Yesterday, I blogged about the recent decision from the Massachusetts Supreme Court, Barbuto v. Advantage Sales and Marketing, in which the Court held that an employee could pursue her claims for disability discrimination after she was terminated for testing positive for marijuana.

Over at Fox’s Employment Discrimination Report blog, my colleague Justin Schwam has further analysis on the decision. Check out Justin’s post here.

Joseph McNelis works in Fox Rothschild’s Blue Bell, PA office and focuses his practice on labor and employment matters. Joe also tracks legal developments in the cannabis industry in Pennsylvania and nationwide. Joe can be contacted at 610-397-2332 or jmcnelis@foxrothschild.com.

In a decision awaited by many in the industry, the Massachusetts Supreme Judicial Court ruled that a licensed medical marijuana user who was fired after testing positive for marijuana can proceed with claims under the state’s “handicap discrimination” statute. The case is Cristina Barbuto v. Advantage Sales and Marketing and the Court’s opinion was issued on July 17, 2017.

After accepting a job offer from Advantage Sales and Marketing, Barbuto was told she would be required to undergo a drug test. Barbuto, who was a licensed medical marijuana user in Massachusetts and used the drug to treat Crohn’s disease, informed her employer that she was a licensed user and would test positive on the test. She also informed her employer that she did not use the drug daily and would not consume it before work.

Several months later, Barbuto was informed that she was being terminated because she tested positive for marijuana on a drug test. Barbuto filed suit, alleging that her termination violated Massachusetts’ medical marijuana statute, the state’s disability discrimination law, and public policy. Several of the plaintiff’s claims—including disability discrimination and wrongful termination—were dismissed and the plaintiff appealed.

Cannabis and the law
Copyright: jirkaejc / 123RF Stock Photo

The Massachusetts Supreme Court found that the Barbuto was a “handicapped person” under the state’s disability statute, and that her use of medical marijuana recommended by her doctor was a “reasonable accommodation,” thus finding that she stated a prima facie case of discrimination. And the court denied the defendant’s arguments that allowing Barbuto to use marijuana was per se unreasonable, because marijuana was illegal under federal law, as well as the argument that allowing Barbuto to use marijuana posed an “undue hardship,” both of which are defenses under the statute. Therefore, these claims will proceed in the trial court.

However, the court affirmed the dismissal of other claims by Barbuto, including her claim under the state medical marijuana statute. The court found that the statute did not create a private right of action, and found there was not a sufficient basis to imply such a right. This ruling contrasts with a similar recent case from Rhode Island (which I blogged about yesterday) where the state court there implied a private cause of action under the state medical marijuana statute.

The main takeaway from this case is that – regardless of the provisions of your state medical marijuana statute or the fact that marijuana use is still illegal under federal law – is that employers should engage in an interactive process with employees who are licensed medical marijuana users before taking any adverse employment actions. Furthermore, it is always critical to document such a process and, where applicable, to tie the employment decision to factors (e.g., safety and ability to complete the job) other than simply stating that the employee is a marijuana user.

For more tips for employers, check out my post from yesterday.

Joseph McNelis works in Fox Rothschild’s Blue Bell, PA office and focuses his practice on labor and employment matters. Joe also tracks legal developments in the cannabis industry in Pennsylvania and nationwide. Joe can be contacted at 610-397-2332 or jmcnelis@foxrothschild.com.

In one of the first “employee friendly” decisions on this issue, a Rhode Island state court granted summary judgment to a plaintiff job applicant who sued for employment discrimination on the basis of her medical marijuana use. After the plaintiff disclosed as part of the application process that she was a medical marijuana user and would not pass the required pre-employment drug test, the company did not hire her and she filed suit. The case is Callaghan v. Darlington Fabrics Corp.

via 123RF; Copyright : captainvector 

The trial court made several important holdings that could guide other courts examining this issue:

  1. The court first held that Rhode Island’s medical marijuana law, the Hawkins-Slater Act, did provide a private right of action for individuals licensed under the Act, although the Act does not specifically provide for a private cause of action. The court reasoned that, without implying a right of action, the provisions protecting users of medical marijuana would have no effect.
  2. The court held that Rhode Island state law was not preempted by federal law, which prohibits the possession and use of marijuana. In doing so, the Court referenced legislation by Congress which prohibits the Department of Justice from using funds to prevent states from, “implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” (Consolidated Appropriations Act, 2017, Pub. L. No. 115-31, § 537).
  3. The Hawkins-Slater Act prohibits an employer from taking an adverse employment action against an employee, “solely for…her status as a cardholder.” In examining the facts, the court found that the employer’s stated reason for refusing to hire–that the plaintiff could not pass a drug test–constituted a violation of this provision.
  4. Lastly, the Court found that the employer’s action constituted a violation of the Rhode Island Civil Rights Act, which prohibits (among other things) disability discrimination.

The decision has since been appealed by the employer, and employment litigators like myself will be eager to see how the Rhode Island Supreme Court views these issues. While this decision is one of the first to find that federal law is preempted and potentially allowing medical marijuana use by employees, all employers should take lessons from this decision.

First, employers should examine their hiring and adverse action decisions to ensure they have a basis other than an employee’s status as a lawful user of cannabis in their state. Next, in considering the ADA and similar state laws, employers should ensure that it ties its decision to the hardship in accommodating the employee, the employee’s inability to complete the job due to their condition, and/or a decline in the employee’s performance. It would also be wise to engage in an initial interactive process with the employee to determine whether it is feasible to make accommodations for the employee to lawfully use cannabis away from the workplace and still perform their job duties.

As more and more states (including my home state, Pennsylvania) implement medical marijuana programs, employers will be faced these difficult decisions and should look to their counselors and the approaches of other states to determine best approach.

Joseph McNelis works in Fox Rothschild’s Blue Bell, PA office and focuses his practice on labor and employment matters. Joe also tracks legal developments in the cannabis industry in Pennsylvania and nationwide. Joe can be contacted at 610-397-2332 or jmcnelis@foxrothschild.com.

As a follow up to my post on the City of Boynton Beach having its regulations overturned by Florida state law, other Florida municipalities are debating medical marijuana dispensaries.

Those adopting or extending moratoriums on dispensaries:

  • Marathon City, located in the Keys, has extended its moratorium for another 180 days.
  • Winter Garden, located near Orlando, recently voted in favor of a moratorium.
  • Collier County has also imposed a county-wide moratorium through the end of 2017.
  • Coral Gables, located near Miami, has also voted to impose a ban on dispensaries.
  • City of Sarasota, located south of Tampa, imposed a 60 day moratorium.

Miami Beach is investigating a creative workaround to impose some local control on dispensaries.  Miami Beach is looking into changing the zoning rules for pharmacies within their borders since municipalities are required to regulate dispensaries as they do pharmacies.

Meanwhile, the first dispensary in the City of Jacksonville, Florida recently opened its doors.  Tallahassee, the capital of Florida, also recently had its first dispensary open.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

The City of Boynton Beach, Florida wanted to be ready for the implementation of Amendment 2 (medical marijuana) so they set up their own limits on dispensaries that included the following:

  • One dispensary per 67,000 residents;
  • Location was limited to one part of town the community commercial district;
  • No drive-throughs;
  • Limited hours.

Boynton has now learned that the new state law overrides their attempt at local control.  While cities can impose a short moratorium and control minor details regarding dispensaries they cannot impose the location restrictions presently on their books if they permit dispensaries.  Rather medical marijuana dispensaries must be treated as a municipality treats a pharmacy for zoning purposes.  Alternatively, under the state law cities can impose outright bans on medical marijuana dispensaries.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

As noted in my prior post, when the Florida Legislature finally passed laws to implement Amendment 2 (medical marijuana) it did not include smoking as a permissible use for medical marijuana.

And, as expected, litigation has been filed to allow medical marijuana to be smoked. The Florida law does permit vaping of medical marijuana.  Florida legislators have defended their position by noting that Amendment 2 did not specifically identify smoking of medical marijuana and instead made clear that smoking medical marijuana was not permitted in public spaces.

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Dori K. Stibolt is a West Palm Beach, Florida based partner with the law firm of Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

In a recent ruling, the Tenth Circuit addresses multiple controversies where private citizens, sheriffs and county attorneys, and neighboring states brought several suits attempting to limit or interfere with Colorado’s Amendment 64 which legalized recreational marijuana in Colorado.

The Cases

  • In the first suit, the Reillys, individual landowners who own property adjacent to a marijuana grow facility, brought suit under 18 USC § 1964(c) which provides that private citizens can bring a civil suit against members of a RICO enterprise if they are damaged by a RICO activity.  The Reillys allege that the facility emits noxious odors which impede on their enjoyment of their property and which have (potentially) diminished the value of their land.  The district court dismissed this action, finding that the Reillys had not pled facts to show that there was plausible injury to their property.
  • In the second suit, Safe Streets Alliance and the Reillys alleged that Amendment 64 is preempted by the Controlled Substances Act and that the CSA confers upon them a federal substantive right to equitable remedy which they asserted should be to prevent Colorado and the local governments issuing licenses to the marijuana growers.
  • In the third suit, Colorado, Kansas and Nebraska sheriffs and county attorneys sued Colorado under similar preemption theories asserted by the Reillys.
  • In the fourth suit, Nebraska and Oklahoma moved to intervene in the first three cases, claiming that Amendment 64 injures their sovereign rights and those of their citizens, also relying on the theory that the CSA allows preemption of Amendment 64.

Who Won and Who Lost?

  • The only potential winner is the Reillys.  The Tenth Circuit determined that the district court inappropriately dismissed their action noting that Colorado state law acknowledges that invasion of one’s property by noxious odors gives rise to a nuisance claim and results in direct injury to property.  Because the Reillys assert that their property had lost value due to invasion by noxious odors, the Tenth Circuit granted the Reillys the right to prove their damages in the District Court.  However, the Tenth Circuit did not recognize any right to recover for injury attributable to emotional, personal, or speculative future injuries (e.g., any disappointment they experience because a marijuana grow impedes their mountain views or because there is federally illegal behavior openly occurring next to their property).  So, the Reillys have the opportunity to prove their monetary injuries in the District Court.
  • The preemption arguments all failed.  The Court held that the CSA’s preemption clause did not confer Safe Streets and the Reillys with any federal substantive rights which would permit them to force the local regimes to stop issuing licenses or permitting federally illegal conduct.  Without such rights, there is no remedy available.  Based on the same reasoning, the Court held that the Colorado, Kansas and Nebraska sheriffs and county attorneys also do not have any federal substantive rights which allow them to bring a claim.
  • Nebraska and Oklahoma’s moved to intervene in the case after the Supreme Court declined jurisdiction over their claims against Colorado.  The Tenth Circuit affirmed that only the Supreme Court has jurisdiction over controversies between the states and rejected their intervention.  Further, the Court distinguished the preemption arguments available to private citizens vs. sovereign states.

Interesting and Not Insignificant Side Note

  • In addressing the Reillys RICO claims, the court addressed the following question:  who are the defendants, or in RICO parlance, who are the members of the RICO enterprise, against whom the injury claims can be alleged.  Initially, the Reillys included a contractor who provided water to the marijuana grow facility as a defendant.  The Tenth Circuit held that “delivering water to the Marijuana Growers’ operation” was insufficient to establish that the contractor was part of the enterprise.  The Tenth Circuit relied on another Tenth Circuit case, George v. Urban Settlement Servs., 833 F.3d 1242 (10th Cir. 2016) holding that “a defendant must do more than simply provide, through its regular course of business, goods and services that ultimately benefit the enterprise.”  This holding should provide some protection for anyone who provides services as a contractor to a state licensed marijuana business.

The opinion is available here:  Safe Streets v. Hickenlooper et al

I know that the last thing anyone wants to discuss is the 2018 election, still more than a year away. So I promise – this post will not discuss any candidates, or the President.

A ballot measure was recently approved to be placed on the ballot in Oklahoma for the 2018 cycle that could bring medical marijuana to the state. While many state programs have been created by the legislature, some states have done so through ballot measure, such as Arkansas and Florida. With the recent approval of the measure by the Secretary of State, Oklahoma voters have a chance to follow in their footsteps.

The proposed language of the law would establish a regulatory office to administer the program and task the program with making applications for (1) patient medical marijuana licenses and (2) licenses for dispensaries, growers, and processors within thirty (30) days of passage, by no means a small undertaking. The law would require that dispensaries, growers, and processors maintain 75% ownership by Oklahoma residents, and impose a 7% tax on all sales. For more details, check out the full text of Oklahoma State Question 788.

if 2018 is anything like 2016, this measure will be joined by other marijuana-related ballot initiatives. We will be sure to follow this development once election day arrives!

Joseph McNelis works in Fox Rothschild’s Blue Bell, PA office and focuses his practice on labor and employment matters. Joe also tracks legal developments in the cannabis industry in Pennsylvania and nationwide. Joe can be contacted at 610-397-2332 or jmcnelis@foxrothschild.com.

In advance of a Senate Judiciary Committee hearing held June 19, 2017, New Jersey State Senator Nick Scutari released the text of Senate, No. 3195, or SB 3195, the long-awaited bill legalizing cannabis in New Jersey. In a statement announcing the bill in mid-May, Senator Scutari, the bill’s sponsor, stated, “Now is the time to begin shaping New Jersey’s recreational marijuana program. We will have a new governor next year and we should be prepared to move forward with a program that ends the prohibition on marijuana and that treats our residents fairly and humanely.”

New Jersey map outline
Copyright: adamgolabek / 123RF Stock Photo

Governor Chris Christie, an ardent opponent of legalization, once famously remarked that tax revenue generated by legalization of marijuana should be considered “blood money.” As a result, the legislature is not expected to vote on the bill until 2018, when Governor Christie is out of office.

Senator Scutari and other New Jersey legislators took trips to Colorado to see their legalization framework firsthand. The effect is a bill that closely resembles Colorado’s version. SB 3195 proposes the following:

  • Legalizing the possession of one ounce of marijuana flower, seven ounces of concentrate, 16 ounces of edible products infused with cannabis, seven grams of cannabis concentrate, and 72 ounces of infused liquid for adults over 21 years of age
  • Elimination of sales tax on medical cannabis purchases and installing a staggered sales tax schedule on recreational purchases. The tax rate the first year is proposed to be 7%, 10% in year two, and then increase by 5% each year after that until reaching 25%
  • Expunging criminal charges related to possession of marijuana
  • Creating a new division within the Office of the Attorney General that would be specifically charged with overseeing the legalization program

As drafted, SB 3195 prohibits home cultivation of cannabis. While stating that he would be open to negotiating that element of the bill, Senator Scutari noted the difficulties that Colorado and other states have experienced in regulating and controlling home cultivation. Those states impose limits on home cultivation, but enforcement of those limits has proven challenging.

A study by New Jersey Policy Perspective and New Jersey United for Marijuana Reform estimated that legalizing cannabis could bring $300 million in new tax revenue in year one.