The Current Status of the Law on Medical Marijuana Reimbursement in Workers’ Compensation

By Albert B. Randall, Jr. & Samantha L. Schilling, Franklin & Prokopik, P.C., Baltimore, MD

Although marijuana remains illegal under federal law as it is classified as a Schedule I drug in the Controlled Substances Act (“CSA”), as of January 2023, 37 states, as well as the District of Columbia, have enacted state legislation allowing for the medical use of cannabis (hereinafter referenced as “medical marijuana”) by qualified individuals.[fn. i] It is estimated that more than 2.97 million people nationwide are enrolled with state medical marijuana programs.[fn. ii] The most common conditions being treated with medical marijuana are chronic pain and post-traumatic stress disorder[fn. iii]; conditions which are also commonly diagnosed in reference to work-related injuries. In recent years there has been a growing number of litigated cases involving medical marijuana use in the context of workers’ compensation claims. A specific issue which has recently come up in workers’ compensation litigation is whether state workers’ compensation laws can compel an employer to reimburse an injured employee for the cost of medical marijuana. Currently, only four state Supreme Courts have addressed this issue and their decisions are split down the middle.

The state Supreme Courts which have addressed the issue as to whether employers can be judicially compelled to reimburse an employee for the cost of medical marijuana used to treat their work-related injury are the Maine Supreme Judicial Court, New Hampshire Supreme Court, New Jersey Supreme Court, and Minnesota Supreme Court. New Hampshire and New Jersey Supreme Courts have held that the CSA does not preempt the state medical marijuana laws, so that employers can be ordered to reimburse injured employees for the cost of medical marijuana. Maine and Minnesota Supreme Courts, however, held that the CSA does in fact preempt state medical marijuana laws, so that employers cannot be compelled to reimburse injured employees for the cost of their medical marijuana. Many other lower state courts have addressed this same issue, and the results are also a mix between for and against reimbursement. In light of this ambiguity, as well as the ever-growing prevalence in the realm of workers’ compensation law, the United States Supreme Court (“US Supreme Court”) was called upon to clarify this issue: “Whether the Controlled Substances Act preempts an order under a state workers’ compensation law requiring an employer to reimburse an injured employee for the cost of medical marijuana.”[fn. iv]

The Minnesota Supreme Court decision in Musta v. Mendota Heights Dental Center[fn. v] prompted the parties to seek intervention from the U.S. Supreme Court. This case involved a Claimant (“Musta”) who injured her neck while working as a dental hygienist for Mendota Heights Dental Center (“Mendota”).  After all other medical and surgical interventions failed to relieve Musta’s pain, she became certified, and enrolled in the Minnesota state program for medical marijuana. The Claimant purchased medical marijuana from a state dispensary to treat her work-related injury. As authorized by Minnesota law, the Claimant sought reimbursement for her purchase of medical marijuana from Mendota. Mendota refused to reimburse Musta for her purchase of medical marijuana on the basis that in doing so, it would be in conflict with the federal prohibition against aiding and abetting the possession of marijuana under the CSA. Nevertheless, a workers’ compensation judge ordered Mendota to reimburse Musta for the cost of medical marijuana purchased to treat her chronic pain as a result of her work-related injury. Mendota appealed the judge’s order, and the case ended up before the Minnesota Supreme Court.

Mendota’s argument before the Minnesota Supreme Court centered around the overarching issue of preemption: the judge’s order requiring reimbursement for Musta’s purchase of marijuana would make it impossible to comply with both the federal and state law. In response to Mendota’s position on the issue, Musta argued that the appropriation riders enacted by Congress, which prohibit the United States Department of Justice from spending funds to prosecute persons who use medical marijuana consistent with their state laws, demonstrated the federal government’s “purpose” as to not interfere with the operation of state medical marijuana programs and Minnesota workers’ compensation laws. Further, Musta argued that Mendota’s action of merely reimbursing for past purchase of medical marijuana would not satisfy the intent required for aiding and abetting under federal law. Therefore, Musta argued that Mendota would not and could not be federally prosecuted for complying with the order requiring reimbursement as authorized under Minnesota state law.

After clarifying the specific intent required for federal aiding and abetting, and an analysis of the impossibility theory of conflict preemption, the majority of the Minnesota Supreme Court ultimately concluded that a court order requiring Mendota to reimburse for the purchase of medical marijuana would in fact subject them to criminal liability for aiding and abetting the possession of marijuana under the CSA. Since it would be impossible for Mendota to comply with both federal and state law, the Minnesota compensation court’s order was preempted by the CSA, and the compensation order mandating reimbursement was overturned.

Aggrieved by the Minnesota Supreme Court’s decision, Musta filed a petition for writ of certiorari to the US Supreme Court. In their petition, Musta re-presented their argument that complying with the workers’ compensation order, would not amount to a federal crime, therefore there was no preemption issue. In response, the United States Solicitor General filed a brief to the US Supreme Court, addressing their opinion that this specific issue presented did not warrant the US Supreme Court’s review at this time. The crux of the United States’ argument against the US Supreme Court’s review was that Minnesota’s Supreme Court decision got it right—“when a federal law such as the CSA prohibits possession of a particular item, it preempts a state law requiring a private party to subsidize the purchase of that item.”[fn. vi] Further, their position against review highlighted the fact that this specific issue was so limited and recent, that the highest state courts have not yet developed and addressed all relevant preemption questions involved. Therefore, additional litigation within the lower courts still had an opportunity to address all arguments and potentially resolve the issue. Lastly, the United States argued that the Executive and Legislative Branches of the federal government were more properly situated to resolve these conflicts involving federal and state marijuana laws. As of June 2022, the US Supreme Court declined to review the Musta case, whereby leaving us with ongoing uncertainty.

Not only can we expect more cases involving the use of medical marijuana as a whole, in light of the fact that there are more and more byproducts being developed with compounds found in marijuana, the use and reimbursement of these byproducts are also being tested in workers’ compensation courts.

A more recent case, Bourgoin v. Twin Rivers Paper Company[fn. vii] considered the issue of reimbursement for medical cannabidiol, better known as CBD, which is a compound found in marijuana. CBD which contains less than .3% of Tetrahydrocannabinol (THC) is not prohibited under the CSA. In the case of Bourgoin, the injured worker sought reimbursement from his employer for CBD gummies purchased from a medical marijuana retailer in Maine. Due to the fact that the retailer did not grow the products it sold, they were unable to verify that the CBD gummies had less than .3% THC. Since Bourgoin could not meet his burden of proof that the CBD gummies contained less than .3% THC, thereby exempting it from the CSA, and the fact that the gummies had not been approved for use by the US Food and Drug Administration, an administrative law judge determined that the employer in this case could not be ordered to reimburse the costs of purchasing the CBD gummies. The judge’s opinion was supported by the Maine Supreme Court’s decision that THC remained illegal under the CSA and federal law reigned supreme and preempted Maine’s law legalizing and regulating medical marijuana.[fn. viii]

With the developing research behind the medical benefits of marijuana and laxity of laws being passed for its use, both medically and recreationally, it would be naïve to think issues involving this specific drug in the sphere of workers’ compensation law would simmer out. In light of this trend, we can continue to expect ongoing litigation to determine how each state will address this issue, unless the CSA is amended or other action is taken to resolve the federal and state law differences.

Footnotes:

i. National Conf. of State Legislatures, State Medical Cannabis Laws (September 12, 2023), https://www.ncsl.org/health/state-medical-cannabis-laws

ii. Linda Searing, U.S. medical cannabis enrollments quadrupled from 2016 to 2020 (June 21, 2022), https://www.washingtonpost.com/health/2022/06/21/medical-cannabis-popularity-grows/.

iii. Id.

iv. Petitioners Reply Brief in Support of Petition for a Writ of Certiorari, Musta v. Mendota Heights Dental Center, No. 21-676 (U.S. February 1, 2022).

v. 965 N.W.2d 312 (2021)

vi. Brief for the United States as Amicus Curiae, Musta v. Mendota Heights Dental Center, No. 21-676, 21-998 (U.S. May 16, 2022).

vii. Bourgoin v. Twin Rivers Paper Company, Case No. App. Div. 21-0022, Decision No. 23-2, State of Maine Workers’ Compensation Board (January 6, 2023).

viii. Id., at paragraph 3.

© Copyright 2023 Albert B. Randall, Jr. and Samantha L. Schilling, Franklin & Prokopik, P.C. All rights reserved. Reprinted with permission.