Prop 64: Understanding the Adult Use of Marijuana Act in the Workplace

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In November of 2016, California voters passed the Medicinal and Adult-Use Cannabis Regulation and Safety Act, also known as Proposition 64, legalizing recreational cannabis use for adults 21 years of age and older. The law went into affect on January 1st of this year, allowing adults over 21 to possess, transport, and share up to an ounce of cannabis and eight grams of cannabis concentrate, as well as grow as many as six plants at home. 

What does this mean for you as an employer?

For most businesses, the rules won’t change too much. Just as with alcohol use, the new law doesn’t give anyone a pass to show up to work intoxicated.  Employees cannot consume it in the workplace nor can they consume it in their car (as DUI and open container laws apply here, too). And as with cigarettes, there’s no consuming it in public anywhere indoors, including in bars.  If your company has a zero-tolerance approach when it comes to drugs in the workplace, that is still acceptable under the current laws, which is of particular interest to those companies who work with heavy machinery and may have specific safety concerns.

What about medicinal consumption? 

Medical marijuana has been legal in California for some time, but is subject to its own sets of rules and regulations.  In 1996, California voters passed Proposition 215, also known as the Compassionate Use Act, allowing the possession, use and cultivation of cannabis for patients looking to treat cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraines or “any other illness for which marijuana provides relief.” This vague wording was later clarified by the Medical Marijuana Program Act of 2003, which established an identification card system for patients with these prescriptions. Despite the new January rules taking effect, those patients under the age of 21 with medicinal marijuana cards will still be able to access marijuana medicinally.

Can we do drug testing? 

California holds very specific laws when it comes to privacy rights and much of it stems from the employer’s rationale behind ordering a drug test.  Was it pre-employment testing? If an employer is requiring new hires to pass a drug test as a condition of hiring them, then this is generally allowed.  Was it random testing of existing employees?  This falls into a very grey area when it comes to privacy and it is not legal unless the individual’s job falls under the category of public safety.

How do the protocols surrounding medicinal and adult-use differ from one another?

In June of 2017, California Governor Jerry Brown signed a bill regulating both adult-use and medicinal marijuana under the same standards, however, cannabis-industry businesses, both growers and retailers, will be categorized under either an A license for adult-use or an M license for medical use. 

Medicinal licenses for dispensaries are separate from adult-use licenses, and the two are separated into silos, even at a single dispensary.  While it is possible to apply for dual licenses, most cannabis retailers aren’t allowed to possess both licenses as the businesses are treated separately, each with its own set of separate books and records. 

The cannabis industry in California is big business, but it’s tricky.  With the federal government laws making marijuana sales illegal, it’s been challenging for cannabis businesses to run their financials through federal banks, therefore most of them operate in cash. Then there’s the issue of taxation, and the sales tax percentages differ by region.  In Los Angeles, for example, adult-use consumers will be subject to a 15% city sales tax along with 9.5% county sales tax, but patients holding a valid medical card will be exempt from state and local sales tax. State revenue projections from these tax fees were to exceed $50 million in the first year, but whether it’s pacing that way so far remains to be seen. Existing medicinal businesses are finding their way with temporary license laws while emerging cannabis industry start-ups are jockeying for position. State and local law enforcement are navigating these new waters, as well. Along with developing protocols and standards for criminalization laws, funds from the taxation proceeds will go toward medicinal cannabis research, drug education, treatment and prevention, and the CHPs efforts for developing new DUI protocols.

Time will tell how these various changes will ultimately play out in terms of the culture of consumption.  Will company happy hours be replaced with cannabis?  Probably not.  But you may want to rewrite your corporate handbook to reflect your own policies toward cannabis in the workplace.

Click here for more information on cannabis laws and policies, courtesy of the California Bureau of Cannabis Control.

GPA will offer complimentary handbook review and development for our clients depending on the size of the group. Please contact us to learn if your company qualifies.