IMPLICATIONS FOR MEDICAL MARIJUANA LEGALIZATION IN OHIO Patrick F. Haggerty, Frantz Ward LLP Andrew M. Szilagyi, Frantz Ward LLP CRAIN S CLEVELAND BUSINESS WEBINAR TUESDAY, JANUARY 10, 2017
HOW WE ARRIVED AT LEGALIZATION IN OHIO
HISTORY OF MARIJUANA IN THE UNITED STATES Growth was encouraged and use was widespread prior to 1900 Criminalization began in early 1900s due to strengthening of food and drug laws, opium and narcotics laws Marihuana Tax Act of 1937 transfer of marijuana made illegal
HISTORY OF MARIJUANA IN THE UNITED STATES (CONT.) Boggs Act of 1952 and Narcotics Act of 1956 Mandatory sentences for drug offenses Controlled Substances Act of 1970 DEA created in 1973 Anti- Drug Abuse Act of 1986 reinstituted mandatory minimum sentences
CONTROLLED SUBSTANCES ACT (21 U.S.C. 801, et seq., enacted in 1970) Schedule I Drugs are defined as drugs with no currently accepted medical use and a high potential for abuse Heroin LSD Marijuana Ecstasy Methaqualone Peyote Quaaludes
CONTROLLED SUBSTANCES ACT (CONT.) Schedule II Drugs are defined as drugs with less potential for abuse than Schedule I drugs, with use potentially leading to severe psychological or physical dependence, and currently accepted medical use Vicodin Cocaine Methamphetamine Methadone Hydromorphone Demerol Oxycodone Fentanyl Dexedrine Adderall
ESTIMATED SALES
OTHER $7- $8 BILLION INDUSTRIES Greeting card industry Prenatal testing U.S. cut flower market Wellness industry Halloween industry Youth sports
CHANGE IN CLASSIFICATION OF MARIJUANA? On August 11, 2016, DEA decided not to change the federal status of marijuana scheduling Found no currently accepted medical use However, DEA will make it easier for institutions to grow marijuana for scientific study Currently, only University of Mississippi is allowed
GUIDANCE REGARDING MARIJUANA ENFORCEMENT (COLE MEMO) From Deputy Attorney General James Cole to all U.S. Attorneys dated August 29, 2013 The Cole Memo provides guidance to U.S. Attorneys on the proper prioritization of marijuana enforcement given the number of states that have legalized marijuana
THE COLE MEMO DOJ Enforcement Priorities Preventing: Distribution to minors Interstate movement Use of firearms in connection with marijuana Drugged driving Organized crime Possibly in jeopardy under incoming Attorney General Jeff Sessions
MARIJUANA HORTICULTURE Marijuana has 483 known chemical compounds and they are not all well- understood 66 chemical compounds known as cannabinoids Cannabinoids Identified in Marijuana Cannabinoid Group Abbreviation Known Variants 1. 9 -Tetrahydrocannabinol 9 -THC 9 2. 8 -Tetrahydrocannabinol 8 -THC 2 3. Cannabichromene CBC 5 4. Cannabicyclol CBL 3 5. Cannabidiol CBD 7 6. Cannabielsoin CBE 5 7. Cannabigerol CBG 6 8. Cannabinidiol CBND 2 9. Cannabinol CBN 7 10. Cannabitriol CBT 9 11. Miscellaneous types 11 TOTAL 66
TETRAHYDROCANNABINOL (THC) Main psychoactive component Reported uses Reduce pain Reduce intra- ocular pressure Lessen tremors Increase appetite
CANNABIDIOL (CBD) No psychoactive effect Accounts for up to 40% of cannabis extracts Reported uses Relief from seizures Reduce psychotic symptoms Decrease anxiety Decrease inflammations
MEDICAL MARIJUANA IN OHIO Ohio House Bill 523 first passed by the House on May 10, 2016 Ohio Senate made changes to House Bill 523 on May 25, 2016 Bill passed on May 25, 2016 Gov. Kasich signed the bill on June 8, 2016 Became effective on September 8, 2016 Medical Marijuana Advisory Committee members appointed October 7, 2016
ORGANIZATION Medical Marijuana Control Program Department of Commerce State Board of Pharmacy State Board of Medicine Marijuana Advisory Committee
QUALIFYING MEDICAL CONDITIONS Cancer Crohn s disease Epilepsy Fibromyalgia Multiple sclerosis AIDS PTSD Alzheimer s ALS Pain
VAPORIZATION Smoking by combustion is prohibited, but vaporization is permitted State Board of Pharmacy may permit other methods of using medical marijuana Maximum THC content allowed 35% THC content in plant material 70% THC content in extracts Although not defined in statute, common understanding of vaporization is to heat cannabis to the point where chemicals vaporize without combustion Reduces smoke toxins that may enter respiratory system
OTHER PERMITTED FORMS Oils Tinctures Plant Material Edibles Patches State Board of Pharmacy may permit other forms
PRESCRIPTION VS. RECOMMENDATION Physicians may not prescribe substances in Schedule I or they will lose their DEA license to prescribe controlled substances
PRESCRIPTION VS. RECOMMENDATION (CONT.) Conant v. Walters, 309 F.3d 629, 632, 634-39 (9th Cir. 2002) found a difference between a prescription and recommendation Held that the government may not revoke physician s license to prescribe controlled substances physician is allowed to prescribe if based solely on physician's professional recommendation for use of medical marijuana
HOW DO PATIENTS OBTAIN MEDICAL MARIJUANA? First, need a recommendation from a physician who holds a certificate to recommend from State Medical Board Physician who holds certificate to recommend may recommend only if: Patient has qualifying medical condition Bona fide physician- patient relationship has been established Physician has requested and reviewed from the drug database ( OARRS ) a patient report at least the past 12 months Discussed risks/benefits and advised that benefits outweigh risks
BONA FIDE PHYSICIAN- PATIENT RELATIONSHIP A bona fide physician- patient relationship is established through all of the following: In- person physical examination Review of patient s medical history Expectation of providing care and receiving care on an ongoing basis
HOW DO PATIENTS OBTAIN MEDICAL MARIJUANA? Second, patient must apply to State Board of Pharmacy for registration and ID Card no program in place yet Application requires statement from patient s physician that: Patient has a qualifying medical condition There is a bona fide physician- patient relationship Physician has requested and reviewed report from drug database for past 12 months Patient is informed of risks and benefits of medical marijuana Patient is informed that it is the physician s opinion that benefits of medical marijuana outweigh risks
DISPENSING UPON RECOMMENDATION Dispensary may only dispense upon showing of valid ID card and valid recommendation Recommendation only valid for up to 90 days, but is renewable up to 3 times Patient needs another examination for further renewals
MEDICAL MARIJUANA REGULATION DEADLINES IN OHIO State Medical Board establishes rules of physicians; Medical marijuana becomes legal in Ohio First meeting of Marijuana Advisory Committee State Board of Pharmacy establishes rules for dispensaries, employee training, registration of patients and caregivers Marijuana Advisory Committee disbanded 9/8/2016 10/8/2016 11/7/2016 5/6/2017 9/8/2017 9/8/2018 10/8/2021 Members of Department of Department of Medical Marijuana Marijuana Advisory Commerce Commerce Control Program Committee must establishes rules establishes rules must be fully be appointed for licensing of for testing operational cultivators laboratories and processors
WHAT HAS HAPPENED SO FAR Medical Marijuana Advisory Committee held first meeting on November 1, 2016 Published proposed cultivator rules on November 1, 2016 Had second meeting on December 15, 2016 Amendments to cultivator rules after comments Published proposed dispensary rules Published proposed physician rules
PROPOSED PHYSICIAN RULES Must have active and unrestricted license to practice medicine and surgery or osteopathic medicine and surgery Must take two- hour educational course before obtaining a certificate to recommend May not have any ownership interest or compensation agreement with another medical marijuana entity Submit annual report to State Medical Board of effectiveness of medical marijuana May petition to request additional qualifying condition
PROPOSED DISPENSARY RULES Board of Pharmacy may only issue up to 40 provisional licenses $5,000 non- refundable application fee; $80,000 bi- annual renewal fee Prospective dispensary owner must have at least $250,000 in liquid assets Thorough background checks for employees and ID cards Employees must report purchases to OARRS within 5 minutes Must maintain a pharmacist, nurse, physician, or physician s assistant as dispensary clinical director Be on premises or on call at all times
PROPOSED CULTIVATOR RULES Maximum Level I cultivator licenses (25,000 sq. ft. cultivation area) is 12 Maximum Level II cultivator licenses (3,000 sq. ft. cultivation are) is 12 $500,000 in liquid assets for a Level I cultivator and $50,000 in liquid assets for a Level II cultivator $180,000 licensing fee for Level I cultivator, with $20,000 application fee $18,000 licensing fee for Level II cultivator, with $2,000 application fee Must have quality control and security procedures, including employee state- issued ID cards
AFFIRMATIVE DEFENSE Designed to cover situations where recommendations are available before patient registration Affirmative defense will only be valid until 60 days after Board of Pharmacy begins accepting applications for registration It is an affirmative defense to possession or use of medical marijuana if individual: Has valid recommendation and Marijuana is in permitted form Patients are not yet registered
DRIVING WHILE UNDER THE INFLUENCE O.R.C. 4511.19: Operation while under the influence of alcohol or drug of abuse Threshold Levels of THC (per se thresholds) Urine (nanograms/ml) Blood (nanograms/ml) Marijuana (THC) 10 2 Marijuana (THC) metabolite Marijuana (THC) metabolite combined w/ alcohol or other drugs 35 50 15 5 * Metabolites are compounds produced from chemical changes of a psychoactive substance in the body, but they are not necessarily psychoactive themselves.
DRIVING WHILE UNDER THE INFLUENCE (CONT.) The new Ohio Statute does not authorize a registered patient to operate a vehicle, streetcar, trackless trolley, watercraft, or aircraft while under the influence of medical marijuana Other states have similar provisions e.g., AZ, CT, DE
RESTRICTIONS Local governments can place further restrictions or eliminate marijuana business from operating entirely Rocky River introduced legislation to prohibit cultivation, processing and dispensing of medical marijuana Lakewood has placed a 6 month moratorium on cultivation and sale Other local governments are staying in front of the issue
EMPLOYMENT ISSUES RESULTING FROM THE LEGALIZATION OF MARIJUANA IN OHIO
INTRODUCTION With the enactment of Ohio House Bill 523, Ohio employers will have to begin thinking about how the new legislation will affect them and the way they manage their workforces
MARIJUANA LEGALIZATION LAWS Increase of marijuana legalization laws across the country Medical marijuana vs. recreational marijuana Currently, 29 states and the District of Columbia have legalized the use of marijuana in some manner: Alaska* Arkansas Arizona California* Colorado* Connecticut Delaware D.C.* Florida Hawaii Illinois Louisiana Maine* Maryland Massachusetts* Michigan Minnesota Montana Nevada* New Hampshire New Jersey New Mexico New York North Dakota Ohio Oregon* Pennsylvania Rhode Island Vermont Washington* *Have enacted legislation permitting, or soon permitting, the use of recreational marijuana under certain circumstances
EMPLOYMENT- RELATED QUESTIONS The increase of marijuana legalization laws presents several employment- related questions KEY POINT: Marijuana legalization laws vary widely and, therefore, answers to many of the common employment- related questions will vary depending upon the jurisdiction
OHIO HOUSE BILL 523 Ohio s law does not: Require an employer to permit an employee s use, possession, or distribution of medical marijuana Require an employer to accommodate an employee s use, possession, or distribution of medical marijuana Prohibit an employer from refusing to hire an individual based upon that individual s use, possession, or distribution of medical marijuana Prohibit an employer from disciplining or taking any other adverse action against an individual based upon that individual s use, possession, or distribution of medical marijuana
OHIO HOUSE BILL 523 (CONT.) Ohio s law does not: Prohibit an employer from keeping or establishing and enforcing a drug- free workplace policy Prohibit an employer from keeping or establishing and enforcing an otherwise lawful drug- testing policy Supersede any federal rules governing employment in federally- regulated industries (e.g., DOT regulations)
OHIO HOUSE BILL 523 (CONT.) Effect on Unemployment Compensation If an employee is discharged due to his or her use of medical marijuana, he/she will be deemed to have been discharged for just cause
OHIO HOUSE BILL 523 (CONT.) Effect on Workers Compensation If an employee suffers a workplace injury, and the proximate cause of that injury was due to the employee being under the influence of marijuana, then the employee probably will not be entitled to workers compensation benefits
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: As an employer, can I restrict employees from being under the influence of marijuana while at work? ANSWER: Generally, yes. The exact answer, however, will depend upon state law. Potential exceptions: (1) Obligations to accommodate employees medical use of marijuana (2) Protected status granted to marijuana users Most states permit employers to restrict employees from being under the influence of marijuana while at work. Again, under Ohio s new law, employers can restrict employees from being under the influence of marijuana.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: As an employer, do I have to accommodate employees use of medical marijuana in the workplace? ANSWER: It depends. Again, the exact answer will depend upon state law. Most states have expressly provided in their laws that accommodation is not required. Ohio is one of those states. At least nine (9) states require some degree of accommodation under certain circumstances. No state currently requires employers to accommodate employees recreational use of marijuana. There is no need to accommodate under federal law.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: As an employer, can I prohibit employees use of marijuana under a drug- free workplace law? ANSWER: Generally, yes. Most states protect employers who are regulated by the federal government. Several states also permit employers to prohibit the use of marijuana when an employee s use of marijuana could result in the loss of a federal benefit. Again, Ohio does not prohibit employers from establishing or maintaining and enforcing a drug- free workplace or a zero- tolerance drug policy.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: As an employer, can I test an employee for marijuana, and what actions can I take in response to a positive test result? ANSWER: In most situations, employers will be able to drug test their employees. Generally speaking, employers who drug test will follow the same rules as before. Regardless of the existence of marijuana legalization laws, drug- testing must always comply with: (1) The ADA (2) Any other applicable disability discrimination laws Again, state law will dictate whether and under what circumstances employers have the ability to take adverse action against an employee from being under the influence of marijuana.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: I understand that under the new Ohio law I, as an employer, do not have to permit an employee to use, distribute, or possess marijuana; but, does the new statute create any specific cause of action against employers that I need to be worried about? ANSWER: Ohio s law does not provide any cause of action.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: In the event of a workplace injury, what steps should I take as an employer to protect myself from potential liability, especially in the workers compensation context? ANSWER: Utilize post- accident drug testing. Under Ohio s new law, there will be a rebuttable presumption that an employee is intoxicated or under the influence of a controlled substance or marijuana if the employee refuses the employer s drug test, but only if the employer has posted written notice to employees addressing its use of post- accident drug testing.
COMMON EMPLOYMENT- RELATED QUESTIONS AND ANSWERS QUESTION: I understand that under the new Ohio law, if I, as an employer, discharge an employee for his/her use, distribution, or possession of marijuana, he/she will not generally be entitled to unemployment compensation benefits. Is there anything that I can do as an employer to put me in a better position if I have to fight an unemployment compensation claim under these circumstances? ANSWER: Have a written policy that is communicated to and signed off on by employees.
CLOSING POINTS Do not panic Review and revise policies and procedures Train managers and supervisors Educate employees
CONTACT Patrick F. Haggerty (216) 515-1605 haggerty@frantzward.com Andrew M. Szilagyi (216) 515-1664 aszilagyi@frantzward.com Connect with us: Labor & Employment Law Navigator Blog laboremploymentlawnavigator.com Follow Us! Facebook Twitter LinkedIn For more information, please visit FrantzWard.com.