High Times in the Old Dominion

Presented by: Anne G. Bibeau, Esq. and Jonathan Gallo, Esq.

VanBlackLaw.com 1 • Virginia Law • Federal Law • Cannabis and Cannabis Production • Employer Considerations • Employment Discrimination AGENDA • Cases and Legislation

VanBlackLaw.com 2 Virginia and Cannabis

• 2015: Virginia law allowing use of cannabis oils to treat intractable epilepsy. No provision for production or for patients to obtain a doctor’s permission. • 2017: Virginia approved in-state production of medical cannabis oil by five providers, one per Health Service Area. Approved licensed “pharmaceutical processors” to grow, extract, dispense, and deliver medical cannabis oils, all on site. • 2018: Virginia expanded medical cannabis oil program to any diagnosed condition. • 2019: Virginia expanded the spectrum of products that will be available for treatment to include items like capsules, topicals, lozenges, lollipops, and suppositories. VanBlackLaw.com 3 Virginia’s Affirmative Defense

• Virginia law provides an affirmative defense to criminal prosecution for possession of cannabidiol (CBD) oil or tetrahydrocannabinol acid (THC-A oil)* • DOES NOT LEGALIZE IT! • POSSESSION OF MARIJUANA IS STILL ILLEGAL IN VIRGINIA

*Does not include industrial hemp which is defined as “any part of the plant Cannabis sativa, including seeds thereof and any derivative, extract, cannabinoid, isomer, acid, salt, or salt of an isomer, whether growing or not, with a concentration of tetrahydrocannabinol that is no greater than that allowed by federal law.” Code of VA §3.2-4112. (Federal Law defines “industrial hemp” as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis.” 7 U.S.C. §5940.

VanBlackLaw.com 4 Virginia’s Affirmative Defense

• CBD oil: any formulation of processed Cannabis plan extract that contains at least 15% CBD but no more than 5% THC, or dilution of the resin of the Cannabis plant that contains at least 5mg of CBD per does but not more than 5% THC • THC-A oil: any formulation of processed Cannabis plant extract that contains at least 15% tetrahydrocannabinol acid but not more than 5% tetrahydrocannabinol, or a dilution of the resin of the Cannabis plant that contains at least 5mg of tetrahydrocannabinol acid per dose but not more than 5% tetrahydrocannabinol

VanBlackLaw.com 5 Virginia’s Affirmative Defense

• Affirmative defense applies only if an individual: 1. Has valid written certification from a Board of Pharmacy registered physician, physician assistant, or licensed nurse practitioner AND 2. Has a current active patient and/or agent registration issued by the Board of Pharmacy. • If the individual files the valid written certification with the court at least 10 days prior to trial and a copy to the Attorney for the Commonwealth, such written certification shall be prima facie evidence that the oil was possessed pursuant to a valid written certification.

• VA Code §18.2-250.1(C) VanBlackLaw.com 6 Virginia’s Pharmaceutical Processors

• Five (5) Pharmaceutical Processors are expected to open across Virginia by the end of the year, and are expected to begin selling products shortly thereafter.

(Graphic: Virginia NORML)

VanBlackLaw.com 7 Federal Law – The Controlled Substances Act

• Controlled Substances Act of 1970 – law regulating the manufacture, importation, possession, use, and distribution of certain substances. The Act imposes penalties for unlawful manufacturing, distribution, and dispensing of controlled substances. • The Act places all regulated substances into one of five schedules based on the substance’s accepted medical use, potential for abuse, and safety and potential for addiction.

VanBlackLaw.com 8 Federal Law – The Controlled Substances Act

• Schedule I: The drug or substance has a high potential for abuse, has no currently accepted medical use in treatment in the United States, and there is a lack of accepted safety for use of the drug or substance under medical supervision.* • Examples: heroin, lysergic acid diethylamide (LSD), and marijuana. *Note: There are currently FDA-approved medications that contain the active ingredient, dronabinol, a synthetic form of THC used to treat chemotherapy-induced nausea and vomiting as well as anorexia related to weight loss in patients with AIDS. (e.g. Marinol®).

VanBlackLaw.com 9 2018 Farm Bill and Industrial Hemp

• Effective Jan. 1, 2019, legalizes cultivation and sale of industrial hemp at federal level. • Hemp and hemp-derived products are removed from the Controlled Substances Act. • States have authority to regulate production/sale of hemp and hemp products within their borders. • Hemp is a variety of the Cannabis sativa L. that contains not more than 0.3% THC on a dry weight basis. • Marijuana is a different variety of the Cannabis sativa L. plant and contains high concentrations of THC. Marijuana is still a Schedule I drug. It is illegal to transport marijuana products over state lines. • CBD may be derived from either variety of the Cannabis sativa L. plant.

VanBlackLaw.com 10 CBD vs. THC – Understanding the Difference

• Both CBD and THC each one of over 100 cannabinoids that have been identified in the cannabis plant. (There are hundreds of other non-cannabinoid compounds as well). • CBD can be extracted from both hemp and marijuana. • Both have the same molecular structure, (21 carbon, 30 hydrogen, 2 oxygen) but the atoms are arranged differently.

VanBlackLaw.com 11 CBD vs. THC – Understanding the Difference

VanBlackLaw.com (Graphic: richmondmag.com) 12 CBD vs. THC – Understanding the Difference

• The structural formulas of • CBD is a negative allosteric Tetrahydrocannabinol (THC) and modulator of CB1 so it Cannabidiol (CBD). changes the shape of the CB1 receptor weakening its ability bind to THC

(Graphics: analyticalcannabis.com) VanBlackLaw.com 13 Food & Drug Administration

• It is illegal to market any CBD product (from hemp or marijuana) as having therapeutic benefits or as a dietary supplement unless the FDA has reviewed and approved it. • FDA approves drugs only after determining that the drug is safe and effective for its intended use. • Approved: • Epidiolex - contains CBD. For the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome. • Marinol and Syndros – contains dronabinol, a synthetic form of THC. For therapeutic uses, including the treatment of anorexia associated with weight loss in AIDS patients. • Cesamet - contains nabilone, a synthetic form of THC. For the treatment of the nausea and vomiting associated with cancer chemotherapy.

VanBlackLaw.com 14 CBD – Availability and Authenticity

• “CBD” products are currently available in many stores. • That doesn’t make it legal or authentic. • Fake, untested, and unapproved products have recently flooded the market and are available at gas stations or convenient stores. • There are NO testing regulations for these products and NO way to know whether they are safe or effective, how much CBD is in the oil, and whether the CBD comes from industrial hemp or marijuana.

VanBlackLaw.com 15 What does this mean for employers?

• Drug testing typically reveals THC, not CBD. But even hemp-based CBD may contain trace amounts of THC. Some tests only test for cannabinoids (THC and CBD) and do not distinguish. • Drug testing will show whether the individual consumed THC within the last several weeks. It does not show whether the individual is currently impaired. • Employees using CBD oil may be entitled to an accommodation under the ADA for the underlying medical condition. • Is the employee also entitled to an accommodation for CBD use? What if it’s derived from industrial hemp? • Virginia law does not provide any protection in employment for cannabis use.

VanBlackLaw.com 16 Americans with Disabilities Act

• Applies to employers with 15 or more employees. • Prohibits employment decisions based on disability if the individual is qualified to perform the essential functions of the job, with or without a reasonable accommodation. • Exception: if disabled individual poses a direct threat that cannot be eliminated by reasonable accommodation. • Requires employers to provide reasonable accommodations to employee’s/applicant’s disabilities, unless such accommodation creates an undue burden for the employer.

VanBlackLaw.com 17 ADA and Illegal Drugs

• Anyone who is “currently engaging” in the illegal use of drugs is not a “qualified individual with a disability.” • The term “qualified individuals” does include those who: • have been successfully rehabilitated and are no longer engaged in the illegal use of drugs; • are currently participating in a rehabilitation program and are no longer engaging in the illegal use of drugs; and • are regarded, erroneously, as illegally using drugs. • EEOC Guidance: “[A] person who casually used drugs illegally in the past, but did not become addicted is not an individual with a disability based on the past drug use. In order for a person to be ‘substantially limited’ because of drug use, s/he must be addicted to the drug.”

VanBlackLaw.com 18 ADA: what is “current”?

The EEOC has defined “current” to mean that the illegal drug use occurred “recently enough” to justify the employer’s reasonable belief that drug use is an ongoing problem.

• If an individual tests positive on a drug test, he or she will be considered a current drug user, so long as the test is accurate.

• “Current” is not limited to the day of use, or recent weeks or days, but is determined on a case-by-case basis.

VanBlackLaw.com 19 ADA Interactive Process

• Employer should engage in an informal, interactive process with the disabled individual to identify the precise limitations and potential accommodations. • The individual must request an accommodation, but does not have to mention ADA. • The employer may ask for documentation about the disability, for functional limitations, and for what aspect of the workplace is a barrier. The employee does not have to specify a precise accommodation.

VanBlackLaw.com 20 Cannabis by State

(Graphic: ncsl.org)

VanBlackLaw.com 21 4/20 Friendly Employment by State

States with Employee Protection Laws: AZ, AR, CT, DE, IL, ME, MA, MN, NV, NJ, NY, PA, RI, WV

(Graphic: canorml.org)

VanBlackLaw.com 22 No ADA Protection for Illegal Drug Use

James v. City of Costa Mesa (9th Cir. 2012) • Plaintiffs sued two California cities that had closed medical marijuana facilities, claiming that the cities violated ADA’s Title II, which prohibits states/localities from discrimination on the basis of disability in the provision of public services. • Held: Marijuana use under a doctor’s supervision in accordance with state law is not protected under the ADA. • ADA excludes illegal drug users from its definition of qualified individuals with a disability. • Medical marijuana may be legal under CA law, but it is illegal under the federal Controlled Substances Act.

VanBlackLaw.com 23 AZ: Whitmire v. Wal-Mart Stores Inc. (2019)

• Arizona Medical Marijuana Act (“AMMA”) prohibits employment discrimination based on registered qualifying patient’s positive drug test for marijuana, unless the employee used, possess, or was impaired by marijuana at worksite or during work hours. • Employee, who had AZ medical marijuana card, smoked medical marijuana as sleep aid and for chronic pain due to arthritis. She claimed she never brought it to work and was never impaired during work hours. • Post-accident drug test: positive for marijuana metabolites at quantitative value of >1000 ng/ml. Employer determined that the test results indicated employee was impaired during her shift and terminated her employment for violation of drug policy. • Employee filed suit alleging wrongful termination in violation of AMMA. • HELD: Employer needs to present expert witness to testify as to whether the amount of marijuana metabolites indicates impairment.

VanBlackLaw.com 24 CA: Ross v. Ragingwire Telecomm (2008)

• Plaintiff used medical marijuana for chronic pain, as recommended by his doctor. • Plaintiff was fired based on preemployment drug test. • Plaintiff sued employer for disability discrimination under California’s Fair Employment and Housing Act. • HELD: No state law could completely legalize medical marijuana use because the drug remains illegal under federal law. There is no employment protection under California’s Compassionate Use Act.

VanBlackLaw.com 25 CO: Coats v. Dish Network (2015)

• Colorado’s Medical Marijuana Amendment (2014) permits medical marijuana use. • Colorado law makes it an unfair and discriminatory labor practice to discharge an employee based on employee’s “lawful” outside-of-work activities. C.R.S. § 24-34-402.5. • Plaintiff claimed that employer fired him for using medical marijuana at home, during non-work time, and that such use is “lawful” and therefore protected by Colorado law. • HELD: Medical marijuana use is not a “lawful” activity under C.R.S. § 24-34-402.5 because it is illegal under federal law.

VanBlackLaw.com 26 MA: Barbuto v. Advantage Sales & Marketing (2017)

• Massachusetts Medical Marijuana Act decriminalizes medical marijuana but does not provide employment protection. • Employee, who took medical marijuana for Crohn’s disease, accepted a job offer contingent upon passing a drug test. She told her new employer that she would test positive for marijuana, but the supervisor said it would be OK. • She failed the drug test and was terminated. • The employer argued that it was following federal law prohibiting marijuana. • HELD: Because employee had a disability, under Massachusetts law the employer had a duty to engage in the interactive process to determine if there was a reasonable accommodation to help her perform the job. The court also insinuated that an employer should determine whether a medical marijuana user could treat his or her medical condition with a different medicine instead of medical marijuana.

VanBlackLaw.com 27 RI: Callaghan v. Darlington Fabrics (2017)

• Employer rejected job applicant who was a registered medical marijuana user based on pre-employment drug test. • Court: “To adequately perform its task, this Court must wade into the weeds of the law of private rights of action, federal preemption, and statutory interpretation. Hopefully, it will not write out of key or analyze out of tune.” • RI law prohibits employment discrimination on the basis of status as a medical marijuana cardholder. • Federal preemption? Congress has passed spending amendments “preventing the funds appropriated … to [DOJ] to be used to prevent … states … ‘from implementing their own laws that authorize’” medical marijuana. • Held: the employer illegally discriminated against plaintiff by failing to accommodate her medical marijuana use.

VanBlackLaw.com 28 NJ: Cotto v. Ardagh Glass Packing, Inc. (N.J. 2018)

• NJ Compassionate Use Medical Marijuana Act decriminalized medical marijuana. • Plaintiff (forklift operator) required to take post-accident drug test. He told his employer that he could not pass because he takes several medically-prescribed drugs, including medical marijuana. • Employer placed him on indefinite suspension, explaining that he could not work again unless he tested negative for marijuana. • Plaintiff filed suit claiming disability discrimination under NJ’s disability discrimination law. He argued that he could perform the job and should not be required to take a drug test for marijuana. • HELD: New Jersey law does not require private employers to waive drug tests for users of medical marijuana. Marijuana is still illegal under federal law.

VanBlackLaw.com 29 NJ: Wild v. Carriage Funeral Holdings, Inc. (2019)

• HELD: Just because the New Jersey Legislature declared that nothing in the Compassionate Use Act, shall be construed to require an employer to accommodate the medical use of marijuana in any workplace, does not mean that the Law Against Discrimination (LAD), may not impose such an obligation, particularly when the declination of an accommodation to such a user relates only to use in any workplace. • HELD: In a suit wherein plaintiff was fired for being an alleged drug abuser, the dismissal of plaintiff's LAD claim was reversed because plaintiff did not allege he sought an accommodation for his use of medical marijuana in the workplace; rather, he alleged only that he sought an accommodation that would allow his continued use of medical marijuana off-site or during off-work hours.

VanBlackLaw.com 30 New Jersey – Reactive Legislation

• As of July 2, 2019, New Jersey has extended workplace protections to employees and healthcare practitioners engaging in activities authorized by New Jersey’s “Jake Honig Compassionate Use Medical Cannabis Act.” • Currently, the Act prohibits employers from taking any “adverse employment action” against a medical marijuana user “based solely on the employee’s status” as a registrant under the Act. • Additionally, after a positive drug test, employers must also allow an employee or applicant an opportunity to present a “legitimate medical explanation for the positive test result.”

VanBlackLaw.com 31 CT: The DFWA is No Defense.

• CT law prohibits employers from refusing to hire a person or discharging, penalizing, or threatening an employee solely on the basis of such person’s status as a qualified medical marijuana user. The law provides an exception if discrimination is “required by federal law or required to obtain federal funding.” • Noffsinger v. SSC Niantic Operating Company, LLC (CT 2018) • Federal contractor rejected plaintiff, who was a qualified medical marijuana user, based on pre-employment drug screen. • Contractor argued the DFWA requires discrimination based on marijuana usage. • Held: The DFWA does not require drug testing. . . . Nor does the DFWA prohibit federal contractors from employing someone who uses illegal drugs outside of the workplace, much less an employee who uses medical marijuana outside the workplace in accordance with a program approved by state law. That defendant has chosen to utilize a zero tolerance drug testing policy in order to maintain a drug free work environment does not mean that this policy was actually ‘required by federal law or required to obtain federal funding.’

VanBlackLaw.com 32 Colorado: Kenny v. Helix TCS, Inc.

• Plaintiff security guard for marijuana security firm filed FLSA complaint against Defendant for failure to pay overtime. • Defendant filed motion to dismiss claim 12(b)(6) arguing that Plaintiff was not covered by the FLSA because the Controlled Substances Act (CSA) impliedly repealed the FLSA overtime mandate for employers in the marijuana industry. • Held: Plaintiff and other similarly situated individuals are not categorically excluded from FLSA protections. D.C. No. 1:17-cv-01755-CMA-KMT (10th Cir. September 2019)

VanBlackLaw.com 33 Thank You! Anne G. Bibeau, Esq. 757.446.8517 [email protected]

The information in this presentation is for general information about the topics discussed, and is not legal or tax advice. Nor does any exchange of information associated with this presentation in any way establish an attorney-client relationship.

Jonathan V. Gallo, Esq. 757.446.8683 [email protected]

VanBlackLaw.com 34