Cannabis: Does Your Business Need to Update Its Policies and Practices?

Over the last few decades, marijuana (aka cannabis) laws across the United States have become increasingly more permissive. In 1996, California was the first state to allow medicinal cannabis.[1] In 2012, Colorado and Washington approved legal recreational cannabis.[2] Thirty-eight states and the District of Columbia permit medical-use marijuana, and 24 states have legalized recreational marijuana.[3]

Changing marijuana laws also include state and local measures to protect employees who legally use cannabis products away from the workplace and during off-work hours. However, marijuana remains a highly controlled Schedule I substance at the federal level.

This hodgepodge of sometimes-conflicting marijuana laws can make it challenging for employers to craft drug policies and procedures that support workplace safety while avoiding legal liability.

How Marijuana Can Affect Job Performance

Marijuana is the most commonly used federally illicit drug in the United States and the drug most often detected in workplace drug tests.

A report from the Congressional Research Service indicates that in 2021, over 36 million Americans aged 12 or older had used marijuana in the past month. This number more than doubled from 2008 to 2021—a period during which a majority of states legalized medical or recreational cannabis.[4]

According to the Centers for Disease Control, marijuana can affect health in many ways.[5] The compound tetrahydrocannabinol (THC) is mind-altering and associated with the high the drug produces. THC in marijuana affects motor skills, including depth perception, reaction time, and coordination, and creates sensory distortion. These effects can be dangerous or even deadly in the workplace.

The National Safety Council, citing a study from the National Institute on Drug Abuse, reports that employees who test positive for marijuana had 55 percent more industrial accidents, 85 percent more injuries, and 75 percent greater absenteeism compared to employees who tested negative.[6]

Marijuana may also affect an employer’s bottom line due to decreased productivity, a greater number of worker compensation and unemployment compensation claims, higher turnover, and lawsuits.[7]

State Marijuana Laws

When crafting a workplace policy that addresses marijuana use, a crucial distinction must be drawn between on-duty use and off-duty use. Some states that have legalized marijuana have enacted laws expressly prohibiting employers from disciplining employees for off-duty cannabis use. These laws can subject an employer to liability, including fines and lawsuits, for punishing an employee for cannabis use that occurs outside of work hours and the work premises.

Even in states where it is now legal to use cannabis, employers are within their rights to prohibit workers from being high at work and to enforce a drug-free workplace. Employees who use cannabis on the company premises or who come to work under the influence of cannabis may be disciplined. But state laws on these matters are not uniform. They vary on a number of important points:

  • What constitutes cannabis impairment at work
  • Drug testing requirements (including whether employers may legally test job applicants for marijuana)
  • Exemptions for certain jobs (such as law enforcement, construction trades, and heavy equipment operators)

New marijuana laws in some states may make it more difficult to find drug-free workers. But in most states, employers are still generally within their rights to enforce policies prohibiting off-duty cannabis use when it may reasonably impact the workplace.

Most states also do not require special workplace accommodations for medical cannabis patients, leaving company policies about medicinal cannabis use and disciplinary actions up to the employer. A few states are working on legislation that addresses medical cannabis and employer liability.[8]

Federal Marijuana Laws

The federal treatment of marijuana as a Schedule I controlled substance introduces another wrinkle in the establishment of workplace cannabis rules. Although the federal response to state-level marijuana legalization has largely been to allow states to create and enforce their own laws, federal law nonetheless prohibits marijuana use.

The following employers must comply with federal regulations about drug use, drug testing, and marijuana prohibitions:

  • Federal contractors
  • Federal grantees
  • Employers in federally regulated industries (e.g., commercial pilots and truckers subject to Federal Aviation Administration or Department of Transportation regulations and positions requiring a federal background check or security clearance)

The federal Americans with Disabilities Act (ADA) could have implications for medical marijuana as well. Many individuals’ certification to use medical marijuana is based on suffering from a disability. The ADA protects “qualified individuals with a disability” from discrimination and entitles them to “reasonable accommodation.” While courts have, to date, ruled that since cannabis is federally illegal, medical marijuana patients do not enjoy ADA antidiscrimination protections, these patients may have legal recourse under state law.

Employers should factor in the possibility that federal marijuana policy could change amid shifting perceptions and attitudes about cannabis. The Biden administration, for example, issued a presidential proclamation pardoning many federal offenses for simple marijuana possessions. It has also signaled that it may reschedule marijuana to a less restrictive status (Schedule III), which could reshape federal marijuana policy.[9]

Marijuana Policy Checklist for Employers

With medical or recreational marijuana use now legal in many states, and with tens of millions of regular users across the country, marijuana use, for better or worse, is now widely accepted in American culture.

Rapid and widespread marijuana legalization—and the adoption of laws protecting employees who use marijuana—have created a need for employers to update their marijuana policies. Continuous changes and developments in marijuana laws make it even harder for employers to remain compliant. Businesses should consider the following when they create and implement a drug policy:

  • State-specific laws governing marijuana-related conduct in states with legal cannabis markets
  • Conflicts between applicable state and federal laws
  • Preemployment THC screening for prospective employees
  • Expectations regarding marijuana use in the workplace and discipline, including using cannabis before work or coming to work intoxicated
  • How to define reasonable suspicion of marijuana intoxication
  • Expectations around off-duty marijuana use (i.e., a zero-tolerance, medical-use-only, or recreational-use policy)
  • Legal authority to administer a drug test for employees suspected of marijuana use
  • Repercussions for violating an employer’s marijuana use policy
  • Exceptions to the company’s marijuana policy

Employers, especially those in industries in which marijuana use could create safety concerns such as construction and transportation, or those subject to federal marijuana regulations, will be inclined to have zero-tolerance marijuana policies. Other employers may not want to exclude a large segment of the working population over marijuana amid an ongoing labor shortage, making them amenable to a less-stringent contextual approach.

To avoid running afoul of state and federal marijuana laws, employers should seek legal advice before creating and implementing a workplace marijuana policy or before taking action against a prospect or employee, especially for off-duty and off-site marijuana use.

[1] California’s Cannabis Laws, Dep’t of Cannabis Control, (last visited Mar. 18, 2024).

[2] Denise D. Payán, County‐Level Recreational Marijuana Policies and Local Policy Changes in Colorado and Washington State (2012‐2019), 99 Milbank Q. 1132 (2021),

[3] State Medical Cannabis Laws, Nat’l Conf. of State Legislatures (June 22, 2023),

[4] Lisa N. Sacco et al., Cong. Rsch. Serv., IF12270, The Federal Status of Marijuana and the Expanding Policy Gap with States (2023),

[5] Health Effects of Marijuana, Ctrs. for Disease Control and Prevention (June 2, 2021),

[6] Marijuana at Work: What Employers Need to Know, Nat’l Safety Couns., (last visited Mar. 19, 2024).

[7] Id.

[8] Cannabis and Employment, Nat’l Conf. of State Legislatures (Jan. 22, 2024),

[9] Stefan Sykes, U.S. Health Officials Want to Loosen Marijuana Restrictions. Here’s What It Means, CNBC (Aug. 31, 2023),