UPDATE: On February 22, 2021, Governor Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act into law.

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On the heels of New Jersey voters ratifying an amendment to the state’s constitution to permit the recreational use of marijuana, the New Jersey Legislature on December 17, 2020 passed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (NJCREAMMA), removing marijuana as a Schedule I drug and legalizing personal use of cannabis for adults over the age of 21.  Governor Murphy is expected to sign this legislation.  While the enactment of this statute undoubtedly will result in major changes to many areas of New Jersey life and law, the impact on employers is especially significant.  New Jersey is poised to become the first state to explicitly protect employees who engage in off-work marijuana use from adverse employment action taken on the basis of that use, and to limit an employer’s ability to act on the basis of a positive marijuana test after employment has started. 

Overview of the Law

Since 2019, the New Jersey Compassionate Use Medical Marijuana Act (as expanded by the Jake Honig Compassionate Use Medical Cannabis Act), requires New Jersey employers to engage in an interactive process to reasonably accommodate a qualifying employee’s use of medical cannabis off-site and off-hours.  Under NJCREAMMA, employers’ hands are further tied, as they cannot take an adverse action against an employee solely because an individual has used, or not used, a cannabis product off duty, regardless of whether such use is medically prescribed or recreational. And, although some portions of the bill become effective upon enactment, until regulations implementing the pending law are finalized, employers are left without guidance as to what the new drug testing provisions included in the pending law mean to their drug-free workplace policies.

The law is necessary to give effect to the November 2020 vote making the use of marijuana a state constitutional right.  To effectuate the change, the new law calls for the creation of a commission, which will comprise five members responsible for promulgating the regulations and overseeing the development, regulation and enforcement of activities associated with both medical and recreational marijuana use.  The commission is required to adopt initial rules and regulations within 180 days after the effective date of the law, or within 45 days of appointment of all members of the commission, whichever is later.  As of December 21, 2020, only some commission members have been appointed.  Some provisions of the statute become operative immediately upon enactment, but others, like the provisions governing employment, are not operative until the commission adopts initial rules and regulations, likely leading to confusion.  Until the commission promulgates regulations, the statutory provisions seem to raise more questions than they answer.

Employment Protections under NJCREAMMA

Under NJCREAMMA, employers cannot refuse to hire any person or discharge or take any adverse action against an employee (with respect to compensation or any other terms and conditions of employment) because they do, or do not, use cannabis products.  Moreover, the pending law explicitly protects employees from being subject to any adverse employment action solely because they have tested positive for cannabinoid metabolites, or admit to have engaged in the use of marijuana or marijuana products under the law.  At the same time, the statute affirms employers’ rights to maintain a drug- and alcohol-free workplace, to prohibit employees from using, consuming, being under the influence of, or possessing marijuana or marijuana products in the workplace or during work hours, but provides little to no guidance on how to do so while complying with the new law.  The statute does not recognize any exception that would allow an employer to bar off-duty marijuana use by employees in safety-sensitive positions, so employers are concerned to know how, if at all, marijuana use by workers in these sensitive roles can be considered when making employment decisions.  The statute does provide that if compliance with the law results in a “provable adverse impact on an employer subject to the requirements of a federal contract,” then the employer may enact policies in a manner that is consistent with federal law, rules and regulations.  As such, employers that are parties to federal contracts or that may lose federal funding for employing individuals who use marijuana (as it is still illegal under federal law), are exempt from certain requirements.

Drug Testing under NJCREAMMA

Under NJCREAMMA, employers may require employees to submit to drug tests under the following circumstances: (a) upon suspicion of cannabis use while the employee is engaged in the performance of their work responsibilities; (b) upon finding any observable signs of intoxication related to usage of a cannabis item; or (c) following a work-related accident (subject to investigation by the employer).  Employers may also utilize random drug testing, pre-employment screening, or routine testing of current employees to determine cannabis use during an employee’s working hours.  However, it is unclear how an employer may act upon test results, if it cannot act solely on the basis of a positive drug test.  In other states that have limited an employer’s right to act solely based on a workers’ medical use of marijuana, the fact of the marijuana use may be offset when coupled with some other factor, such as safety concerns, impairment during the work day, or involvement in an accident. It is hoped the regulations will provide further clarification. 

A revision to the term “drug test” in the new law further complicates matters. Although testing will be allowed in the aforementioned circumstances, NJCREAMMA redefines what it means to conduct a drug test. Specifically, the term “drug test” now means a process using (a) “scientifically reliable objective testing methods and procedures,” such as blood, urine or saliva tests; and (b) a physical evaluation by an individual certified as a Workplace Impairment Recognition Expert.  If both the Recognition Expert and drug test indicate that an employee is under the influence in the workplace or during work hours, an employer may take an adverse action.  It is unknown what test, if any, is deemed to be “scientifically reliable,” as drug tests, like alcohol tests, measure only the amount of drug – or drug metabolite– in the urine test specimen. The commission will be responsible for creating a curriculum to train individuals to become certified Workplace Impairment Recognition Experts.

Gaps and Uncertainties Not Resolved by NJCREAMMA

Unfortunately, many questions remain unanswered and additional questions are created by the language of NJCREAMMA.  Future regulations may clarify whether there are exemptions for safety-sensitive positions, what testing is deemed to be “scientifically reliable,” what purpose pre-employment screening can serve (e.g., can an employer refuse to hire an applicant deemed impaired by a workplace impairment expert at the time of interview?), and what the legislature considers “observable signs of intoxication,” that  would warrant discipline or termination of employment. 

Even in the absence of regulations or guidance, we advise employers to update their drug use and testing policies to account for the new constitutional protections granted adults over the age of 21 to use marijuana, effective January 1, 2021. We anticipate further developments and clarification throughout 2021 and will continue to provide updates.