Adult Use Recreational Marijuana May Soon Be Legal, but Employers in New Jersey Are Left in the Dark

In November 2020, by a vote of 67.08% to 32.92%, the voters of New Jersey passed a ballot measure to amend New Jersey’s Constitution to make use of recreational marijuana by those over age 21 legal in New Jersey beginning on January 1, 2021. However, until legislation is signed by the Governor and rules and regulations are issued by the Commission, the details on legalization and the cannabis industry rollout are hazy.  And, what may be worse for New Jersey employers, is the considerable uncertainty regarding how they can maintain a drug free workplace.

When will recreational marijuana become legal?

With voter approval to legalize weed, it is clear that there exists considerable pressure to quickly pass legislation which explains how New Jersey’s recreational marijuana program will roll out. And while some might suggest that recreational marijuana became legal in New Jersey on January 1, 2021, because the ballot measure contemplated a highly regulated and taxed recreational cannabis market, most agree that recreational marijuana is not, in fact, legal until New Jersey’s recreational marijuana law and regulations are enacted.

January 5, 2021 marks the start of the second year of New Jersey’s 219th Legislature.  This means that all bills which were pending in the Senate or Assembly at the end of the 2020 year continue as they were at the start of the second year of this biannual legislative session.

On December 17, 2020 both legislative houses in New Jersey passed  the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” (A-21 / S-21) by a vote of 49-24, with 6 abstentions in the Assembly, and a vote of 23-17 in the Senate. To date, New Jersey Governor Phil Murphy has refused to sign the bill and news reports indicate that Murphy has not done so because he has concerns about the lack of provisions dealing with penalties for use/possession of recreational marijuana by minors under age 21 “as well as some other changes”.  Reports have not identified what other areas of the bill may be of concern to the Governor delaying its passage and what additional changes, if any, may be forthcoming.

When a bill has been passed by both the Senate and Assembly, the New Jersey governor has 45 days (or more if that house is not yet back in session) to act on the bill. The governor can either sign a bill into law or the governor can veto a bill and thereby prevent it from becoming a law.

The governor can prevent the enactment of a bill by “absolute veto” unless 2/3rds of the members of both houses (54 in Assembly/ 27 in the Senate) vote to override an absolute veto.  Unless the position of legislators change, it appears that the New Jersey legislature does not have the necessary votes to override an absolute veto by the Governor. But, because Governor Murphy has been a vocal proponent of marijuana legalization and the potential tax revenue it could generate, an absolute veto is very unlikely.

Alternatively, the governor can modify a bill by “conditional veto” whereby the governor proposes amendments. The governor’s changes can either be  approved by simple majority of both houses and, once passed, the new amended bill would be presented again for signature by the governor.  Or, both houses could override the conditional veto by 2/3 vote of both houses to enact the original bill without the governor’s changes.

If the governor takes no action, a bill passed by both houses will automatically become law.  Because the marijuana bill was passed at the end of the first year of the two year legislative session, a so called “pocket veto” (where a governor takes no action on a passed bill and therefore a bill is not returned to the legislature for possible 2/3 override) is not an option because this type of “veto” by inaction only applies to bills passed within the last 10 days of a 2-year legislative session.

The bill passed on December 17, 2020 known as the “New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act” (“NJCREAMMA”) (A-21/S-21) is over 240 pages and does a number of things. Very broadly, as part of legalizing adult use recreational cannabis, it builds upon the New Jersey Compassionate Use Medical Marijuana Act (as expanded by the Jake Honig Compassionate Use Medical Cannabis Act in 2019) to create the framework for the development, regulation and enforcement of the recreational / “personal use” cannabis industry as well as criminal and social justice reforms associated with  the manufacture, distribution, possession and use of cannabis.

A discussion of the development and framework of the cannabis industry business, from taxation to licenses, incentives and empowerment zones, etc. as set forth in detail under the current bill, is beyond the scope of this article. This article is specific to the employment law issues and challenges posed under the passed bill for employers soon to be faced with legalized recreational marijuana and the potential expansion of recreational marijuana use by employees off-site during non-working hours.

How does New Jersey’s current medical marijuana law affect employers?

Until the law is changed, New Jersey (and Federal) law do not permit recreational marijuana use by employees (and other residents) and cannabis is a Schedule I illegal drug under both the federal and state Controlled Substances Acts.  However, medical marijuana use by registered users is treated differently.

Recall that under Jake Honig Expansion, existing medical marijuana law in New Jersey made it unlawful for an employer “to take any adverse employment action against an employee who is a registered qualifying patient based solely on the employee’s status” as a registered medical marijuana user. However, medical marijuana Expansion also made clear and includes specific provisions which state that an employer may prohibit the use or possession of medical marijuana at the worksite and during work hours. The legal issue was therefore offsite use, including how and whether employers could restrict and take adverse employment actions against registered medical marijuana patients who could not pass a drug test because they used cannabis during nonworking hours.

In a line of legal decisions including, in particular,  Wild v. Carriage Funeral Holdings, the New Jersey Supreme Court in 2020 affirmed a ruling by the New Jersey Appellate Division which held that a medical marijuana patient who was fired by his employer for testing positive could sue his employer for disability discrimination under the New Jersey Law Against Discrimination. As with any case, the facts and circumstances of that case, including the nature of employment are important and are perhaps distinguishable among different types of employers.

To limit potential suit for disability discrimination, employers were encouraged to engage in the so-called  “interactive process” to determine whether the employer is able to “reasonably accommodate” a qualifying employee’s use of medical marijuana off-site and during non-working hours. Many employers could seek to defend their adverse employment action, and a possible determination that they could not “accommodate” a medical marijuana user, even for off-hours use. Such employers, might, for example, seek to point to their safety sensitive work environments or to the effects which permitting such marijuana use would have on their business including, in particular, requirements for a certified drug free work force to complete federal contracts or to receive federal funding. Others, based on their individual facts, might simply point to drug testing policies, or to their employment or collective bargaining agreements, with varying degrees of likely or unlikely legal success.

How does the new recreational marijuana bill, if passed, impact employers?

Under the  NJCREAMMA bill,  employers are again clearly permitted to “maintain a drug and alcohol free workplace”. Specifically, the bill provides that employers are not required: “to permit or accommodate the use, consumption, being under the influence, possession, transfer, display, transportation, sale, or growth of cannabis or cannabis items in the workplace, or to affect the ability of employers to have policies prohibiting use of cannabis items or intoxication by employees during work hours.”  However, the bill also makes clear that the lawful use of recreational / so-called “personal use” cannabis during non-working hours by employees should not impact their employment if they are not impaired / “high” while on the job or when they show up to work.

For employers, the potential impact of this passed bill is significant because it both a) protects employees from adverse employment actions that might otherwise be taken for the use of marijuana during non-working hours, and b) restricts the employer’s ability to take action against an employee based on his/her positive marijuana test result.

What about safety-sensitive employers?

Short answer, the bill provides no safety- sensitive carve-out or special exception under the law for those employers who work in environments which might pose a specific safety risk if employees were impaired at work.

There does exist an exception where federal requirements are impacted if there is a “provable adverse impact on an employer subject to the requirements of a federal contract, then the employer may revise their employee prohibitions consistent with federal law, rules and regulations.”

And, as possibly related to some employment actions, the passed bill also includes “limitations” stating that the provisions of the proposed law involving personal use cannabis shall not be construed:

“a. To amend or affect in any way any State or federal law pertaining to employment matters;


c. To prohibit a recipient of a federal grant or an application for a federal grant from prohibiting … the use of cannabis items to the extent necessary to satisfy federal requirements for the grant.

d. To prohibit a party to a federal contact or a person applying to be a party to a federal contract from … use of cannabis items to the extent necessary to comply with the terms of the contract or to satisfy federal requirements for the contract.

e. To require a person to violate a federal law; or

f. To exempt a person from a federal law or obstruct the enforcement of a federal law.”

As such, this language would appear to carve-out at least those “safety sensitive” employees as defined under regulations issued by the United States Department of Transportation.

Initially, after passage of the November ballot measure, and when the New Jersey Senate and Assembly bills were first introduced, they were identical and provided at Section 48 as follows:

“No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items, unless the employer has a rational basis for doing so which is reasonably related to the employment, including the responsibilities of the employee or prospective employee.”

However, the initial bills were amended and the current bill, as passed by both houses of the Legislature, deletes the language underlined above which would have provided an exception, of particular importance for those employers in “safety sensitive” work environments, where there was a “rational basis reasonably related to employment.”

In lieu of the “rational basis” carveout, the passed bill, as amended, currently identifies the specific circumstances and procedures under which an employee can be required to take a drug test as well as how the employer can use the results of the drug test for “dismissal, suspension, demotion, or other disciplinary action.”

Under what circumstances can employers require drug testing?

Reasonable Suspicion of Workplace Intoxication/Post-Accident:

The bill provides that an employer may require an employee to undergo a drug test upon a) reasonable suspicion of an employee’s usage of a cannabis item while engaged in the performance of the employee’s work responsibilities, b) upon finding of any “observable signs” of intoxication related to usage of an cannabis item, or c) following a work-related accident subject to investigation by the employer.

Pre-Employment/ Random/ Regular Screening during Work Hours:

The bill also discusses an employer’s ability to complete drug tests as part of pre-employment screening, randomly or as part of a regular screening of current employees “to determine use during an employee’s prescribed hours”. Despite the stated ability of an employer to complete such testing, the passed bill also makes clear that an employer may not take any adverse action “solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid” from engaging in recreational marijuana use as permitted under the proposed law. In short, the goal of testing is to foster a drug free workplace and drug testing should be used to confirm current impairment while on the jobsite.

How are employment drug testing protocols changed under the bill?

Significantly, the bill contemplated a two part drug test regime which shall include a “scientifically reliable objective testing methods and procedures, such as testing of blood, urine, or saliva, and a physical evaluation in order to determine an employee’s state of impairment.” To wit, the physical evaluation is required to be conducted by an individual with the necessary certification to opine on the employee’s state of impairment, or lack thereof related to the usage of cannabis. The bill continues to provide that an employer may use the results of the drug test when determining the appropriate employment action concerning the employee.

As such, the bill creates the role of a “Workplace Impairment Recognition Expert” who is certified and trained “in detecting and identifying an employee’s usage of, or impairment from, a cannabis item or other intoxicating substances, and for assisting in the investigation of workplace accidents.” Notably, this certified expert could be a full or part time employee or other individual who is contracted to perform these services on behalf of the employer. But, the regulations which will identify the education, training and curriculum that will be required to obtain such certification have not yet been issued.

Why have employers and business groups objected to the bill?

A number of business groups, such as the NJBIA, have opposed the current legislation because of the impact that the legislation is expected to have on employer efforts to maintain a drug free workforce. In particular, it is reported that NJBIA opposed Section 48 of the NJCREAMMA because it requires the use of certified experts to make decisions on whether an employee is suspected of being under the influence. Currently, so called Drug Recognition Experts (“DRE’s”) are limited to police officers specially trained in the observation of drug impairment. NJBIA and other business groups have requested amendments clarifying that the use of certified DRE’s is optional and for amendments allowing unions and employer organizations to negotiate for different workplace cannabis requirements and protections in a collective bargaining agreement. To wit, Ray Cantor of NJBIA reported its position as follows: “NJBIA has long maintained that workplace safety, through the establishment of drug-free workplaces, is absolutely essential for certain safety sensitive occupations. This bill now falls short on those critical merits by relying on certified experts whose training are not based on scientific standards. This bill should err on the side of public safety until better testing for cannabis impairment is developed.”

Recall that unlike tests for alcohol impairment based on blood alcohol level, present drug testing technology for marijuana cannot determine intoxication but can only detect the presence of tetrahydrocannabinol (“THC”) metabolites (the psychoactive compound responsible for a marijuana “high”) which is only indicative of prior use. To date, scientists have been unable to determine any useful correlation between blood THC concentration and marijuana impairment. And, based upon the type of test and the level of prior use, marijuana tests can be positive for THC for days and, sometimes, even weeks (for habitual users) long after the individual consumed and is no longer impaired from cannabis. For this reason, drug testing of employees where the stated goal is to determine current workplace impairment is dicey. In this environment, how can an employer ensure that a positive drug test is from current workplace intoxication (which is clearly prohibited under contemplated law) as opposed to off duty recreational cannabis use which is soon to be legal? The current solution appears to be the added use of Drug Recognition Experts.

From a legal perspective, part of what makes the current bill and two part testing regime contemplated even murkier is the ongoing dispute in New Jersey regarding the reliability of DRE tests and the admissibility of Drug Recognition Expert evidence in court. In November 2019, the New Jersey Supreme Court issued a ruling in the case of New Jersey v. Olenowski regarding the use of DRE testimony in a driving while under the influence of narcotics case. The Supreme Court ruling remanded the case to a Special Master to determine whether DRE evidence is “junk science” or is generally accepted in the scientific community based on “scientific standards.” If DRE’s are generally acceptable as scientific, the standard for this testimony to be admitted into evidence at trial will be satisfied under the New Jersey Rules of Evidence. But, at the present time, the report of the Special Master remains outstanding and uncertain.

Specifically because current marijuana testing technology cannot detect impairment, some states have opted for per se THC limits (similar to alcohol) which deem an individual impaired as a matter of law based upon THC level and without the need for physical observation by a trained expert. Alternatively, some employers have opted for various forms of virtual “alertness” testing which may, more accurately, identify those who are impaired and therefore not fit for duty and in lieu of drug testing altogether. Such “alertness” testing might also capture those who, for example, are simply too tired to carefully perform their safety sensitive jobs.

If the recreational marijuana bill is passed, when can employers expect some clarity?

The bill requires the creation of a 5 member Cannabis Regulatory Commission responsible for promulgating regulations and overseeing the creation, regulation and enforcement of activities associated with medical and recreational cannabis. The Commission is required to adopt initial rules and regulations within 180 days after the bill is signed into law, or within 45 days of appointment of all members of the commission, whichever is later.

To date, only a few commission members have been appointed and Governor Murphy has not signed the bill into law. Some provisions of the statute become operative immediately upon enactment, while others, including the provisions governing employment and the “activities associated with the personal use of cannabis”, are not operative until the commission adopts initial rules and regulations. So, if and when a bill is ultimately signed by Governor Murphy into law, and until rules and regulations are adopted, employers remain in the dark with uncertain guidance.

What are just some of the questions outstanding?
  • Which types of tests will be deemed “scientifically reliable” and should certain tests (such as testing of hair) be avoided?
  • Which “observation signs of intoxication” can be relied upon and how should drug testing policies be modified?
  • What kind of training will be required for Workplace Impairment Recognition Experts and might these become optional for some groups, such as those in safety sensitive environments?
  • Will DRE evidence be admissible in court to support a drug test if employment action is taken based on such expert’s observations?
  • Should an employer take action based solely on a positive drug test until final regulations are issued, or should they try to locate a DRE to support an action?
  • What about those employers currently operating under existing collective bargaining agreements requiring drug testing?

As you navigate these issues and more, the attorneys of the Cannabis and Labor & Employment groups at Lindabury, McCormick, Estabrook & Cooper are available to discuss your recreational and medical marijuana employment law concerns.

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