On March 31, 2021, Governor Cuomo signed into law the Cannabis/Marijuana Regulation and Taxation Act (the “Act”), which provides a framework for the state-sanctioned sale and use of cannabis for adult-use purposes (commonly referred to as “recreational use”). Included in the Act are provisions that provide employment protections for cannabis users. These provisions are effective now. Accordingly, employers should be aware of the Act’s new requirements to ensure compliance. New York joins several other states that have authorized adult use cannabis.   

The Act is complex, and calls for various government actions, including creating a new office of cannabis management to oversee the cultivation, distribution and selling of adult-use cannabis in the Empire State, and further amends the state tax law to address the eventual adult-use cannabis market. Although New Yorkers cannot yet legally purchase cannabis because the system has not yet been set up (and likely will not be set up until 2022), the Act immediately legalizes the use of cannabis in New York State; and further legalizes the possession of up to three ounces of cannabis or twenty four grams of concentrated cannabis.

With respect to employee protections, the Act amended 201-d of the New York Labor Law (“NYLL”), which prohibits New York employers from discriminating or retaliating against employees because of their lawful recreational activities (including the use of consumable products) outside of work. Specifically, the amendment to section 201-d of the NYLL explicitly now provides that employers may not take action against an employee because of the employee’s “use of … cannabis in accordance with state law.” Accordingly, employers are prohibited from discriminating against employees based solely on the employee’s now authorized use or possession of cannabis while off duty and outside of the workplace. Employees who claim that their rights are violated under section 201-d may file a private lawsuit for equitable relief and damages.

Importantly, however, the Act acknowledges some of the unique aspects of cannabis which impact employers. In this regard, the NYLL specifically qualifies that an employer shall not violate the NYLL if:

• The employer’s actions were required by state or federal statute, regulation, ordinance, or government mandate;
• The employee is impaired by the use of cannabis such that the performance of their duties are decreased or lessened by specific articulable symptoms of impairment while working, or where an employee’s specific articulable symptoms of impairment interfere with the employer’s obligation to provide a safe and healthy workspace; or
• The employer’s failure to act “would cause the employer to be in violation of federal law or would result in the loss of a federal contract or federal funding.”

Thus, employers can prohibit the use of cannabis in the workplace and can take appropriate action if an employee is impaired. However, the challenge will be determining impairment. Taking any adverse action based solely on a positive drug test for cannabis will most likely be problematic under the new law, absent satisfying the specific exceptions. Unless required by any federal or state contract or other law, employers should exercise caution with respect to drug testing for cannabis during any pre-hiring process.

Note: New York City employers are already specifically prohibited from utilizing pre-employment drug tests for cannabis, subject to certain exceptions, under the City’s own law which is now in effect, and which we discuss here.

The reason relying solely on a positive drug test for cannabis can be problematic is because cannabis is detectable on drug tests for an extended period of time, and this detection period can be prolonged by consistent use. Thus, a positive drug test for cannabis does not necessarily mean an individual is under the influence or impaired at the time of the test. The recent NYLL amendment makes clear that for an employer to take action against an allegedly impaired employee, the employee must be exhibiting “specific articulable symptoms.” This means from a practical perspective, employers should ensure that managers and supervisors are equipped to identify impairment, and should document their observations prior to taking any disciplinary action. While a drug test may be used to confirm cannabis use, relying on a positive result alone will most likely not comply with the new law.

While the amendments to the NYLL take center stage in terms of employee protections for adult-use cannabis, the voluminous Act includes additional changes to New York law concerning medicinal cannabis which also require employers’ attention. These changes include prohibiting any private business from taking any disciplinary action against an employee solely because of their status as a certified medical cannabis patient, designated caregiver, or because they are employed by a registered organization under the State’s medical cannabis program. Further, the Act specifically identifies that being a certified medical cannabis patient renders the individual as having a “disability” under various laws, including the New York State Human Rights Law. While courts in other states like New Jersey have interpreted that anti-discrimination laws apply to medical cannabis users, the New York legislature has made this explicit.

New York joins several other states that have passed legislation authorizing adult-use cannabis. Along with new regulatory schemes, these statutory schemes can include employee protection language and new drug testing requirements that employers need to understand. With respect to the New York law specifically, employers should review their policies with respect to drug use and drug testing, and ensure proper training for managers and supervisors.