Legal Cannabis in New Jersey Creates New Headaches for Employers

On February 22, 2021, New Jersey moved one step closer to the realization of legalization of recreational marijuana. While voters approved legalization of marijuana for recreational use in November, 2020, the details of how to implement the law, including changes regarding criminal penalties for possession of marijuana by individuals 21 years of age and older, and licensure of marijuana businesses were left to the legislature to resolve. On February 22, 2021, New Jersey Governor Phil Murphy signed theNew Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act or “CREAMMA,” which moves the state one step closer to full implementation of recreational marijuana.

CREAMMA includes significant changes to state law regarding the recreational use of marijuana, including its removal from a list of Schedule I substances. However, many details of the implementation are delegated to the newly created Cannabis Regulatory Commission, which will oversee the development, regulation, and enforcement of recreational marijuana use in the state. CREAMMA provides that the Commission has 180 days to adopt rules and regulations related to all the details necessary to get cannabis sales up and running.

Most importantly for employers, CREAMMA contains strong anti-retaliation provisions with respect to when and why an employer may take adverse actions against an employee for the use of marijuana. While it expressly states that nothing in the law requires employers to permit employees to use, possess, or be under the influence of marijuana in the workplace, the new legislation prohibits employers from taking adverse employment actions against employees (1) because the employee does or does not use marijuana, or (2) based solely on a positive test result for cannabinoid metabolites in the employee’s system.

The law permits employers to take an adverse employment action against an employee where (1) the drug test uses scientifically reliable methods such as testing blood, urine, or saliva, and (2) the employer conducts a physical evaluation, by a certified expert, to determine whether the employee is impaired. CREAMMA requires the newly created commission to determine the curriculum and certification process for Certified Workplace Impairment Experts (“to be issued to full- or part-time employees, or others contracted to perform services on behalf of an employer”), who will aid employers in the analysis of whether an employee is exhibiting signs of intoxication in the workplace.

The prohibition of an employer’s sole reliance on a positive test result is no doubt based on the current limitations of testing technology, which cannot reliably show whether the person being tested is currently impaired or is currently under the influence of marijuana at the time the test is taken. Instead, most of the tests currently being used by employers only show whether the subject has consumed marijuana over the course of a past time frame. While some new testing methods claim to show something closer to intoxication, CREAMMA instead focuses on and permits employers to take action only where there is additional evidence that the employee is under the influence of marijuana while at the workplace.

Importantly for federal contractors, the law includes a key exception to this prohibition, where compliance would cause the employer to be in violation of a federal contract. However, unlike many other states’ (Arizona for example) anti-retaliation provisions for use of marijuana, CREAMMA does not create an exemption for employees in safety-sensitive positions. As a result, even employees in safety-sensitive positions are protected by the anti-retaliation provisions of the law, which apply to all employees equally. CREAMMA does, however, permit employers to maintain a drug-free workplace policy and subject employees to drug testing, subject to the anti-retaliation portions of the law.

As a result of the new law, which will be fully effective when the commission finalizes its rules and regulations, employers with employees in New Jersey should review their drug-testing hiring criteria discipline policies and be prepared to revise them in accordance with CREAMMA and the upcoming rules and regulations to be implemented by the commission.