2021 Marijuana Legalization Update: Five Things You Need to Know

While COVID-19 continues to be the hot topic for workers compensation in 2021, the legalization of marijuana and marijuana-related issues are also on the radar. NCCI is monitoring marijuana legislation in more than 20 jurisdictions and at the federal level. This report outlines key developments as of June 22, 2021.

1. What is the status of marijuana legalization?

Marijuana is still illegal at the federal level, but states continue to legalize marijuana in some form.

Marijuana is still illegal at the federal level as a Schedule I drug under the federal Controlled Substances Act. However, states continue to take action to legalize marijuana through legislation and ballot initiatives.

In 2021, 4 states (Connecticut, New Mexico, New York, and Virginia) passed legislation to legalize marijuana for recreational purposes. There are now 19 states, plus the District of Columbia, that have legalized the recreational use of marijuana.

Other states considered legislation to legalize recreational marijuana this year:

  • Legislation is pending in Pennsylvania, Rhode Island, and Wisconsin.
  • Florida, Hawaii, Minnesota, Nebraska, and North Dakota considered, but have not passed, legislation to legalize marijuana this year.

This year there was activity in New Jersey and South Dakota following approved ballot measures to legalize recreational marijuana in 2020:

  • The 2020 New Jersey ballot measure required legislation to become official. New Jersey passed that legislation (A 21) earlier this year.
  • Earlier this year, a trial court judge in South Dakota ruled the state’s 2020 recreational marijuana ballot measure unconstitutional. The case, Thom v. Barnett, is pending before the South Dakota Supreme Court.

In April, the Florida Supreme Court, in Advisory Opinion to the Attorney General Re: Adult Use of Marijuana, struck down as unconstitutional an attempt to legalize recreational marijuana in the state via a ballot initiative for the 2022 election because the court found that the language proposed in the ballot’s summary was misleading.

2. Has anything changed with state legalization of medical marijuana?

Despite the focus on recreational marijuana, states continue to debate medical marijuana.

Alabama legalized the medical use of marijuana this year by enacting SB 46. The new Alabama law also provides that the medical marijuana law does not affect, alter, or impact an employer’s right to deny or establish legal defenses to the payment of workers compensation benefits to an employee on the basis of a positive drug test or the refusal to submit to or cooperate with a drug test.

Other states addressed medical marijuana this year:

  • Kansas considered numerous bills to create a state medical marijuana program (HB 2184, HB 2436, SB 92, SB 158, SB 287, and SB 315), but did not pass any legislation this year.
  • Nebraska also introduced legislation (LB 474) to legalize medical marijuana this year. The bill did not advance but may be considered next year. (Kansas and Nebraska are two of the three states that have not legalized marijuana in any form to date.)
  • Texas proposed a bill (HB 809) to authorize cannabis for medical use by patients with post-traumatic stress disorder. While this bill did not advance, Texas passed another bill (HB 1535) relating to the medical use of low-tetrahydrocannabinol cannabis.
  • In 2020, Mississippi voters approved a ballot initiative to establish a medical marijuana program in the state. However, on May 14, 2021, the Mississippi Supreme Court overturned the ballot initiative on procedural grounds in In Re Initiative Measure No. 65 v. Watson.

With the enactment of the new law in Alabama and the overturning of the Mississippi law, there are 36 states, plus the District of Columbia, that have legalized the medical use of marijuana.

NCCI’s State Insight tool on ncci.com is a resource for regulators and NCCI affiliates to monitor updates on this map and on other topics.

3. Have there been any new court rulings or proposed legislation regarding reimbursement for medical marijuana in workers compensation?

State courts and legislatures continue to grapple with reimbursement.

Over the years, states including Connecticut, Maine, and New Mexico have addressed the issue of medical marijuana reimbursement in workers compensation. Most recently, state supreme courts in New Jersey, New Hampshire, and Massachusetts, an appellate court in New York, and the Arkansas Workers’ Compensation Commission, have handed down decisions on this issue. States continue to be divided as to whether to allow reimbursement, require reimbursement, or prohibit reimbursement for medical marijuana.

Two states recently ruled that reimbursement is allowed:

  • In April 2021, the New Jersey Supreme Court ruled, in Hager v. M&K Construction, that an employer can be ordered by a workers compensation court to reimburse a claimant for reasonable costs related to prescribed medical marijuana as a workers compensation treatment.
  • In March 2021, the New Hampshire Supreme Court ruled, in Appeal of Andrew Panaggio, that the federal Controlled Substances Act does not preempt the state’s compensation appeals board from ordering an insurer to reimburse a claimant for medical marijuana expenses incurred as a workers compensation treatment.

An appellate court recently ruled that reimbursement is required:

  • In February 2021, a New York appellate court ruled, in Matter of Quigley v. Village of E. Aurora, that an employer/workers compensation carrier was required to reimburse a claimant’s medical marijuana use as a workers compensation treatment under the state’s medical marijuana law.

A state supreme court and a state workers compensation commission recently ruled that reimbursement is not required:

  • In October 2020, the Massachusetts Supreme Judicial Court ruled, in Wright’s Case, that a workers compensation insurer cannot be required to reimburse a claimant for medical marijuana expenses as a necessary and reasonable medical treatment.
  • In June 2021, the Arkansas Workers’ Compensation Commission ruled, in Jones v. Amercable Corp., that a workers compensation insurer is not required to reimburse for marijuana as a medical treatment.

In addition to the court decisions, several states considered legislation this year addressing reimbursement for medical marijuana in workers compensation:

  • Alabama enacted SB 46, which provides that the new medical marijuana law does not require an employer, property and casualty insurer, or private health insurer to reimburse an individual for costs associated with the use of medical cannabis.
  • Kentucky (HB 136), Kansas (SB 158, SB 315), and Nebraska (LB 474) introduced legislation providing that medical marijuana reimbursement is not required in workers compensation. The bills did not advance.
  • New Jersey introduced S 3406 that would require reimbursement for medical marijuana under certain circumstances. The bill is pending.
  • New York introduced AB 242, which provides that medical marijuana is a prescription drug for workers compensation purposes and can be covered under workers compensation. The bill is pending.
  • Pennsylvania introduced SB 749, which amends the state’s medical marijuana law to clarify that a workers compensation insurer is not required to provide coverage for or reimburse the cost of medical marijuana. The bill is pending.

The map below highlights states identified by NCCI that have passed legislation or handed down decisions regarding marijuana reimbursement in workers compensation:

4. As more states legalize marijuana, how is employee intoxication/impairment determined in relation to workers compensation benefit eligibility?

States are considering how to address the potential impacts of legalized marijuana on workers compensation and how to determine whether someone is intoxicated from marijuana.

There are still many questions related to impairment, including:

  • How do employers know if an employee is intoxicated at the time of the accident?
  • How do employers know whether a workplace accident was caused by an employee’s marijuana use?
  • What is the impact on an employee’s eligibility for workers compensation benefits?

Several states introduced legislation this year addressing standards for intoxication and the impact on workers compensation benefits if an employee is found to be impaired at the time of a work injury.

The following states enacted legislation:

  • Alabama SB 46, the new medical marijuana law enacted this year, provides that an employee is not eligible for workers compensation benefits if the injury or death was due to the employee’s impairment from medical marijuana, and establishes a conclusive presumption that the employee was impaired if the employee tests positive or refuses to take the drug test.
  • Montana enacted HB 655, which provides that failing to pass, or refusing to take, a drug test that complies with certain requirements after an accident creates a presumption that the major contributing cause of the accident was the use of nonprescribed drugs. This presumption does not apply to employees certified to use medical marijuana.
  • Nevada enacted AB 400, which establishes standards for determining when an employee is considered to be under the influence of a controlled or prohibited substance (including marijuana) for workers compensation purposes and provides an exception if the employee has a current and lawful prescription issued in the employee’s name.
  • North Dakota enacted HB 1084, which creates a rebuttable presumption that the employee’s injury is due to recreational marijuana use if the employee’s drug test is above a certain limit. If the employee refuses to submit to the drug test after a work accident, then the employee forfeits all entitlement to workplace safety and insurance benefits arising out of that injury.

The following states introduced legislation that did not advance:

  • Illinois introduced legislation (SB 2041) to amend the Workers Compensation Act to establish standards for cannabis impairment sufficient to bar compensation for injuries to employees who are intoxicated. The bill provides that the presence of 5 nanograms of tetrahydrocannabinol in the blood or 10 nanograms of tetrahydrocannabinol in other bodily substances creates a rebuttable presumption that intoxication is the proximate cause of the injury.
  • Kansas introduced several bills to create a medical marijuana program in the state, which also provided that an employee cannot be denied workers compensation benefits if the employee is a medical marijuana cardholder and other conditions are met.
  • Kansas also introduced a bill (HB 2040) that would remove marijuana from the presumption of disqualifying drug impairment on the basis of certain drug concentration test levels in the workers compensation law.
  • Kentucky introduced HB 529, which would have excluded low levels of tetrahydrocannabinol in an employee’s blood from the presumption that the drug was the cause of the employee’s accident, injury, disease, or death.
  • Maryland introduced legislation (HB 683/SB 461) that would have provided that an employee is not entitled to workers compensation if medical cannabis was the sole cause of the injury and the medical cannabis was not administered or taken with the written certification of a certifying provider or the written instruction of a physician.
  • While not specific to marijuana, Rhode Island introduced HB 5473, which would establish that an employee who tests positive for alcohol, or a controlled substance that was not legally prescribed, is presumed intoxicated at the time of injury and it is presumed that the intoxication caused the injury.

5. What is Congress doing at the federal level to address marijuana issues?

Federal legislation providing safeguards to financial institutions and insurers is pending.

There is federal legislation (HR 365) to remove marijuana from the list of Schedule I drugs in the federal Controlled Substances Act, as well as legislation that would provide safeguards to financial institutions that provide services to certain marijuana businesses.

  • The House of Representatives recently passed the Secure and Fair Enforcement (SAFE) Banking Act of 2021 (HR 1996), which provides a safe harbor from penalties for financial institutions that provide services for legitimate cannabis-related businesses. It is unclear whether the bill will advance in the Senate.
  • Both the House and the Senate have introduced the Clarifying Law Around Insurance of Marijuana (CLAIM) Act of 2021 (HR 2068/SB 862), which proposes a safe harbor for insurers engaging in the business of insurance in connection with a cannabis-related legitimate business.

Conclusion

While marijuana remains illegal at the federal level, states continue to legalize marijuana through legislation and ballot measures. In addition, state legislatures and state courts continue to grapple with issues around medical marijuana, including whether reimbursement should be required or prohibited in workers compensation. Without a definitive test for marijuana intoxication, states are also debating how to address workers compensation benefits for an employee who is injured on the job and tests positive for marijuana. Will the new Congress and new administration change the federal status of marijuana and/or provide protections to financial institutions doing business with legitimate marijuana-related businesses? NCCI will continue to monitor all these issues going forward.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

TOP