On April 13, 2021, the New Jersey Supreme Court unanimously upheld an Appellate Division decision affirming a workers’ compensation order which directed M&K Construction to reimburse a former employee, Vincent Hager, for the ongoing costs of medical marijuana he was prescribed following a work-related accident which left him with chronic pain. On appeal, M&K contended that New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act (“Compassionate Use Act”) was preempted by the federal Controlled Substances Act (CSA), and compliance with the workers’ compensation order would subject the company to potential federal criminal liability for aiding-and-abetting civil conspiracy. M&K also argued that medical marijuana was not reimbursable as reasonable or necessary under the state’s Workers’ Compensation Act and, finally, that M&K, as a workers’ compensation carrier, fit within an exception to the Compassionate Use Act for government medical assistance programs or private health insurers and was therefore not required to reimburse Hager for his marijuana costs.

The New Jersey Supreme Court disagreed with M&K on each point. The Court held that M&K did not fit within the Compassionate Use Act’s limited reimbursement exception because the exception applies only to government medical assistance programs and private health insurers, and does not extend to workers’ compensation carriers. The Court further held that Hager presented sufficient credible evidence to establish that the prescribed medical marijuana represents, as to him, reasonable and necessary treatment under the WCA. Specifically, the Court held that “medical marijuana may be found, subject to competent medical testimony, to constitute reasonable and necessary care” under the state’s workers’ compensation scheme. The Court explained further that “competent evidence relating to medical marijuana’s ability to restore some of a worker’s function or, as in Hager’s case relieve symptoms such as chronic pain or discomfort, is sufficient to find such a course of treatment appropriate.”

Finally, the Court interpreted Congress’s appropriations actions of recent years as suspending application of the CSA to conduct that complies with the Compassionate Use Act. Because Congress has prohibited the DOJ from using funds to interfere with state medical marijuana laws through appropriation riders, there is no positive conflict between the CSA and the Compassionate Use Act. As a result, the Court found that the Compassionate Use Act was not preempted by the CSA and that M&K did not face a credible threat of federal criminal aiding-and-abetting or conspiracy liability. The Court ordered M&K to reimburse costs for, and reasonably related to, Hager’s prescribed medical marijuana.