Amendments to Maryland’s Recreational Marijuana Legislation Could Affect Employers

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Proposed legislation that would govern recreational marijuana use in Maryland was amended earlier this month in the House of Delegates to remove employer protections.

Consistent with existing state policy regarding medicinal cannabis use, House Bill 556, as originally written, maintained Maryland employers’ rights to deny employment to an individual who tests positive for cannabinoids or cannabinoid metabolites, provided that the test was conducted in accordance with the employer’s established drug testing policy. The bill also retained employers’ rights to discipline employees for testing positive for cannabis.

The bill was referred to the House Economic Matters Committee, which voted in favor with amendments on March 2. The bill was brought before the House a second time on March 8 and passed with additional amendments, including the removal of the aforementioned employer protections. The revised bill was read a third time on Friday and passed the House by a vote of 103-32. The bill was sent to the Senate for review and then referred to the Senate Finance, Budget and Taxation Committee on Monday but still has ways to go toward passage before the General Assembly ends its session April 10. (Cross-filed legislation in the Senate, Senate Bill 516, remains in committee.)

In light of the changes to the legislation, Maryland employers should be on notice that their ability to deny employment to applicants and discipline employees based on cannabis testing results may soon be a thing of the past. Though the text of the bill could change in a number of ways before passage, the changes reflected in the latest version of the bill, including removing the rights of employers to deny employment to an individual who tests positive for cannabinoids or cannabinoid metabolites or discipline employees who test positive for cannabis, are a significant departure from existing state policy on cannabis-related employment decisions. In addition, employers with a multi-state workforce should be mindful that adverse hiring decisions and employee discipline based on cannabis testing results may already be prohibited in states with strong employment protections for users of recreational cannabis.

Maryland lawmakers are working on the legislation after state voters last year overwhelmingly approved a constitutional amendment legalizing recreational marijuana for individuals age 21 and over. The amendment required the General Assembly to create the framework for the use, distribution, possession, regulation, and taxation of cannabis within the state.

The bill seeks to, among other things:

  • Rename the Maryland Alcohol and Tobacco Commission to the Alcohol, Tobacco, and Cannabis Commission;
  • Establish a regulatory and licensing system for adult-use cannabis;
  • Impose sales and use taxes on the sale of adult-use cannabis;
  • Establish an independent Cannabis Regulation and Enforcement Division in the commission; and
  • Require the division to convert medical cannabis licenses to licenses to operate medical and adult-use cannabis facilities by July 1, 2023.

We expect to see more developments in the coming weeks as HB 556 continues to work its way through the General Assembly and the regulatory framework begins to take shape. The Labor & Employment Team of Miles & Stockbridge will continue to monitor and report on these fast moving developments as they arise.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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