Blog: The California Workplace Advisor

In what might once have been viewed as a remarkable development, but now generates little surprise, recreational marijuana use is now legal in California. On November 9, 2016, Californians approved Proposition 64, known as the Control, Regulate and Tax Adult Use of Marijuana Act (the Act), legalizing the recreational use of marijuana. Contrary to California’s typical position as a legislative frontrunner, the Golden State is bit more of a follower here, joining several other states, including Colorado, Oregon and Washington, where the personal possession and use of marijuana has already been decriminalized. Maine, Massachusetts and Nevada also recently passed recreational use laws, which have not yet taken effect.

Impact of the Control, Regulate and Tax Adult Use of Marijuana Act

The Act amends, repeals, and adds sections to California’s Business and Professions Code, the Food and Agricultural Code, the Health and Safety Code, the Labor Code, the Revenue and Taxation Code, and the Water Code. The Act does not alter California’s existing medical marijuana law, the Compassionate Use Act of 1996.

The Act legalizes recreational marijuana use for adults aged 21 or older under California state law and establishes certain taxes on the cultivation and sale of nonmedical marijuana, including marijuana products. While the recreational use provisions are effective immediately, other tax and licensing provisions of the law will not take effect until January 2018.

Under the Act, it is legal to smoke marijuana in a private home or at a business licensed for on-site marijuana consumption. Smoking marijuana remains illegal while driving a vehicle, in all public places, and anywhere smoking tobacco is. The law makes it legal to possess up to roughly one ounce of marijuana; however, possession on the grounds of a school, daycare center, or youth center while children are present remains illegal. Individuals are permitted to grow up to six plants within a private home, as long as the area is locked and the plants are not visible from a public place.

Marijuana businesses will need to acquire a state license to sell marijuana for recreational use and local governments can also require businesses to obtain a local license and can restrict where such businesses can be located. Local governments are also allowed to completely ban the sale of marijuana from their jurisdictions.

What the Adult Use of Marijuana Act Means for California Employers

Marijuana (whether for medical or recreational use) remains illegal under federal law. This is the foundation for understanding how California’s recreational and medical marijuana laws affect—or don’t affect—employer policies. In short, employers can continue to rely on federal law and enforce their workplace substance abuse policies. Also, the Act itself explicitly allows public and private employers to enact and enforce workplace policies pertaining to marijuana, including any drug-testing policies.

Nothing in the Act is intended to affect or interfere with the rights and obligations of employers to maintain a drug-free workplace or to require an employer to accommodate the use or possession of marijuana in the workplace. Employers may continue to have policies prohibiting the use of marijuana by employees and prospective employees, and the Act does not prevent employers from complying with state or federal law.

In California, employers can require job applicants to pass a drug test as a condition of employment, provided they test all applicants for particular job positions and do not single out certain applicants based on protected characteristics. Drug tests performed after an individual has been hired are permissible if there is reasonable suspicion that the worker is under the influence, in certain safety-sensitive jobs, or pursuant to a narrowly-tailored, post-accident testing policy. In the case of a positive drug test, California employers have the discretion to not hire an applicant, or to discipline an employee, up to and including termination of employment. This is the case even if the individual has been prescribed marijuana due to a medical condition. In the 2008 case, Ross v. RagingWire Telecommuns., Inc., the California Supreme Court upheld the right of an employer to fire an employee who failed a pre-employment drug test as a result of marijuana use recommended by his physician. The court found that employers are not required to accommodate an employee’s medicinal marijuana even though such use was legal in California under the Compassionate Use Act of 1996. (It seems logical that the Ross v. Ragingwire decision might be tested on appeal down the road, but for the present, it is good law.) Likewise, the legalization of recreational marijuana use under the Control, Regulate and Tax Adult Use of Marijuana Act does not require employers to accommodate such use by their employees.

Further, any employers who contract with or receive grants from the State of California are required, under California’s Drug-free Workplace Act of 1990 to certify that they provide a drug-free workplace.

Similarly, any employers who enter into a federal contract for the procurement of property or services valued at $100,000 or more, or receive any federal grant, must follow the regulations of the Drug-Free Workplace Act of 1988.

What Actions, if Any, Should Employers Take?

While the Act does not prevent employers from continuing to rely on federal law and enforce their workplace substance abuse policies, in light of California’s recent legalization of recreational marijuana use, employers may want to consider updating their policies to clarify any expectations with respect to employee marijuana use—but again, this new law should not meaningfully impact such expectations or policy.

What Action Might the Federal Government Take, Given that Marijuana Remains Illegal Under Federal Law?

This is very much an open question. Despite frequent calls for changes to the federal Controlled Substances Act of 1970 (the CSA), marijuana remains a “Schedule 1” banned substance. The issue, then, is not so much any contemplated change in the CSA, but enforcement of it (or not). Although the Department of Justice (DOJ) under President Obama has not prosecuted most individuals and businesses following state and local marijuana laws, it remains to be seen whether the DOJ’s approach will change under the Trump Administration. Even if the Trump Administration’s DOJ does change its approach, however, and increases enforcement efforts, this likely will not impact employer drug-related policies for the reasons discussed above.