The Marijuana Industry And Special Districts

Transcription

1 The Marijuana Industry And Special Districts Dino Ross, Esq. Tom Downey Esq Copyright 2015 Ireland Stapleton Pryor and Pascoe, PC

2 Program Overview Basic terminology Regulatory overview Federal illegality History Industry/regulatory status Employment issues Fire protection districts/ambulance districts reporting to law enforcement Jurisdictional issues Potential legislation/regulations Q&A

3 Speaker Dino Ross Special Districts Employment Law Attorney Ireland Stapleton Pryor & Pascoe, PC

4 Background I have 24 years experience in: representing special districts as general counsel or special counsel public and private sector employment law I have represented numerous special districts in bringing or defending against federal or state lawsuits I have been involved in making or changing Colorado legislation affecting special districts for the last 10 years

5 Speaker Tom Downey Regulatory Attorney Ireland Stapleton Pryor & Pascoe, PC Hi, my name is Tom and I ve NEVER smoked pot.

6 Just So You Know I m a regulatory, administrative law attorney Practicing for more than 20 years Denver Dept. Excise and License Wrote the original policies and procedures for Denver s legalized recreational marijuana licenses Business and Licensing Division of the Colorado Secretary of State s Office Assistant Attorney General in the Business and Licensing Section under A.G. Ken Salazar Committing/aiding and abetting execution of a federal crime

7 It s Spreading

8 Basic Terminology Retail/recreational Dispensary/center/store OPC/cultivation - grow facility MIP Marijuana infused product Excise tax Decriminalization/legalization

9 Marijuana History of Legalization in Colorado 1970: The federal Controlled Substances Act lists Marijuana as a Schedule I controlled substance. 2009: The DOJ announces that prosecuting medical marijuana users would no longer be a federal enforcement priority. Colorado marijuana businesses open. 2013: The DOJ announces that it will not challenge state laws that legalize marijuana. 2000: Colorado voters pass Amendment 20, decriminalizing marijuana use by those with debilitating medical conditions. 2012: Colorado voters pass Amendment 64, decriminalizing the possession and use of marijuana by adults 21 years and older.

10 Legalized Marijuana Categories Industrial hemp agriculture Personal/caregiver health Commercial revenue/med

11 Federal/State Law Conflict ARTICLE VI of US CONSTITUTION: (2) Supremacy of Constitution, Treaties & Laws. This Constitution, and the laws of the United States which shall be made in pursuance thereof, shall be the supreme law of the land; and the judges in every state shall be bound thereby; anything in the constitution or laws of any state to the contrary notwithstanding.

12 Federal/State Law Conflict

13 Federal Enforcement Schedule 1 Narcotic Federal Seizure Aiding and abetting Legal line never ends enforcement line is wherever enforcer draws it State trooper enforcement analogy

14 First Wave Little or no business experience Recession in full bloom Lack of regulatory oversight

15 Second Wave Non-marijuana business people Brought legitimate business practices with them Successfully weathered market and regulatory changes Market made of the few business savvy first wavers and second wave entrepreneurs

16 Third Wave Present Big dollars Massive operations

17 Industry Status Half the states have legalized marijuana, including Georgia Informal political coalition Pre-2000: 95% of MJ smoked 2015: 40% of MJ smoked Oligopoly Sophisticated operators

18 Industry Status 119K medical cards in Colo. 2.5% of Colo. 650,000 Colo. users 12% of Colo. In 2014, Colorado marijuana businesses sold 148,000 pounds of marijuana In 2014, the Colorado State government collected $53 million in taxes and fees Colorado s gross sales are projected to be well over $1 billion Market size In 2019: $10.2 billion MJ consumption mirrors alcohol

19 Regulatory Status Colorado medical and recreational Colorado - dual licensing structure Colorado 2 year residency rule? New Colorado legislation (law) Most states medical Restricted ailments Restricted delivery mechanisms 2017 could all go away

20 Relevant Employment Laws Lawful Off-Duty Conduct Employers cannot fire employees for doing legal things on their own time and away from the workplace, even if the employer objects to the activity Unemployment Compensation Benefits can be denied if the employee was fired because he/she had not medically prescribed controlled substances in his/her system at work Workers Compensation Benefits can be reduced by 50% if the injury resulted from the presence of not medically prescribed controlled substances in the employee s system ADA/CADA Using medical marijuana to treat disability not protected, so long as adverse action based on uniformly applied drug policy

21 Lawful Off-Duty Conduct Coats v. Dish Network 2015 Colorado Supreme Court The Facts The Decision Brandon Coats, a quadriplegic and medical marijuana user, was fired from Dish Network after testing positive for marijuana. He said his medical marijuana use was a lawful off-duty activity and that Dish Network was not permitted to fire him. Lawful means lawful under both the state and federal law. Because marijuana is illegal under federal law, it is not a lawful activity and is not protected under the statute. Employees can be fired for smoking marijuana off-duty.

22 Lawful Off-Duty Conduct Coats v. Dish Network 2013 Colorado Court of Appeals While we agree that the general purpose of [the off-duty conduct statute] is to keep an employer s proverbial nose out of an employee s off-site off-hours business, we can find no legislative intent to extend employment protection to those engaged in activities that violate federal law. And one more thing Amendment 64 and its implementing statutes say that the Amendment does not affect the ability of employers to have policies restricting use of marijuana by employees.

23 Secondary Exposure at Incident What to do with emergency personnel who are exposed to marijuana by contact or smoke? No court decision or agency guidance Thoughts: Put a policy in place before the situation arises SOP/SOG/Handbook grace period after exposure? Self reporting? Establish threshold level for a marijuana test Violation if above established threshold Second, more intensive test if positive, but below threshold

24 Unemployment Compensation Beinor v. Industrial Claim Appeals Office 2011 Colorado Court of Appeals The Facts The Decision Jason Beinor used medical marijuana to treat headaches. He was fired after testing positive, and then denied unemployment benefits. He said the marijuana was medically prescribed because he used it pursuant to a doctor s recommendation. Federal law prohibits physicians from prescribing marijuana, a Schedule I controlled substance. Physicians only give written documentation that patient might benefit from medical marijuana. Medical marijuana referrals and registry cards are not prescriptions.

25 Workers Compensation No court has decided whether marijuana is a "not medically prescribed" controlled substance for purposes of reducing benefits. But it s likely that the issue would be decided consistently with Coats, Beinor, and the new state marijuana laws, and the 50 % penalty would be imposed. RED FLAG WARNING: the drug test must be performed by a state-licensed or certified lab, AND a duplicate sample must be preserved by the lab for the employee to test at his/her expense.

26 Colorado Anti-Discrimination Act Curry v. MillerCoors, Inc US Dist. Court for Colorado The Facts The Decision Mr. Curry used medical marijuana to treat hepatitis, osteoarthrisis and pain. Failed drug test and fired. Sued for Invasion of Privacy and under CADA because fired for treating qualified disability. Positive marijuana test, whether for medical marijuana or any other use, legitimate basis to fire. CADA does not shield disabled employee from implementation of standard policies against misconduct.

27 Individual Liability State Tort Claim Gallagher v. Bd. of Trustees Univ Northern Colo 2002 Colorado Supreme Court The Facts The Decision Gallagher sued University Administrator personally for defamation. In a staff meeting the Administrator stated to the group that Gallagher comes to work smelling of marijuana. Colorado Governmental Immunity Act bars claim not asserted within 180 days of when injury was discovered or reasonable should have been discovered Continuing Violation doctrine does not apply. No immunity if acting outside scope of employment

28 Conclusion Adverse Employment Action The Takeaway: You can discipline or terminate employees who smoke medical or recreational marijuana if: (1) they are impaired or hung over at work; or (2) it is in their system while they are at work (i.e., they fail a drug test). But first Establish a written drug and alcohol policy. Establish a written drug and alcohol testing policy. Inform your employees of the policies. Apply the policies consistently. Document, document, document! Have a certified lab conduct the drug testing.

29 Fire Protection Districts and Ambulance Districts Reporting to Law Enforcement People v. Harper 1995 Colorado Supreme Court The Facts The Decision Firefighters entered residence to extinguish fire. During cause and origin investigation that commenced immediately upon extinguishment of fire, investigator saw marijuana and reported it to law enforcement. Residential fire triggered exigent circumstance exception to constitutional bar of warrantless search. No warrant needed for cause/origin investigation immediately following extinguishment of fire. Plain View doctrine applies.

30 Fire Protection Districts and Ambulance Districts Reporting to Law Enforcement Annual Fire Code Inspection of Commercial Property Where Access Permitted No Administrative Warrant Needed. Annual Fire Code Inspection of Commercial Property Where Access Denied No Administrative Warrant Needed if: Meets Limited Scope of Open Field Doctrine; or Heavily Regulated Industry. Commercial marijuana probably heavily regulated industry in Colorado. Always Can Conduct Inspection Within Scope of Administrative Warrant

31 Fire Protection Districts and Ambulance Districts Individual Liability Constitutional Claim Winchester v. Cosaineau (Warrantless Search) 2005 US District Court for Colorado The Facts The Decision EMS personnel forcibly entered residence upon anonymous tip of possible overdose/suicide. Police entered to protect EMS personnel. Illegal substance found. Plaintiff asserted 1983 claim against individual EMS providers for warrantless search. CGIA does not apply to 1983 claim Qualified Immunity applies Medical emergency created exigent circumstance exception to constitutional bar of warrantless search.

32 Fire Protection Districts and Ambulance Districts Individual Liability Constitutional Claim Young v. Larimer Sheriff s Office (Dead Pot Plants) 2014 Colorado Court of Appeals The Facts Police took 42 plants cut off at base of stem. Defendant acquitted of all charges under Medical Marijuana laws police returned dead plants Plaintiff sued individual police officers under 1983 The Decision No legally protected interest on contraband Medical marijuana illegal under Fed law, so it is contraband per se Plaintiff had no legally protected interest in the marijuana; however, may have chilling effect on fire departments.

33 Jurisdictional Issues Jurisdictional pecking order Opt in/out Partial opt out Child protective services

34 Potential Legislation/Regulations Coats v. Dish Network Carve out On-site consumption Portion/potency Landlord liability/liquor analogy Pesticide restrictions Personal/caregiver cultivation restrictions Industrial hemp gap

35 Questions?