What Does Legal Cannabis Mean for Your Business?


In the past, dealing with cannabis in the workplace was fairly black-and-white. Cannabis was illegal, and employees caught using cannabis (and other drugs) were subjected to serious consequences. However, as cannabis becomes legal all across the nation, the situation becomes much more confusing for employers. Below is some information to help you understand how these changes will affect your company, your risk exposures, and your insurance. 

Cannabis’s Current Legal Status

Medical cannabis is legal in a total of 34 states, as well as the District of Columbia. In addition, 10 states and the District of Columbia also allow recreational cannabis. With legalization efforts only increasing, it is likely that cannabis’s acceptance will only become more widespread.

Why It Matters for Employers

Employers have a responsibility to maintain the safety of their workplace, as well as to keep their employees safe. However, employers cannot reasonably force employees to avoid activities in their free time that would otherwise be legal. To further complicate matters, cannabis remains illegal at the federal level. Under federal law, keeping a “drug-free workplace” means that employees cannot be under the influence of cannabis while on the job, even if state law allows for legal cannabis usage.

Other Complicating Factors

In addition to differences in state and federal law, other issues also complicate the issue of cannabis in the workplace. Some of these issues include:

  • Testing difficulties - Many tests for cannabis intoxication, including urine tests, are unable to exclude past usage. This makes it impossible to tell whether an employee is currently intoxicated or simply has used cannabis in the past few weeks, when they were off the clock.
  • State testing laws - While some states protect an employer’s right to ensure that the workplace remains drug-free, others impose restrictions on cannabis testing. Nevada recently made headlines for prohibiting employers for screening for cannabis, and New York and other states are moving to follow suit.
  • State employee protections - Some states protect an employee’s right to use cannabis, provided that the employee is doing so legally.

Seeking Assistance with the Management of Cannabis in the Workplace

All of these issues are complicated and expose the company to a variety of risks. For this reason, it is best to consult a third party who understands the relevant laws and can help you minimize your company’s exposure to liability.

At Axis Insurance Services, we have a team of experts who specialize in helping companies mitigate risks, including those posed by cannabis in the workplace. Contact us today to find out how we can help your company by protecting you with management liability insurance and ensuring that you are in compliance with all applicable laws.

About Axis Insurance

At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.

axis insurance services, management liability, management liability insurance, Cannabis, Legal Cannabis, Cannabis in the Workplace

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