California was the first state to establish a medical cannabis program, enacted by Proposition 215 in 1996 and Senate Bill 420 in 2003. In November 2016, California voters approved the Adult Use of Marijuana Act (Proposition 64) to legalize the recreational use of cannabis. Licenses were issued for cultivation and business establishment beginning in 2018. In total, 33 states, along with the District of Columbia, have legalized marijuana in one form or another, however, cannabis is still illegal under federal law. The federal government regulates drugs through the Controlled Substances Act (CSA) (21 U.S.C. § 811), which does not recognize the difference between medical and recreational use of cannabis. These laws are generally applied only against persons who possess, cultivate, or distribute large quantities of cannabis.
With conflicting state and federal laws, the impact of cannabis on Workers’ Compensation insurance for all businesses, including manufacturers, is complicated and not clear. For example, let’s say, an employee sustains a traumatic injury on the shop’s floor. To treat the pain, a physician prescribes medical marijuana instead of an opioid. Or, an employee sustains an injury on the job and is asked to take a drug test after the fact. The test comes back positive for the active component of marijuana. In either case, can the employer still expect their Workers’ Compensation carrier to pay the associated claim? And if the employer has a drug-free workplace policy in force, do they have the right to fire the employee for using marijuana either recreationally or for medical purposes?
It depends and there are many unknowns. Although there are studies showing that cannabis has been effective in treating chronic pain, the research is still in its early stages. In addition, even if marijuana becomes a more mainstream therapy for Workers’ Comp injuries, it remains illegal under federal law. If a doctor prescribes medical marijuana for an injured worker, the carrier may have grounds to refuse to pay the claim. Also, nationwide, reimbursement for medical marijuana treatment is not provided except in jurisdictions that mandate it by law.
In California, case law is currently controlling some situations rather than legislation. In Ross v. RagingWire, for example, employers were allowed to fire a stoned employee. The case also doesn’t require accommodation for the use of marijuana for medicinal reasons, and employers can drug test new employees and have random drug tests. They can declare a workplace “drug-free.”
Furthermore, because marijuana is still illegal on a federal level, the prescription card or doctor’s letter granting an employee the right to use marijuana doesn’t grant them the right to use it on the job.
Things get even murkier when a worker is injured on the job and wants to collect Workers’ Comp despite evidence of marijuana use. The issue is that THC can remain in the user’s system long after any high is gone. A positive drug test doesn’t automatically prove that someone who just got involved in an accident on the factory floor is actually high – even if he or she caused the accident. It just means that sometime in the recent past, he or she used the drug.
Only time will tell how cannabis use will affect and/or change the Workers’ Compensation system. ManufacSurance®, the exclusive program developed by Precision Manufacturing Insurance Services (PMIS), provides California manufacturers with Workers’ Compensation coverage, including an in-house dedicated claims manager to aggressively oversee and motivate the insurance carrier’s claim management process. For more information about our customized insurance programs for manufacturers, please contact us at 855-704-7306.