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Legalized use of cannabis in Minnesota: What employers need to know


May 19, 2023

The increasing social acceptance and legalization of cannabis across multiple states the past decade has brought with it the need for employers to adjust to fit a new normal.

As for Minnesota, where it is legally the new normal after Gov. Tim Walz signed a bill in May decreeing such, there are many lingering questions for those managing employees and for those overseeing human resources. This article addresses some of the most pertinent information necessary as legalization quickly approaches Aug. 1, 2023.

How we got here

Growing acceptance of cannabis use in recent years led to the proliferation of state laws legalizing medical and recreational cannabis consumption, as well as a push for employment protections for off-duty use.

Despite the federal status of cannabis remaining illegal, 37 states have now approved medical cannabis use, and 18 of those states — and Washington, D.C. — have also approved recreational use. However, employers should note that workplace protections vary by state and some cities even have their own rules. Employers with employees in other states will, therefore, need to carefully track and follow these evolving regulations.

At the federal level, cannabis is listed as a Schedule I drug under the Controlled Substances Act, which means it is deemed to have no medical value and a high potential for abuse. Recent efforts to reform cannabis law have stalled in Congress. Federal cannabis law reformers had hope in 2021 and 2022 with what was perceived as a more liberal administration, broad support by Americans and even bipartisan backing. There is also proposed legislation in the current federal legislative sessions to liberalize cannabis laws.

Employer points

Evolving cannabis laws — and their impact on the workplace — vary significantly based on regulations and employee protections in each state. Even where laws have been passed, there are generally exemptions, including for safety-sensitive positions involving driving or piloting vehicles, ships or planes, and where testing is required by other laws. Some workers, such as drivers who are subject to the U.S. Department of Transportation’s rules, must regularly pass drug tests, regardless of state and local cannabis laws.

Though cannabis possession, use and purchase by those 21 and older is now legal, it could take well into 2024 before dispensaries are up and running with adequate retail supply. Supporters say it could take 18 months until there is adequate supply for dispensaries to open.

A newly created Office of Cannabis Management was established to help calibrate supply and demand of cannabis, subject to quality controls. But people are also permitted to grow their own plants at home for personal consumption within limits.

Drug testing

Minnesota employers are required to have a formal drug testing policy distributed to employees in advance, typically at time of hire. Under the new legislation, employers may not test for cannabis on a pre-employment or random basis with limited exceptions. Testing for other drugs and alcohol is still allowed.

Testing for “reasonable suspicion” drug use or intoxication is still allowed but no clarity was provided on what constitutes reasonable suspicion. Supervisors and managers should be trained and a reasonable suspicion checklist should be developed and applied uniformly.

A significant challenge with cannabis drug testing is that THC (the psychoactive component in cannabis) is detectible in a drug test for several weeks following use. Thus, recreation and off-duty use are legal, though no testing can determine when the product was consumed. Workplace drug tests don’t measure whether someone is high at the time of the test, just if they’ve recently used. Therefore, it is likely that objective, observable behaviors will be critical to support any adverse employment action stemming from use and level of intoxication.

More and more employers are deciding to stop drug testing altogether or are still giving the five-panel test but asking the lab not to provide results for THC. Due to staffing shortages, many private companies have loosened hiring requirements and no longer test for cannabis use as a condition of employment.

As an example, Amazon, the nation’s second largest private employer, announced plans last year to stop requiring job candidates to pass a cannabis drug test (though the company will still test at other times, such as after workplace accidents). Amazon executives have said that the growing number of states legalizing cannabis, equity concerns and the tight labor market all factored into their decision.

Nationally, only 4.4% of workers failed tests that Quest Diagnostics, a leading clinical laboratory, processed in 2020, which is up from 3.5% in 2012. The rate was also slightly higher — 4.8% — in states that allow adults to buy recreational cannabis.

Employers not covered by federal rules likely have some thoughtful decisions to make about whether to include THC in any, or just some, drug screening panels, such as pre-employment (which is not allowed in Minnesota under the new bill) or post-accident. Employers that drug test typically use a five-panel screen that includes amphetamines, cocaine, cannabis, opiates and phencyclidine (PCP). However, OSHA prohibits mandatory post-accident drug testing unless there is reasonable suspicion that alcohol or drug use contributed to the accident.

Under Minnesota law, employees not agreeing to be drug tested for reasonable suspicion or post-accident testing are considered as a positive test and offered evaluation and treatment before termination. Additionally, employees testing positive for drugs should be offered evaluation and treatment. If the employee refuses treatment or compliance with the recommended treatment plan, they could be disciplined including termination. Legal counsel should be consulted before adverse employment action.

Safety concerns

Workplace safety considerations remain paramount and vary depending on the type of workplace. Employers should decide their policy, have a plan, train supervisory staff and clearly communicate the policy to employees. Recreational cannabis should be treated like recreational alcohol, with the additional understanding that unlike alcohol, cannabis is still illegal under federal law and evidence of use may remain in the body for several weeks.

Handbooks and contract modifications

Employers should have their handbook and drug-use policies vetted by local employment counsel because legal rules and practical effects vary greatly by state.

Employers should have internal discussions, then memorialize their decisions with updated and cannabis-specific policies. Minnesota requires employers to have a formal drug-testing policy that employees must be aware of and consent to.

Some policy decisions will come down to employers’ risk tolerance and culture. For example, are they OK with employees using cannabis with clients?

Client contracts regarding mandatory drug testing before assignment may need to be modified.
Criminal background checks may also need to be modified to exclude misdemeanor use for cannabis convictions, which will be expunged.

Employees could be disciplined for on-the-job use or possession, similar to current drug and alcohol possession on employer premises. Off-duty use, like legal drug and alcohol consumption, cannot result in employee discipline unless there is reasonable suspicion of impairment.

Workplace policies should clearly state that employees can’t be impaired at work. Workers need to know they can’t have an edible at lunch and come back to the office. Employers must address the way the world is now and not use dated drug and alcohol policies.

Medical accommodation

Employers don’t have to tolerate on-the-job intoxication even if a worker is using cannabis for medical reasons, so accommodations might include additional time off or a leave of absence for the period the worker needs to use the drug.

The Minnesota Medical Cannabis Registry will continue to be maintained. Employers should note that a few states, including Minnesota, afford protections to registered medical cannabis users and may require that employers engage in an interactive process to see if a reasonable accommodation under the Americans with Disabilities Act Amendments Act (ADAAA) can be made in some circumstances.

As a practical matter, this means that if an employee in one of these states is using cannabis with a medical card, employers cannot fire them on that basis.

The underlying issue is that a medical cannabis cardholder may have an independently qualifying medical condition. Therefore, employers may want to engage in an interactive process even if it’s not required by law.

Stay vigilant

As state and federal laws regarding recreational use of cannabis and drug-testing continue to evolve, employers should review employee handbooks, offer letters and drug testing policies and procedures to remain compliant. This is especially true with multistate or multinational employers.

Larry Morgan, MA, SPHR, SHRM-SCP, GPHR, is the President of Orion HR Group and frequent MNCPA instructor and author. He is also the expert behind the MNCPA HR Hotline. Morgan brings more than 40 years of HR experience to the MNCPA in areas that include retail, high-tech, manufacturing and financial services.

Cannabis resources for MNCPA members

Has this new legislation left you with more questions than answers? Here are two ways to connect with author Larry Morgan for answers:  

HR Hotline
Call or email for a response within one business day.

Use a reasonable suspicion checklist

Check out the MNCPA Cannabis Resources page

Are you in need of more information about adult-use cannabis in Minnesota? Head to the MNCPA Cannabis Resources page to find articles and resources covering topics from human resources to tax implications.