An adult-use cannabis bill was announced February 24, 2021 by State Senators Sharif Street (D-Philadelphia) and Dan Laughlin (R-Erie).  The bill would legalize possession of up to 30 grams for those 21 and over, while limiting at-home cultivation to medicinal use.  Noting New Jersey’s recent legalization, and New York’s intention to legalize adult-use cannabis this year, the Senators stressed the importance of Pennsylvania legalizing now to avoid ceding tax revenue and jobs to their neighbors.  Under the bill, cannabis products would be subject to a 10 percent excise tax, in addition to Pennsylvania’s state tax.

The bi-partisan bill follows Governor Tom Wolf’s call for legalization earlier this year.  We will continue to monitor this bill as it progresses through the legislative process.

Today, New Jersey’s legislature passed Senate Bill No. 3454, also known as the “clean-up bill.”  The clean-up bill sets the penalties for underage possession of cannabis and changes the penalties for underage possession of alcohol to match.  There will be no fines or criminal penalties for the possession of cannabis by minors.  People under the age of 21 and over the age of 18 would be subject to up to a $50 civil fine for possession of cannabis under the legal limit for those 21 and over (six ounces), and up to a $100 civil fine should they possess over that amount.  There are no criminal penalties for possession by those under the age of 21 and over the age of 18.  The clean-up bill also establishes that the scent of cannabis is not probable cause for detainment or search by the police, police must have body-cameras turned on when interacting with suspected violators of New Jersey’s underaged cannabis laws, and forbids detainment for violations of the underaged cannabis laws.

In response to a 2020 ballot initiative amending the New Jersey constitution to permit the possession, sale, and use of cannabis by adults 21 and over, the state legislature passed a decriminalization bill, permitting the possession of up to six ounces of cannabis, and a legalization bill, which established the taxation rate and legal marketplace for the state.  However, New Jersey Governor Phil Murphy worried about the lack of legislation regarding underage cannabis use and would not sign either the decriminalization or legalization bills until the legislature passed the clean-up bill.  All three bills were signed by Gov. Murphy today, February 22, 2021.

Governor Ned Lamont introduced his new proposal for legalization of adult-use cannabis with the unveiling of his 2022-2023 budget.  This coincided with the release of Gov. Lamont’s proposed bill, titled An Act Responsibly and Equitably Regulating Adult-Use Cannabis.  The proposal includes legalization of possession of up to 1.5 ounces of cannabis effective January 1, 2022, and the legalization of sales of cannabis effective in May 2022.  Cannabis would be subject to a tax of $1.25 per gram of flower on a dry weight basis, $0.50 per gram of trim on a dry weight basis, and $0.28 per gram of unprocessed, or “wet” cannabis, in addition to the standard sales tax.  Additionally, there will be a 3% tax reserved for the benefit of municipalities.  The proposal also provides for automatic expungement of convictions for possession prior to October 1, 2015, with later convictions requiring a petition to the court for expungement.

While Democrats control both chambers of the Connecticut General Assembly, it is unclear if they have enough votes to pass this proposal.  House Speaker Matthew Ritter has previously pledged to introduce a ballot measure legalizing adult-use cannabis by constitutional amendment should the General Assembly fail to pass legislation.  We will continue to monitor Connecticut and provide updates as Gov. Lamont’s proposal moves through the legislative process.

Last week, Virginia’s Senate and House of Delegates have both passed legislation legalizing adult-use cannabis (S.B. 1406 and H.B. 2312, respectively), and Governor Ralph Northam has indicated he will sign the final legislation into law.  Common elements in both bills include:

  • Legalize possession of up to one ounce for individuals 21 and older
  • Households may cultivate up to four plants, of which at most two plants can be mature
  • Expunge many cannabis-related convictions
  • Provide for a 21% retail tax, as well as empower localities to levy an additional 3% tax
  • Establish the Virginia Cannabis Control Authority in order to regulate sales, cultivation, and manufacture of cannabis products
  • Appropriate the largest portion of cannabis-related tax revenue to fund preschool for at-risk children.
  • Commence retail sales starting January 1, 2024

However, there are some differences between the Senate and House bills.  The Senate bill legalizes possession effective July 1, 2021, whereas the House bill does not legalize possession until the regulated market is established.  Further, the Senate bill allows for localities to ban retail stores.  In contrast, the House’s bill allows localities to designate where retail locations can be opened but does not allow for localities to outright ban retail establishments.  It is anticipated that these differences will be reconciled, which is necessary before a bill can be delivered to Gov. Northam for his signature.  We will continue to monitor any developments and analyze future developments.

On February 1, 2021, Senators Cory Booker (D-NJ), Ron Wyden (D-OR), and Chuck Schumer (D-NY) announced their intention to introduce cannabis reform legislation this year.  In a joint announcement, the Senators pledged to end the federal prohibition on cannabis, as well as “ensure restorative justice, protect public health and implement responsible taxes and regulations.”

While the Senators have not yet released their plan, all three have sponsored cannabis-related legislation in the past.  Each Senator has sponsored legislation to remove cannabis from the list of controlled substances under the Controlled Substances Act, with Sen. Schumer sponsoring the Marijuana Freedom and Opportunity Act in 2018, Sen. Booker sponsoring the Marijuana Justice Act in 2019, and Sen. Wyden sponsoring the Marijuana Revenue and Regulation Act in 2019.  Both the Marijuana Freedom and Opportunity Act and Marijuana Justice Act sought to establish trust funds for the benefit of communities disproportionally impacted by the War on Drugs, and the Marijuana Justice Act also sought to expunge federal convictions for cannabis use and possession.  The Marijuana Revenue and Regulation Act sought to establish a framework for taxing cannabis products produced in the US as well as those imported.

As the new Senate Majority Leader, Sen. Schumer can ensure that any bill proposed receives a vote in the U.S. Senate. We will continue to monitor any developments and analyze any proposed legislation the Senators release.

On July 2, 2019, Governor Phil Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act (the “Act”), which amends the formerly known Compassionate Use of Medical Marijuana Act (“CUMMA”) and expands New Jersey’s medical cannabis program.  Employers should pay particular attention to this new development because the Act includes a non-discrimination provision to protect New Jersey medical cannabis users in the workplace.

As we previously blogged, the New Jersey Appellate Division recently afforded medical cannabis users, who suffer from adverse employment actions due to their lawful medical cannabis use, with the ability to pursue a claim under the Law Against Discrimination (“LAD”), despite the fact that CUMMA previously did not include any explicit employment protections. The Act has now codified various employment protections for medical cannabis users. Specifically, pursuant to the Act, employers cannot take an adverse employment action against an employee “based solely on the employee’s status” as a valid medical cannabis user.

The Act also confirms an employer’s right to maintain a drug testing program, but imposes several requirements upon the employer when dealing with a positive test result for cannabis. Specifically, an employer must provide written notice of the positive test result to the employee or job applicant and notify him/her of the opportunity to “present a legitimate medical explanation for the positive test result.” According to the Act, an employee or job applicant must be given at least three (3) working days after receiving the aforementioned written notice to submit information explaining the positive test result or request a retest of the original sample at the employee’s or job applicant’s expense. To explain a positive test result, the Act explicitly permits an employee or job applicant to submit proof of registration as a valid medical cannabis user with the State and/or a doctor’s authorization to use medical cannabis.

Notwithstanding the above provisions, the Act specifically allows employers to “prohibit, or take adverse employment action for, the possession or use of intoxicating substances during work hours or on the premises of the workplace outside of work hours[.]” Further, the Act states that it should not be construed to require an employer to “be in violation of federal law, that would result in a loss of a licensing-related benefit pursuant to federal law, or that would result in the loss of a federal contract or federal funding.”

Overall, New Jersey employers should review their workplace drug policies and drug testing programs/procedures to ensure compliance with the Act. Except for federal contractors, as noted above, employers should also refrain from making a hiring decision or taking any adverse employment action against an employee based solely upon their valid use of medical cannabis.

This is a reminder to all restaurant and hospitality operators that, commencing on July 1, 2019, the New York City Department of Health will officially ban food and drink products containing Cannabidiol (“CBD”). All products containing CBD must be returned to the supplier or discarded prior to the July 1st enforcement deadline.  Failure to comply may result in fines ranging from $200-$650, dependent upon the quantity seized.

Although efforts to legalize cannabis for adult recreational use failed to win majority support prior to the end of the legislative session, both the New York State Assembly and New York State Senate have approved a significant decriminalization bill.  The bill, which Governor Andrew Cuomo has said he will sign, generally (1) reduces penalties for small-scale cannabis possession and (2) provides for automatic expungement of certain low-level cannabis related criminal records. The bill includes the following key measures:

  • Possession of less than two ounces of cannabis will be classified as a violation. Under existing law, possession of between one and two ounces is classified as a misdemeanor.
  • Public use will be classified as a violation, rather than a misdemeanor as it is classified under existing law.
  • The fine for possession of less than one ounce will be capped at $50. The fine for possession of between one and two ounces will be capped at $200.
  • Imprisonment can no longer be imposed for possession of less than two ounces.
  • At the request of the defendant, the court in which that person was convicted must vacate a judgment of conviction and dismiss the charges relating to certain prior cannabis-related offenses, including convictions for possession of less than 25 grams and for public use.
  • Records of certain prior cannabis-related charges shall be automatically expunged, including convictions for possession of less than 25 grams and for public use.

As noted in our article dated May 23, 2019, New York law currently does not provide a mechanism for expungement of criminal records.  The new bill introduces a definition of “expungement” to the New York Criminal Procedure law, which generally provides that:  (1) any arrest, enforcement activity, prosecution and disposition in any New York State court will be deemed a “nullity” and the individual will be restored to the status occupied prior to the arrest, prosecution and/or disposition; (2) records of the arrest, prosecution and/or disposition shall be marked as “expunged” or destroyed; and (3) no individual shall be required to divulge information pertaining to an expunged proceeding.  Commentators have observed that the bill’s expungement provision will, in practice, mean that relevant convictions will no longer show up on criminal history searches.

New York State Assembly Majority Leader Crystal Peoples-Stokes announced on Tuesday that she is planning to introduce a bill later this week that would not only legalize adult cannabis use, but would also provide the ability for those previously convicted of low-level cannabis-related offenses to have their criminal records expunged.  Majority Leader Peoples-Stokes’ proposal goes a step further than legislation previously under consideration, which would provide only for the sealing of such records.  Expungement is also the position favored by New York Senate Majority Leader Andrea Stewart-Cousins, who stated at a press conference last week that she prefers expungement over sealing.

When a criminal record is expunged, it is essentially erased in the eyes of the law, making it as though the individual had never been accused of the crime in the first instance.  Expunged records should not generally appear in background checks, nor should there be a need to disclose the fact of the expunged arrest or conviction in connection with employment or educational applications.  At present, New York law does not provide a mechanism for expungement of criminal records, rendering Majority Leader Peoples Stokes’ proposal an innovative solution to the collateral consequences attendant to past, low-level cannabis convictions.

New York law does already allow for sealing of criminal records in certain cases.  When a criminal record is sealed, the record still exists, but access to it is tightly restricted.  Generally speaking, the only people who can access sealed records are the defendant and law enforcement agencies that have obtained a court order.  Like expunged arrests and convictions, sealed arrests and convictions should not appear in background checks.  Unlike expunged convictions, however, sealed convictions may still carry legal consequences in certain circumstances.  For example, sealed convictions may still be considered prior offenses for purposes of future arrests or convictions.  It should also be noted that sealing may often be a lengthier process than expungement.

Observers have noted that introduction of an expungement provision will likely set up a disagreement between the legislature and the office of Governor Andrew Cuomo.  The governor’s office previously argued that a provision allowing for expungement could only be implemented through an amendment to the state constitution, which could take several years.  The governor’s office has taken the position that implementation of a sealing provision, however, could be accomplished through the traditional legislative process.

Since the passage of the New York Compassionate Care Act (“CCA”) in July 2014 and the subsequent launch of the medical cannabis program in January 2016, New York employers have begun facing new legal challenges arising from the decriminalization of medical cannabis.  Specifically, employers need to understand their obligations (if any) to reasonably accommodate medical cannabis use and their rights to discipline employees for cannabis use.  With Governor Cuomo’s recent announcement that New York will seek to enact legislation legalizing the adult use of recreational cannabis (which we blogged about here) and New York City’s recently passed ban on pre-employment drug testing for cannabis and tetrahydrocannabinols (“THC”), employers must be vigilant to follow any new developments to ensure compliance with state and local law.

Despite any state legislation to the contrary, cannabis with THC levels in excess of 0.3% is classified as a Schedule I substance under federal law and therefore, any use of cannabis (medical and adult use alike) violates federal law.  Therefore, certified medical cannabis users do not receive any protections under the federal Americans with Disabilities Act.  Employers operating in states where medical cannabis has been legalized, however, need to understand their rights and obligations under their respective state laws.

The Application of the CCA to the New York State Workplace

Pursuant to the CCA, “[c]ertified patients . . . shall not be subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege, including but not limited to civil penalty or disciplinary action by a business . . . solely for the certified medical use or manufacture of marihuana, or for any other action or conduct in accordance with this title.”  N.Y. Pub. Health Law § 3369(1) (emphasis added).  As such, the CCA provides that a certified medical cannabis user cannot be subject to “disciplinary action” by an employer “solely” for the certified use of cannabis.

Additionally, the CCA explicitly contains a non-discrimination provision providing that “[b]eing a certified patient shall be deemed to be having a ‘disability’” under the New York Human Rights Law (“NYHRL”), which applies to all New York employers with four (4) or more employees.  N.Y. Pub. Health Law § 3369(2).  According to the NYHRL, employers cannot discriminate against employees on the basis of disability status.  Further, the NYHRL codifies that it is a discriminatory practice for an employer to refuse to provide reasonable accommodations to known disabilities of its employees unless the accommodations would fundamentally alter the nature of the business or cause an undue burden.  Accordingly, an employer may be subject to a discrimination claim if it takes an adverse employment action against an employee solely for the use of medical cannabis.  An employer may also face a failure to accommodate claim if it fails to reasonably accommodate a certified medical cannabis user.

Notably, however, the CCA codifies two exceptions to the non-discrimination provision: (1) employers are not prohibited from enforcing a policy that prohibits an employee from performing his or her job duties “while impaired by a controlled substance” and (2) no person or entity shall be required to violate federal law or take actions to cause it to lose a federal contract or funding.  As such, the first exception implies that an employer cannot discipline an employee for his or her use of medical cannabis outside of work.  While it is clear that an employer may enact and enforce a policy that prohibits the use of medical cannabis during the workday, the CCA’s failure to define “impaired” creates ambiguity as cannabis can have behavioral, mental, and physiological effects for up to twenty-four (24) hours after use.

Further, the lack of case law in New York also makes an employer’s obligations towards certified medical cannabis users under the CCA hazy.  In Taxi & Limousine Comm’n v. W.R., OATH Index No. 2503/17 (July 14, 2017), a taxi driver failed an annual drug test due to his status as a certified medical cannabis user.  Due to the failed drug test results, the Taxi & Limousine Commission instituted a fitness proceeding alleging that the taxi driver was unfit to retain his taxi license.  The administrative law judge (the “ALJ”) refused to find that the taxi driver was unfit because the positive drug test result did not arise from “illegal drug use” since the taxi driver had a medical cannabis certification.  The ALJ noted that the CCA provides that being a certified medical cannabis user is deemed to be a disability and that an employee may not be penalized in “any” manner or denied any right solely because of their lawful medical use of cannabis.

Additionally, in Gordon v. Consol. Edison, Inc., No. 152614/2017, 2018 WL 2560893 (Sup. Ct. N.Y. Cnty. May 29, 2018), the trial court denied the employer’s motion to dismiss a complaint asserting claims for disability discrimination and failure to accommodate based on the employee’s alleged disability status and her use of medical cannabis under the CCA.  In that case, the employee was terminated for failing a random drug test due to her alleged legal use of medical cannabis.  The employer asserted, in part, that the complaint should be dismissed because the employee was not a certified medical cannabis user protected by the CCA at the time of testing.  The court rejected this argument because it was unclear whether the employer knew that the employee received the cannabis registry card prior to her termination (which occurred three weeks after the drug test was administered).  Indeed, the court noted that the employer “may have” discriminated against the employee based on her disability and failed to accommodate her medical cannabis usage.

As illustrated in the cases above, the CCA’s non-discrimination provision can act as a shield for employees who are certified users of cannabis from being subjected to adverse employment actions.  At the same time, the CCA also allows employers to enact policies that forbid employees from being “impaired” while performing their job duties. Overall, the application of these two CCA provisions remains ambiguous due to the lack of case law.

On May 10, 2019, Int. 1445-A became law and will go into effect on May 10, 2020.  Under the new law, some New York City employers will be prohibited from requiring job applicants to submit to drug tests for cannabis and THC use.  Specifically, employers, labor organizations, and employment agencies (along with any agents of such entities) may not require an applicant to submit to a cannabis or THC drug test as a condition of employment.  Beginning on the effective date of this law, requiring applicants to undergo such tests will be considered an “unlawful discriminatory practice.”

Notably, however, there are several exceptions to this prohibition, which all relate to public safety. For example, the law does not apply to applicants applying for jobs in law enforcement, construction, or child or medical patient care. In addition, the law does not apply to applicants applying for any position requiring a commercial driver’s license or any position with the potential to significantly impact the health or safety of employees or members of the public as determined by the commissioner of citywide administrative services or the chairperson of the City Commission on Human Rights.  As such, these administrative agencies have the authority to create new exceptions to the law in the future.  Further, the prohibition on pre-employment cannabis and/or THC testing does not apply to applicants whose prospective employer is a party to a valid collective bargaining agreement that specifically addresses pre-employment drug testing of such applicants.

Employers should continue to follow any developments in the law and any new legislation that will be passed by New York State or New York City in the future.  Significantly, New York employers should be wary that they are still under an obligation to engage in the interactive process with their employees who are certified medical cannabis users to reasonably accommodate the employees’ underlying medical conditions.  Employers with any questions should consult counsel to ascertain their specific rights and obligations.