Virginia’s Recreational Marijuana Legislation and New Employee Medicinal Use Protections

On April 21, 2021, Virginia Governor Ralph Northam signed into law House Bill No. 2312 and Senate Bill No. 1406, moving the date of recreational marijuana legalization in Virginia up to July 1, 2021. The legalization movement, which has increased in momentum in the Commonwealth since Democrats gained a majority in the legislature, culminated in February 2021, when the General Assembly passed recreational legalization measures with an effective date of January 2024. The substance of these measures, which remains largely unchanged in the final legislative text, permits the recreational use of marijuana by adults who are at least 21 years old, allows for wholesale and retail sale of marijuana, and allows home cultivation and personal use of marijuana (up to four plants for personal use). Recent amendments that both chambers of the Virginia General Assembly approved on April 7, 2021, modify the statutory provisions legalizing personal possession, gifting, and personal cultivation of marijuana by adults—moving the effective date up significantly from January 2024, to July 1, 2021.  The remaining portions of the legislation, which address various aspects of the wholesale and retail sale of marijuana, remain set for a delayed effective date of January 1, 2024. The legislation is a watershed moment for marijuana legalization advocates, but it does not expressly prohibit employers from restricting or monitoring the recreational use of marijuana by their employees.

Related Protections for Employees’ Medicinal Use of Cannabis Oil

Virginia employers may want to be mindful of a related measure, House Bill No. 1862, passed in March 2021, and effective July 1, 2021, which prohibits an employer from discharging, disciplining, or discriminating against an employee based on the employee’s lawful use of cannabis oil pursuant to a valid written certification for the use of such oil for the treatment of a diagnosed condition or disease.

Under the new law, “[c]annabis oil” is defined as “any formulation of processed Cannabis plant extract, which may include industrial hemp extract acquired by a pharmaceutical processor … or a dilution of the resin of the Cannabis plant that contains at least five milligrams of cannabidiol (CBD) or tetrahydrocannabinolic acid (THC-A) and no more than 10 milligrams of delta-9-tetrahydrocannabinol [THC] per dose.” Importantly, cannabis oil should not be confused with popular CBD products that are widely available at retail stores without a prescription and purportedly contain extremely low amounts of THC—the chemical associated with marijuana’s psychoactive effects. Because the new law encompasses cannabis oil products that include THC, employers may no longer rely on a positive test for marijuana as the basis for discipline without first evaluating whether the positive result is associated with the protected medicinal use of cannabis oil.

Virginia employers may also want to be mindful of the enumerated exceptions to the protections for medicinal use of cannabis oil by employees. The new cannabis oil law does not:

• “restrict an employer’s ability to take any adverse employment action for any work impairment caused by the use of cannabis oil or to prohibit possession during work hours”;
• “require an employer to commit any act that would cause the employer to be in violation of federal law or that would result in the loss of a federal contract or federal funding”; and
• “require any defense industrial base sector employer or prospective employer, as defined by the U.S. Cybersecurity and Infrastructure Security Agency, to hire or retain any applicant or employee who tests positive for tetrahydrocannabinol (THC) in excess of 50 ng/ml for a urine test or 10 pg/mg for a hair test.”

These carve-outs do not expressly address safety-sensitive positions, which are often granted an exception from legislation protecting medical marijuana cardholder status due to the hazardous nature of the work involved and/or dangerous work conditions. Although the new cannabis oil law does not expressly refer to “safety-sensitive” positions, employers required to comply with federal regulations involving safety-sensitive positions (e.g., Department of Transportation-regulated drivers) may be able to rely upon the “violation of federal law” exception. However, the strength and scope of this exception remains unclear, and employers may want to navigate these issues carefully as the new cannabis oil protections are enforced. As the July 1, 2021, effective date draws near, Virginia employers may want to evaluate applicable federal regulations to address potential conflicts that could arise from employees engaging in off-duty recreational marijuana use or in the medicinal use of cannabis oil.

Expanded Prohibition on Applicant Questions Related to Marijuana Crimes

Virginia’s marijuana legalization legislation modifies the existing ban on requiring a Virginia job applicant to disclose information related to an arrest, criminal charge, or conviction for simple possession of marijuana (i.e., possession of less than one ounce of marijuana), which was decriminalized on May 21, 2020. The recent modification expands the prohibition to include requests for information from an applicant related to any arrest, criminal charge, or conviction for the sale, transfer, distribution, or possession with the intent to sell, give, or distribute less than one ounce of marijuana. Virginia employers may want to review their recruitment and hiring procedures to ensure compliance with the expanded prohibition.

Sweeping Changes for Recreational Marijuana Use in Virginia

The remaining portions of Virginia’s recreational marijuana legislation do not directly impact employers, but the following broad changes will certainly affect Virginia enterprises operating (or preparing to operate) in the marijuana industry:

• legalization of the possession of marijuana (up to one ounce) by adults who are 21 years of age and older;
• establishment of the Virginia Cannabis Control Authority and a regulatory structure for the cultivation, manufacture, wholesale distribution, and retail sale of marijuana and marijuana products;
• a grant of authority to Virginia localities to establish licensing requirements for retail and wholesale marijuana establishments within such localities;
• a grant of additional authority to Virginia localities to establish licensing requirements for the home cultivation of marijuana for personal use; and
• creation of tax revenue (estimated in the hundreds of millions of dollars) at the state and local levels.

The legislation also takes aim at entrenched systemic inequities affecting historically marginalized communities (particularly the African-American community) that have been “disproportionately policed for marijuana crimes” through drug-related police encounters, arrests, and convictions. These social provisions include the following:

• Preferential access to retail and manufacturing licenses for
  • individuals (or their immediate family members) who have been convicted of marijuana-related crimes;
  • graduates of Virginia’s historically black colleges and universities; and
  • individuals living in “economically distressed” neighborhoods or neighborhoods that have experienced disproportionately high rates of marijuana-related arrests.
• Elimination of civil and criminal penalties for possession of marijuana (up to one once) by adults who are 21 years of age or older
• Requirement that the Virginia state police determine, by July 1, 2025, which marijuana-related misdemeanor offenses will be automatically expunged from the state’s record system
• Permission for petitions for expungement of certain records of marijuana-related felony convictions (and juvenile delinquency adjudications)
• Limitations on the dissemination of criminal record information relating to certain marijuana-related offenses
• Investment in “educational and vocational resources for historically marginalized persons”
• Creation and investment in social programs focused on curbing substance abuse and promoting health and wellness initiatives

Worker Protections Added to Final Legalization Bill

The final legislative text also includes provisions that authorize the newly established Virginia Cannabis Control Authority to suspend or revoke a licensee’s marijuana-related business license if the licensee

• interferes with “union organizing efforts by employees”;
• fails to pay employees “prevailing wages as determined by the U.S. Department of Labor”; or
• classifies “more than 10 percent of its workers as independent contractors” when such workers are not “owners in a worker-owned cooperative.”

The inclusion of labor and employment–related provisions in marijuana legalization legislation appears to reflect Governor Northam’s interest in using the marijuana legalization measures to bolster protections for employees and organized labor. Virginia employers operating (or planning to operate) in the marijuana industry may want to review their current labor, wage, and classification procedures to ensure compliance with these new guidelines.

Key Takeaways

Virginia’s legalization measures place the state among the 16 states and the District of Columbia have legalized marijuana for adult recreational use. Vermont, Illinois, and New York have similarly used legislative action to regulate and tax the recreational use and retail sale of marijuana. As the wave of legalization continues to swell, employers throughout the United States may want to monitor closely state legislative activity for marijuana policy changes.

Ogletree Deakins’ Drug Testing Practice Group will continue to monitor developments related to marijuana laws in the workplace and will provide updates on the Drug Testing blog. Important information for employers is also available via the firm’s webinar and podcast programs.

Further information on federal, state, and major locality marijuana laws and related issues affecting the workplace is available in the firm’s OD Comply: Marijuana subscription materials, which are updated and provided to OD Comply subscribers as the law changes.