e) – does not authorize “medical marijuana” under a state law to be a valid medical explanation for a transportation employee’s positive drug test result.
That section states:
§ 40.151 What are MROs prohibited from doing as part of the verification process?
As an MRO, you are prohibited from doing the following as part of the verification process:
(e) You must not verify a test negative based on information that a physician recommended that the employee use a drug listed in Schedule I of the Controlled Substances Act. (e.g., under a state law that purports to authorize such recommendations, such as the “medical marijuana” laws that some states have adopted.)
Therefore, Medical Review Officers will not verify a drug test as negative based upon information that a physician recommended that the employee use “medical marijuana.” Please note that marijuana remains a drug listed in Schedule I of the Controlled Substances Act. It remains unacceptable for any safety‐sensitive employee subject to drug testing under the Department of Transportation’s drug testing regulations to use marijuana.
We want to assure the traveling public that our transportation system is the safest it can possibly be.
Jim L. Swart
Director
Office of the Secretary of Transportation
Office of Drug and Alcohol
Policy and Compliance
Department of Transportation
October 22, 2009
https://www.transportation.gov/odapc/medical-marijuana-notice
“Implications of Legalization of Recreational Marijuana
Despite three states—Arkansas, North Dakota and South Dakota—rejecting in 2022 the legalization of adult recreational marijuana use, three other states—Maryland, Missouri and Rhode Island—legalized such use.
“I think the legalization of marijuana is inevitable nationwide; it’s just a matter of how and when,” said Dillon McGuire, an attorney with Pashman Stein Walder Hayden in Holmdel, N.J.
Recreational marijuana is now legal in 21 states plus the District of Columbia.
Therapeutic Psychedelics
In the U.S., the use of certain psychedelics in a facilitated, supervised setting is lawful in Colorado and Oregon, noted Lauren Carboni, an attorney with Foley & Lardner in Denver, and John Litchfield, an attorney with Foley & Lardner in Chicago.
In November 2020, Oregon became the first state to regulate therapeutic psilocybin sessions for adults 21 and older in licensed, clinical settings.
Psilocybin is the psychoactive compound found in what is referred to as magic mushrooms, explained Christine Lamb, an attorney with Fortis Law Partners in Denver.
The state begins accepting applications for licensure of facilities to administer its regulated psilocybin services program on Jan. 2, 2023.
In November 2022, Colorado voters approved a similar measure. By Sept. 30, 2024, the Colorado Department of Regulatory Agencies must adopt implementation rules.” (SHRM)
Additional Resources:
https://www.shrm.org/resourcesandtools/pages/marijuana.aspx
Other Considerations:
- Policy & Procedure Revisions
- Review State & Local Legislation
- Drug Free Workplace Act Considerations
- Employee Assistance Program
- DBL & FMLA
- ADA
- Reasonable Suspicion Training for Supervisors
- Communicate with the Workforce
- DOT Regulations
- Policy Signature
Frequently Asked Questions:
Question: Is there a federal requirement for businesses to put up a Drug-Free Workplace poster?
Answer:
No. There is no such federal requirement. Some businesses that receive contracts or grants from the federal government use posters to help fulfill some of the educational requirements under the Drug-Free Workplace Act of 1988.
https://www.jdsupra.com/legalnews/high-stakes-and-political-blazes-top-10-1961805/
Basis for Reasonable- Suspicion Testing
We, the following managers/supervisors/employees and representative or designee, concur with the need for reasonable-suspicion testing in accordance with Organization X current policy for the following employee:
Name: ___________________________________
Work Area: _______________________________
Location: _________________________________
We observed and/or been informed of the following: (Circle all that apply)
| Unusual Physical Sign(s):Slurred SpeechStaggered gaitImbalanceBloodshot EyesConfusionDisorientationLack of LucidityOdor of AlcoholOther: ________________Unusual Behaviors(s):Sudden unexplained changes in behaviorsMood swingsEmotional/violent outburstsThreatsFrequent tardiness or absenteeismUnexplained whereaboutsA record of avoidable accidentsOther: ________________ |
| Complaint(s) From:Customer or VendorVisitorEmployeeImmediate Supervisor or ManagerOther Credible Witness: _____________________What is the nature of the complaint and the dates/times of occurrence, if known: __________________________________________________________________________________________________________________________________________________________________________________________________________________________________ |
| Additional Comments: _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ |
| Verifying Witnesses |
| Name: __________________________________ Title: ___________________________________ Signature: _______________________________ Date: ___________________ Time: _________ AM/PM |
| Name: __________________________________ Title: ___________________________________ Signature: _______________________________ Date: ___________________ Time: _________ AM/PM |
https://www.jdsupra.com/legalnews/a-cautionary-tale-regarding-the-1520506/
BURR CONSULTING, LLC 