The employer argued that the workers’ compensation order to reimburse Hager for his medical marijuana violated the federal Controlled Substances Act (“CSA”)[1], which criminalizes the possession, manufacture, or distribution of marijuana and therefore preempts New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act (“Jake Honig Act”).[2] The employer further argued that the order required it to aid and abet the employee’s illegal use and possession of marijuana in violation of the CSA. The employer also argued that workers’ compensation insurers should be treated as private health insurers. Pursuant to the Jake Honig Act, private health insurers are not required to cover the costs of medical marijuana.
The court disagreed with the employer on all arguments. First, it found that by reimbursing the employee, the employer was not in possession of, manufacturing, or distributing marijuana and thus not in violation of the CSA. Accordingly, it was not impossible for the employer to comply with both the CSA and the Jake Honig Act, and conflict preemption did not apply. It also found that complying with the order did not rise to the required level of intent to be found guilty of aiding and abetting under the CSA. The court determined the workers’ compensation insurance is not a private health insurer, and thus the Jake Honig Act’s exception was inapplicable. Not only is the Jake Honig Act’s exception expressly limited to government medical assistance programs and private health insurers, but elsewhere the legislature defines “health insurance” as expressly excluding “workmen’s compensation coverage.”[33]
While the employee was a particularly sympathetic plaintiff and his case hit on the hot button topics of not just medical marijuana but the opioid epidemic in this country, the Appellate Division’s ruling is also consistent with other actions taken in New Jersey to provide increased employment protections to consumers of medical marijuana. This decision follows on the heels of the 2019 amendments to the Jake Honig Act, expressly stating that it is an unlawful to take any adverse employment action against an employee who is registered with New Jersey’s medical marijuana program based solely on the employee’s status as a registry identification cardholder. While the Jake Honig Act does not obligate employers to permit medical marijuana use on premises or during working hours, it does now require that employees who fail a marijuana drug test be given the opportunity to prove that they are participants in the medical marijuana program.