The Stoned Age: What the CBD Craze Means for Employers and Their Substance Abuse Policies

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Seyfarth Synopsis: The federal Drug Enforcement Agency (DEA) recently announced that drugs that include CBD (cannabidiol) with less than 0.1% of THC (tetrahydrocannabinols) are now considered Schedule V drugs provided they are approved by the federal Food and Drug Administration (FDA). The move marked the first time the DEA removed any form of cannabis from Schedule I and was due to the FDA’s approval of Epidiolex, a non-synthetic cannabis-derived medicine used to treat severe epilepsy. Yet, setting aside this very limited exception, marijuana and CBD remain illegal under federal law. And while CBD is projected to be a $22 billion industry by 2022, many employers remain hazy about this extremely popular product and the implications it has on their employees and businesses.

The Science Behind CBD

Hemp and marijuana are different strains of the cannabis sativa plant. Despite being derived from the same plant, there are differences between hemp and marijuana.

Hemp is a strain of cannabis that historically has been used to make industrial products, including cement, paper, clothing, and more. At present, hemp is no longer a Schedule I controlled substance but, instead, is now classified as an agricultural commodity provided its THC concentration does not exceed 0.3%, an amount generally viewed to be too low to produce a psychoactive effect.

Marijuana, on the other hand, has a higher THC concentration, the main ingredient that produces the psychoactive effect and makes people feel high. Marijuana has been listed as a Schedule I controlled substance since 1972. Being labeled a Schedule I drug means, according to the federal Controlled Substances Act, the drug has no currently accepted medical use and has a high potential for abuse. Additional Schedule I drugs include heroin, LSD, and ecstasy. Federal law considers marijuana to be more dangerous than cocaine, which presently is a Schedule II drug.

Marijuana and hemp both contain CBD, which is now being marketed and sold in a variety of forms, including oil (the most popular), health and beauty products, vapors, beverages, and infused edibles, such as chocolates and gummies. Pure CBD usually will not report a positive test result for marijuana because drug tests typically look for THC levels that are too low to be detected from pure CBD. For this reason, according to the National Institute on Drug Abuse, employees generally are not at risk of becoming intoxicated or impaired if they use pure CBD. However, if the CBD product contains a sufficient amount of THC, it is entirely possible the product could cause a positive drug test result for marijuana. Regardless, the DEA still considers CBD a Schedule I controlled substance and, thus, illegal under federal law.

A Product in Need of Regulatory Oversight?

A potential issue with CBD is that it remains unregulated and, thus, consumers, including employees, are left in dark about what they actually are ingesting. According to the National Organization for the Reform of Marijuana Laws (NORML), while some studies have shown that CBD can have therapeutic benefits, including anti-convulsant, anti-psychotic, analgesic, and anti-diabetic effects, it notes that some CBD products may not be living up to how they are being marketed in terms of both quality and safety. Specifically, NORML wrote, “in almost all instances, commercially available CBD products contain far lower quantities of CBD than are necessary to yield therapeutic effects in clinical trials.” And, some products that tout themselves as being either “THC-free” or pure CBD do, in fact, have THC or some other chemical or synthetic drug. In a recent study in Forensic Science International, researchers tested nine CBD oils and found that two of the oils had THC and four had 5-fluoro MDMB-PINACA (5F-ADB), a Schedule I controlled substance that is known on the street as “Spice.” This is important because in 2014, the DEA reported 2,311 incidents involving medical intervention or death relating to 5F-ADB.

The FDA has these same concerns and recently held hearings to determine how best to regulate CBD products. The outgoing director of the FDA testified to Congress that it could take several years before the FDA will be in a position to regulate CBD given what he views will be a “highly novel rulemaking process.” More recently, the FDA noted while it “recognize[d] the potential benefits of CBD,” it remains concerned about public safety. For example, during its review of Epidiolex, it discovered that CBD can cause harm to the liver, a claim many dispute as being based on a flawed scientific methodology. The FDA also pointed to what they view to be “unsubstantiated therapeutic claims” that CBD can treat serious illnesses, which might result in consumers avoiding medical treatment in favor of a product with potentially limited medicinal value. How and when the FDA intends to address the issue remains to be seen.

What Should Employers Do?

While marijuana and CBD are illegal under federal law, the CBD trend is expected to get trendier. Forbes Magazine recently reported that CBD sales in the United States alone are expected to reach $22 billion by 2022. Beyond CBD, more than half of the states have enacted medical marijuana laws and more than 10 jurisdictions allow adults to use marijuana recreationally. And, states are getting in the business of legalizing and regulating CBD, including Florida, Georgia, Iowa, Texas, Wisconsin, and Wyoming, among others. There is every reason to believe that more states will follow suit.

Recreational marijuana laws still allow employers latitude in enforcing their drug and alcohol testing and substance abuse policies. On the other hand, how an employer treats a job applicant or employee using medical marijuana will vary by state and it no longer is the case that employers in jurisdictions with pot friendly laws can simply state that they follow federal law and, thus, any marijuana use is a violation of company policy. Of course, employers subject to the Department of Transportation’s drug and alcohol testing regulations (Part 40) cannot ignore a positive test for marijuana, even if used medicinally.

CBD presents the same challenges to employers as does medical marijuana with the potential for additional problems. Do applicants and employees really know what’s in their CBD product and the impact, if any, that such use might have on their employment? If an employee justifies a positive marijuana test result by their CBD use and presents the employer what appears to be a “CBD pure” product as proof, how will an employer know what caused the positive result – is the employee smoking recreational marijuana or using what they genuinely believe to be an unregulated “pure” CBD product that unfortunately is spiked with THC? In states that do not have medical marijuana laws, the burden falls squarely on the applicant or employee to prove they are not using marijuana. However, in medical marijuana states, the employer may (depending on the state at issue) have a duty to accommodate the underlying medical condition prompting CBD or medical marijuana use or may be restricted in its ability to take action based on solely a positive marijuana test result.

We continue to recommend that employers exercise caution when dealing with applicants and employees using medical marijuana. The same holds true for CBD. Before taking any action against medical marijuana or CBD users, employers should review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.

Employers also may need to consider:

  • revising their policies to address CBD use;
  • training their managers and supervisors on how to address situations where an employee defends a positive drug test by claiming use of CBD;
  • educating employees about CBD; and
  • having a conversation with their drug testing providers about CBD and the lab’s drug testing and reporting processes.

Seyfarth Shaw will continue to monitor legal developments at the federal and state level.

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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