Legal Marijuana: The Surprising New Challenge for Employers

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Marijuana laws are changing across the country, and having a surprisingly profound impact on employers – not just in Colorado.

In addition to the existing 24 states and District of Columbia that have legalized marijuana for medical use and the four states that allow recreational use, 13 states are currently considering legalization measures – eight of which will vote on this matter in November.

Businesses must now determine how to operate in an era when marijuana, still federally illegal as a Controlled Substances Act Schedule 1 drug, is increasingly being legalized at the local and state levels.

With this quickly evolving landscape, now is the time for companies to consider their position regarding the use of marijuana by their employees, but according to a survey recently released by HireRight, only 5% of employers say they (formally) accommodate marijuana use, 39% do not accommodate marijuana use and 52% say they don’t have a policy either way.

Many employers and job seekers aren’t sure where state laws end and federal laws begin.

And even where it may be legal at the state or local level to purchase and use marijuana, many states have specific exemptions for employers which are further exemplified by court cases that have upheld an employer’s right to not accommodate an employee’s marijuana use – whether medically recommended and legalized pursuant to state statute or in a situation where an employee has the right to purchase and use marijuana in their home state.

These disparities have created confusion for employers and many lack a coherent policy that covers a multi-state workforce.

However, while employers attempt to make sense of existing and changing laws alongside employment attorneys, the growing gap in drug policies is creating liability in hiring practices amplifying the importance of having a clear, consistent and legally acceptable policy addressing marijuana to mitigate risk to the organization.


How can a company determine what policy is the right fit for their workforce and the responsibilities associated with the job?

In certain industries federal law mandates drug screening.

In the transportation sector, U.S. Department of Transportation regulations require that safety sensitive employees be screened for marijuana and other drugs.

For other industries, the lines are a bit more blurry.

Consider an industry like manufacturing, where federal rules don’t explicitly mandate drug screening, but job responsibilities and the use of machinery suggest that it’s probably a good idea.

For positions considered white-collar such as those in corporate settings, for example, fellow employees or clients may not necessarily be in potential physical harm due to marijuana use, but it can have an impact on productivity.

The direct economic impact of illicit drug use directly to employers is $198 billion and the U.S. Department of Labor believes there are 14 million active drug users in the workforce.

That’s $14,000 in employer drug-related costs per drug using employee each year on average.

As a best practice, a company’s policy on marijuana use should first and foremost follow the legal requirements of the state and relevant federal regulation (if applicable) and, if there are none, reflect the responsibilities and expectations of the job, as well as the company’s risk threshold.


Taking into account your talent pool and talent acquisition efforts.

Regardless of job requirements, employers must also contend with the pressing talent shortage, which may be exacerbated by the expanding map of marijuana legalization and changes in the way society views its use.

The New York Times recently uncovered unsurprisingly that some employers who screen for marijuana – including in states where it’s still illegal – are, indeed, struggling to fill jobs because of the pervasiveness of marijuana use.

This is true of the ski industry in Colorado, for example, where employers are finding that if they do have policies against marijuana and screen for it, they find it challenging to recruit candidates into new positions and retain employees that can pass a drug test.

It’s a delicate balance, especially in safety-conscious industries.

Fully realizing your company’s own risk threshold as well as benchmarking against what your competitors or other companies in your geographic proximity are doing – as you’ll vie with them for talent – is also important when building your policy addressing marijuana use.

Further complicating the matter is the delicate dance employers and candidates engage in ahead of a hiring.

If a candidate realizes halfway through the process that there’s a drug screen that he or she isn’t going to pass, they will likely stop the prospective employer throughout the interview and evaluation process.

This is why developing a clear marijuana policy – whichever way an employer may land on the issue – that can be communicated early in the candidate screening and onboarding process is critical, saving time and money in a competitive search for talent.


Balancing impact on culture and best practices.

Consider the variations in marijuana screening policies between a Silicon Valley start-up or a graphic design firm versus a law or accounting firm.

There are some industries and jobs where prohibiting and screening for marijuana usage may not be needed or be a fit for the organization.

There are some for whom it’s not only critical but may also be legally required.

Either way, an organization’s culture will undoubtedly be impacted.

As Peter Drucker said, ‘culture eats strategy for breakfast.’ Culture should be considered when developing and introducing marijuana-related policies.

As a best practice, policies should fit with company DNA, protect the company and workers and consider the aforementioned federal, state, and industry regulations.

This decision warrants consultation with an employment attorney and HR leaders, but also should involve deliberation at the executive level – the gatekeepers of company culture.

Marijuana in the workplace is a complex issue, and one that will only require more attention as states continue to legislate on this issue.

It is one that business leaders – and job seekers – should be considering now, as its impact has already arrived.

The talent shortage may be one of the most surprising and unintended consequences of marijuana legalization, but the others are no less challenging.

Smart business leaders will take time to consider a policy now in an effort to avoid litigation and liability later.

Download: Employers Guide to Medical Marijuana [eBook]
Employers Guide to Medical Marijuana
Employers Guide to Medical Marijuana [eBook]

In this eBook, we explore the reasons why people seek medical marijuana, the medical pros and cons, employer safety concerns, and the landscape of regulatory issues created by varying state statues.

Download Now


Dr. Todd Simo

Dr. Simo is the Chief Medical Officer and the Managing Director of Transportation at HireRight. He served as HireRight’s medical director starting in 2009 and was promoted to chief medical officer in 2015. Dr. Simo was also appointed to the role of managing director of transportation and drug & health screening in 2018. Dr. Simo came to HireRight with a decade of experience in the medical consulting arena. Before that he was the medical director for an occupational health clinic in Virginia and owned a consulting firm providing medical director services to employers across the United States

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