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On November 8, 2016, California voters passed Proposition 64 – the Adult Use of Marijuana Act. This law has many effects for the use and sale of marijuana within California. While the guidelines for personal use are fairly clear within the law, cannabis business owners face greater uncertainty. Their challenge is to adapt their business model to the new forms of industry regulation.

Business experts expect California’s cannabis industry to quickly become the largest marijuana market in the country once the provisions of Proposition 64 take effect. For reference: Washington and Colorado had over one billion dollars’ worth of marijuana sales in the first half of 2017. California, by comparison, had over two billion dollars in sales of just medical marijuana in 2016, before the bill had even passed, The Hill reported. Financial experts claim that few industries offer the growth potential of legal marijuana. Yet this profitable and exciting market is also young and untested, and its regulations change almost daily. Successful cannabis businesses must adapt their business models and prepare for the coming effects of Proposition 64.  Continue reading

Marijuana users across the nation have long faced employment sanctions related to their cannabis use – even when that use is sanctioned under state law by medical marijuana provisions. On November 9, 2016, personal use and cultivation of recreational marijuana became lawful within California. Many cannabis users assumed that – in addition to their right to use marijuana recreationally – their workplace rights would be protected, as well. Unfortunately they are not.

Employment Rights and Recreational Use Law

Current California case law allows employers wide discretion to create workplace drug policies for pre-employment drug testing and employee drug use. In 1997, the Superior Court of Los Angeles considered a constitutional challenge to the City of Glendale’s drug policy. (Loder v. City of Glendale,14 Cal.4th 846). Lorraine Loder alleged that the drug policy – which required drug tests of any applicant, and any current employee who applied for a promotion – violated the privacy guarantees of the state Constitution. In a somewhat surprising (and verbosely-dissented) opinion, the Court determined that pre-employment testing did not violate an applicant’s expectation of privacy, but promotional testing for current employees did. In general, the court disclaimed an employer’s right to conduct random drug screenings on employees without having particular reason to suspect drug use. The court left open an employer’s broader right to fashion wide-reaching drug policies, provided those policies did not otherwise infringe on state or federal law.

In 2008, the Supreme Court of California considered an employer’s drug policies in conjunction with an employee’s lawful use of medical marijuana (Ross v. RagingWire Telecommunication Inc., 174 P.3d 200). The Court – noting that the Compassionate Use Act contained no employment provisions – determined that there was no law or public policy which would require an employer to accommodate the medical use of marijuana, and affirmed RagingWire’s decision to fire Mr. Ross. This, too, created a broad right of employers to fire employees on the basis of marijuana use.

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