What Does the United States Federal Government Have to Say About Medical Marijuana in State Workers’ Compensation Programs?

In recent years, most states have enacted medical marijuana programs allowing patients to use medical marijuana for treatment of qualifying conditions.

Despite this trend at the state level, marijuana is still considered a “Schedule I” drug under the United States Controlled Substances Act and therefore remains illegal at the Federal level.

However, the United States Federal government has taken a largely hands-off approach to the state medical marijuana programs. The United States Congress has repeatedly passed amendments to the federal appropriations bills effectively precluding the Justice Department from interfering with state medical marijuana programs.

Budget amendments can change from year to year and Justice Department prosecutorial policy can change from administration to administration.

Therefore, patients using medical marijuana take a calculated risk in using a substance which is illegal at the federal level. While the likelihood of prosecution for violation of federal law appears to be remote, it remains a technical violation of federal law, patients using medical marijuana must decide for themselves whether to accept this risk.

However, in the context of workers’ compensation, a patient’s decision to utilize medical marijuana and accept the risk of violating federal law creates potential complications for employers and insurers.

Under state workers’ compensation programs, employers and insurers are obligated to pay for the medical treatment of their injured workers.

What are employers and insurers to do when presented with a workers’ compensation healthcare bill for a drug which remains illegal according to federal law and where it also remains illegal to aid, abet, or conspire to violate the Controlled Substances Act?

If a state workers’ compensation law is interpreted to require the payment of workers’ compensation medical marijuana bills, is the state law a violation of federal law?

Injured workers and their attorneys respond that this is a tempest in a teapot, that there is no threat of federal prosecution, and some have asked their courts to address the issue.

The answers to these questions provided by the courts turn on the interplay between state workers’ compensation laws and federal law which does not vary state-to-state. However, where state courts have attempted to address these questions, the answers have been far from uniform in both reasoning and results.

The conundrum faced by employers and insurers, whether reimbursement of medical marijuana constitutes a violation of federal law, a question which should have the same answer in every state, is not made any easier by divided state court rulings.

After discussing the state court decisions below, we will return to answer the question which started this article: what does the United States Federal government have to say about state medical marijuana programs and workers’ compensation?

State Court Rulings Requiring Payment of Medical Marijuana in State Workers’ Compensation Programs

The state courts which have found that requiring employers and insurers to pay for medical marijuana does not violate federal law include New Jersey, New Hampshire, New Mexico, New York, and Pennsylvania.

The reasoning offered by these courts varies but generally focuses on analysis of federal criminal law and whether an employer reimbursing medical marijuana could be guilty of manufacturing, distribution, or dispensation of a controlled substance.

For these decisions, the analyses of the criminal law question also generally appears to be colored by the federal appropriations rider precluding the Justice Department from interfering with state medical marijuana programs.

New Jersey: In New Jersey, the Superior Court held, that New Jersey’s Medical Marijuana Act “does not require an employer to possess, manufacture, or distribute marijuana – the actions proscribed by the [Controlled Substances Act]” and that therefore there was “no positive conflict between these laws.”?

The New Jersey Court also rejected a theory that employers could be guilty of aiding and abetting a federal crime, as complying with a state court order would not establish sufficient intent and active participation for an aiding and abetting charge. The Court also observed that the employer could not even present a credible threat of prosecution given the federal appropriations riders which have precluded the justice department from going after state medical marijuana programs.

New Hampshire: The Supreme Court of New Hampshire reached a similar conclusion to that of New Jersey, explicitly stating its agreement with the reasoning of New Jersey’s Superior Court.

New Mexico: The Court of Appeals of New Mexico held that an employer’s objection to reimburse medical marijuana as a violation of federal law was “only speculation” given the “equivocal federal policy” demonstrated by Justice Department Memoranda and the Federal Appropriation Bill Rider precluding the justice department from going after state medical marijuana programs.?

New York: The 3rd Department of New York’s Appellate Division held there was no conflict between the state’s medical marijuana program and federal law as an insurer/employer could aid or abet a completed crime and “any such criminal transaction, in this regard is necessarily completed prior to any request being made for reimbursement from the carrier.”

Pennsylvania: On March 17, 2023, Pennsylvania’s Commonwealth Court circulated two precedential opinions holding that: (1) in light of Pennsylvania’s Medical Marijuana Act, Pennsylvania’s Workers’ Compensation Act requires employers and insurers to reimburse injured workers for medical marijuana used to treat work-related injuries; and (2) that this would not constitute a violation of federal law. ?

On this point, the Court focused on the federal statute criminalizing the manufacturing, distribution, or dispensation of a controlled substance and concluded that reimbursement for a claimant’s out of pocket medical expenses for medical marijuana would not qualify as illegal under this statute as the insurer/employer would not be manufacturing, distributing, or dispensing medical marijuana, would not be violating federal law, and would not even “be at risk of facing federal prosecution by doing so.” These rulings are precedential and employers and insurers in Pennsylvania now face the prospect of penalties under Pennsylvania’s Workers’ Compensation Act if they fail to reimburse claimants for medical marijuana.

State Court Rulings Holding Workers’ Compensation Obligation to Pay for Medical Marijuana Violates Federal Law

Massachusetts: Massachusetts’ Supreme Judicial Court held that “It is not unreasonable, given the current hazy regulatory environment and shifting winds of Federal enforcement, for insurance companies to fear that paying for a claimant's marijuana could expose them to potential criminal prosecution” and concluded that medical marijuana expenses are not compensable under Massachusetts’ Workers’ Compensation Act.

Maine: The Maine Supreme Judicial Court has held that “[c]ompelling an employer to subsidize an employee's medical marijuana will require the employer to commit a federal crime—aiding or abetting the distribution and possession of marijuana” and that “the magnitude of the risk of criminal prosecution is immaterial in this case. Prosecuted or not, the fact remains that [employer] would be forced to commit a federal crime if it complied with the directive of the Workers' Compensation Board.”

Florida: The Florida First District Court of Appeal held that “Even though some states—including Florida—permit the purchase, possession, and use of marijuana for medical purposes, federal law must prevail in circumstances such as this. We are bound by the United States Constitution to apply the CSA over a provision in the Florida Constitution to the contrary.” Additionally, Florida’s state law explicitly states that medical marijuana is not included in their state workers’ compensation program.

Minnesota: In October of 2021, the Minnesota Supreme Court decided two cases holding that the Controlled Substances Act preempts state law requiring payment of workers’ compensation medical marijuana. ?The Minnesota Supreme Court noted its agreement with the Supreme Judicial Court of Maine that “the CSA preempts mandated reimbursement of an employee’s medical cannabis purchases under an impossibility theory of conflict preemption. Specifically, we agree that a right provided to an individual under Minnesota’s workers’ compensation law to secure reimbursement for the use of medical cannabis to treat a diagnosed medical condition cannot be ‘converted into a sword that’ requires an employer to pay for those purchases and thus engage in conduct that would violate the CSA.’”

While that recognizing the federal government’s position on prosecution of cannabis offense remains in flux the Court also cited to a precedential federal appeals court decision “the appropriation riders ‘do[] not provide immunity from prosecution for federal marijuana offenses.”’ The riders are merely temporary measures that can be rescinded at any time, thus allowing the government to ‘prosecute individuals who committed offenses while the government lacked funding.’”

Addressing the temporal argument from New York, the Minnesota Supreme Court cited a precedential federal appeals court decision “aiding and abetting a drug offense may encompass activities, intended to ensure the success of the underlying crime, that take place after . . . the principal no longer possesses the [illegal substance].”

Addressing the mens rea reasoning from New Jersey, the Minnesota Supreme Court cited the “Supreme Court of the United States has consistently held that compelling a person to act does not necessarily negate the actor’s mens rea.” Therefore, an order compelling an employer/insurer to reimburse medical marijuana possession “compels [employer’s] active participation in the possession that is criminalized by the CSA.” ?Likewise, the Court concluded that order compelling payment for workers’ compensation medical cannabis “makes [employer] criminally liable for aiding and abetting the possession of cannabis under federal law.”

What the United States Federal Government Has to Say About Medical Marijuana, State Workers’ Compensation Programs, and Federal Law

The injured workers in the two Minnesota cases outlined above did not agree with the opinion of Minnesota’s Supreme Court. On January 11, 2022, they filed a Petitions for a Writ of Certiorari to the Supreme Court of the United States. ?

Less than six months later, on June 21, 2022, the United States Supreme Court denied the petitions. However, prior to denying the petitions, the high court invited the United States Solicitor General to file an amicus brief expressing the views of the United States.

A review of this amicus brief which outlines the position of the United States Federal Government may assist employers and insurers in making determinations regarding reimbursement of medical marijuana.

In reading the following excerpts consider that these are views expressed by the United States Federal Government under the Administration of President Joe Biden which is, as a matter of general policy, not ardently opposed to medical marijuana.

In its amicus brief, the United States argued against granting certiorari as “the judgments below [from Minnesota] are correct for the straightforward reason that when a federal law such as the CSA prohibits possession of a particular item, it preempts a state law requiring a private party to subsidize the purchase of that item.”

The government’s analysis differentiated the laws in question from state laws generally decriminalizing medical marijuana as “fundamentally different because they compel even unwilling third parties to subsidize federal possession crimes.”

The government continued “If States could enforce laws compelling third parties to subsidize federal crimes, they could directly undermine congressional determinations. For example, no legal principle would preclude a State from requiring private employers to reimburse the use of other federally prohibited products or substances, such as LSD and other psychedelic drugs, based on perceived benefits.”

Speaking to the federal appropriations rider, which prohibits the Justice Department from interfering in state medical marijuana programs and which appears to have influenced several of the state court decisions requiring reimbursement of medical marijuana, the United States Federal Government argued that: “A limitation on funding for the enforcement of federal law is not a repeal of the CSA’s substantive criminal prohibitions. Among other things, Congress is in no way bound to enact similar appropriations riders in future years…”

In the specific context of the case on appeal, the government observed that the “federal government has neither prosecuted respondents nor expressed any desire to do so.” However, more broadly it also warned that “future prosecutions could encompass present-day conduct. See 18 U.S.C. 3282 (general five-year federal statute of limitations for non-capital offenses).”

Conclusion

Where state courts have held that state law requires reimbursement of medical marijuana, employers and insurers have difficult decisions to make.

The position of the United States Federal Government is evolving but marijuana remains a Schedule I controlled substance and although federal criminal prosecution appears unlikely it is not an impossibility.

Those employers and insurers who wish to avoid these risks should consider further appeals in state courts where available as well as federal court.

Employers and insurers should continue to follow developments in this area of the law and discuss specific questions with an attorney.