In the weeds: continuing the roll out of recreational marijuana across the U.S. 

February 15, 2024

In the weeds: continuing the roll out of recreational marijuana across the U.S. 
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By Desiree R. Tolbert-Render, AVP, National Claims Technical Compliance; Mary Beth Sanford, Managing Director; Max Koonce, Chief Claims Officer

As of Jan. 1, 2024, with 2023 enactment of marijuana legislation in Kentucky, there 38 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, Canada, and Mexico that have legalized the medical use of marijuana. Regulated marijuana for adult recreational use is legal in 24 states, and Canada passing just last year in Delaware and Minnesota with a ballot initiative in Ohio. Approved measures in nine states allow the use of “low THC, high cannabidiol (CBD)” products for medical reasons in limited situations or as a legal defense.

As we look ahead to 2024, one thing is clear: the legalization of marijuana continues its roll. In this blog, we highlight what employers need to know. 

Usage of marijuana in the workforce

According to the National Survey of Drug Use and Health, approximately 40.7 million Americans aged 18 and older reported use of marijuana in 2022. 

The Quest Diagnostics 2023 Annual Drug Testing Index and Industry Insights report shared that workforce drug positivity for marijuana reached a 25-year high in 2022.  Marijuana positivity increased to 5.7% in states in which recreational marijuana was legal versus 3.9% in states in which medical marijuana is legal.  In states in which neither recreational nor medical marijuana is legal, marijuana positivity was 3.1% in 2022. 

Impact of recreational marijuana laws on workers’ compensation claims

It has now been more than ten years since Colorado became the first state in the U.S. to legalize retail sales of marijuana for recreational use, enough time to collect data for the completion of studies. 

Our data does not yet show any direct impact on frequency in states that allow adult recreational use. This is in part due to  most jurisdictions having workers’ compensation laws that, in some form, restrict workers’ compensation benefits when the injury is attributed to intoxication or drug use. 

Reimbursement for medical marijuana under workers’ compensation

States legalizing marijuana for medicinal use has raised the inevitable questions of whether it is reimbursable medical treatment under workers’ compensation and over the years, many courts and state legislatures have addressed this issue. Following decisions of the Commonwealth Court of Pennsylvania on March 17, 2023, Pennsylvania joined a small number of states — Connecticut, New Jersey, New Mexico, New York, Pennsylvania and New Hampshire —that require workers’ compensation to reimburse for medical under specified circumstances.

To date, the following 18 states have specifically stated in their laws, or the state courts have ruled that reimbursement for medical marijuana is not required under workers’ compensation. 

ArkansasLouisianaNorth Dakota
FloridaMassachusettsSouth Dakota

 The remaining states are either silent on this issue or include a provision that typically states, “a government medical assistance program, health insurance provider or private health insurer is not required to reimburse a person for costs associated with the medical use of marijuana.” Click here for additional information.       

Federal landscape

Marijuana, even for medicinal use, is illegal under federal law because it remains listed under Schedule I in the Controlled Substances Act (CSA).  Schedule I substances are considered to have high potential for dependency and no accepted medical use. This status makes distribution of marijuana a federal offense and assignment of a National Drug Code (NDC) is prohibited.   

Examples of other federal and state regulations that conflict with state marijuana laws and make compliance challenging for employers include the Occupational Safety and Health Act (OSHA), U.S. Department of Transportation (DOT) and Federal and State Procurement Laws.

Occupational Safety and Health Act (OSHA) 

  • The act has a “general duty clause” requiring employers to provide a safe work environment.
  • Employers who allow impaired employees to work in safety sensitive positions where others may be harmed may be in violation of this requirement.

U.S. Department of Transportation (DOT) 

  • Over the years, the DOT has issued notices reiterating that marijuana remains a drug listed in Schedule I of the Controlled Substances Act and it remains unacceptable for any safety‐sensitive employees subject to drug testing under the Department of Transportation’s drug testing regulations — 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 — to use marijuana. 
  • Federal regulation of transportation has detailed requirements for drug and alcohol control and testing programs.

Federal and State Procurement Laws 

  • Some federal agencies and states require drug free workplace and substance abuse policies as a condition of awarding public works projects. 

What’s ahead?  

Federal action to reschedule marijuana may be a real possibility during this election year.  Several bills are under consideration by Congress to legalize marijuana at the federal level. The Marijuana Opportunity Reinvestment and Expungement (MORE) Act would in part remove marijuana from the list of scheduled substances under CSA and eliminate criminal penalties for an individual who manufactures, distributes or possesses marijuana.  Both the State Reform Act of 2023 and the Strengthening the Tenth Amendment Through Entrusting States (STATES) 2.0 Act would remove marijuana from the CSA entirely and task the Food and Drug Administration(FDA) with regulation of marijuana products.  

In a letter dated Jan. 29, 2024, 12 senators, including the Senate Majority Leader, signed a letter urging the Drug Enforcement Administration (DEA) to swiftly de-schedule marijuana from the CSA. This follows a recommendation to the DEA from  the Department of Health and Human Services (HHS) to reclassify marijuana Schedule 1 to Schedule III under CSA according to a Congressional Research Service report. 

Until the federal government steps in to provide some clarity, we all are left to navigate a state-by-state patchwork of laws for guidance. We recommend seeking legal assistance to develop and communicate a sound company policy addressing the use and reimbursement of medical marijuana for on-the-job injuries. Such a policy must address state specific laws.  Meanwhile, Sedgwick will continue to offer updates and insights regarding this rapidly evolving topic. Stay tuned for more information from our experts as this topic develops. 

Tags: Casualty, Casualty claims, Claims, Drug trends, Federal law, Helping people, Legislation, legislative updates, workers com, Workers comp, workers compensation