Arizona’s Changing Marijuana Landscape: An Election Wrap-Up

On November 3, 2020, Arizona voters decisively approved Proposition 207, the Smart and Safe Arizona Act, to legalize recreational marijuana. As a result of the election, both medical and recreational marijuana are officially legal in Arizona.

Recreational Marijuana

Arizona narrowly voted against legalizing recreational marijuana in 2016, but the Smart and Safe Arizona Act passed in 2020 with approximately 60 percent of the vote. Despite opposition to the measure from Governor Doug Ducey and some citizens groups, as well as legal challenges before the Arizona Supreme Court, the retail sale and adult use of recreational marijuana are officially legal in the state. The new law will impose a 16 percent tax on recreational marijuana sales to fund public programs across the state. Sales can begin in early 2021, once the Arizona Department of Health Services issues marijuana business licenses.

Proposition 207 appears to preserve employers’ ability to maintain and enforce zero-tolerance drug-free workplace policies. Specifically, Proposition 207 includes the following provisions:

• Section 36-2851(1) states that the proposition “[d]oes not restrict the rights of employers to maintain a drug-and-alcohol free workplace or affect the ability of employers to have workplace policies restricting the use of marijuana by employees or prospective employees.”
• According to Section 36-2851(2), Proposition 207 “[d]oes not require an employer to allow or accommodate the use, consumption, possession, transfer, display, transportation, sale or cultivation of marijuana in a place of employment.”
• Section 36-2851(6) states that Proposition 207 does not prohibit employers from prohibiting or regulating “conduct otherwise allowed by this chapter when such conduct occurs on or in their properties.”

Although Proposition 207 does not provide any explicit job protections for employees, employers may want to take this opportunity to review their drug policies. Employers that continue to enforce zero-tolerance policies for marijuana may want to consider how such policies will affect their ability to attract and retain talent. If employers are not going to allow off-duty use of legal recreational marijuana, they may want to ensure their policies accurately reflect this and that employees know about the policies. Otherwise, employers risk losing good employees due to misunderstanding of company policies regarding marijuana use.

Medical Marijuana

The smoke is currently surrounding recreational marijuana, but employers may also want to be aware of the increased legal challenges related to medical marijuana. Recently, a medical marijuana cardholder challenged the “safety-sensitive position” exception to the Arizona Drug Testing of Employees Act (DTEA) in federal court. The parties eventually settled the case, but in an unpublished, tentative ruling the court highlighted the unclear future of the “safety-sensitive position” exception in Arizona.

Currently, an employer that complies with the requirements of the DTEA has latitude to exclude an employee from a “safety-sensitive” position based on the employer’s good-faith belief that the employee is engaged in the current use of any legal drug (including medical marijuana), which may cause impairment or otherwise lessen the employee’s ability to perform his or her job duties. (See A.R.S. Section 23-493.06(A)(7).) In the pre-settlement proposed ruling, the court found that the “safety-sensitive position” exception was an unconstitutional amendment to the Arizona Medical Marijuana Act (AMMA), which created an additional circumstance for employers potentially to discriminate against medical marijuana users based solely on their cardholder status. Although the tentative ruling never became final, we anticipate additional challenges to the “safety-sensitive position” exception on similar grounds. Employers may want to tread carefully when handling medical marijuana issues and analyze each decision on an individualized basis.

Given the passage of Proposition 207, employers may want to thoroughly examine their substance abuse polices and update them to address both recreational and medical marijuana in the workplace.

Ogletree Deakins’ Drug Testing Practice Group will continue to monitor legal developments with respect to recreational and medical marijuana in the workplace in Arizona and will provide updates on the Drug Testing blog.

For more information on Arizona-specific marijuana issues and key insights for employers navigating Arizona’s changing legal landscape, please join us on Monday, November 23, 2020, at 11 a.m. for a webinar, “Arizona’s Legalization of Recreational Marijuana: What Employers Need to Know.” Register here.