What Employers Should Know About Cannabis and the Workplace

October 14, 2024

A Regulatory Minefield

Marijuana, cannabis, weed, or whatever you want to call it is a growth industry. We know it’s still an illegal Schedule 1 drug under federal law; so how is it that we can grow, sell, or buy it in Massachusetts? And what effect does the regulatory minefield have on employers and the workplace?


Today’s article will explore the legal ins and outs of cannabis relative to Massachusetts workplaces. In addition, it will provide a brief overview of the current federal and state regulatory scheme.

 

Federal Stance and Future Legislation


Cannabis is still considered a Schedule 1 illicit substance under federal law. Most simply stated, this means that if one is found in possession of marijuana by a federal officer or border official, you’re in trouble. However, a growing number of states, like Massachusetts, have chosen to move forward and allow the sales and distribution of cannabis, either for medical or recreational use, within state borders. In fact, 24 states have legalized marijuana.


There have been several proposed bills in Congress to help move cannabis from its Schedule 1 classification (covering the most addictive and destructive substances, such as heroin) to Schedule 3 (defined as drugs with a moderate to low potential for physical or psychological dependence, such as anabolic steroids). See, for example, the Marijuana 1 to 3 Act of 2023.


Other than the obvious relaxation of legal impediments to cannabis use, the proposed federal bills have some amazing tax benefits for the cannabis industry as a whole. For starters, IRS enforcement action would be one less problem to worry about. Currently, cannabis businesses do not enjoy the same tax deductions as the average mom-and-pop or Fortune 500 company. This is due to Internal Revenue Code Section 280E, which does not allow certain standard business deductions due to the legal risks associated with the illegal ‘trafficking’ of a Schedule 1 drug. Cannabis businesses also face higher income-tax rates as a result of their business. Most of the proposed federal laws would remove those tax obstacles and categorize cannabis as just another product sold by just another business.


Additionally, placing cannabis into a Schedule 3 classification would allow for this industry to become regulated like any other Schedule 3 drug provider. While striving for more federal regulations may sound counterintuitive for a business, the current patchwork quilt of state regulations has not served consumers well.


As noted recently in the Boston Globe, the quality of lab test results relative to marijuana mold contamination and THC levels has raised consumer concerns in Massachusetts and may have negative repercussions relative to state cannabis businesses. More specifically, state cannabis businesses have been accused of circumventing health regulations by ‘shopping’ for laboratories with loose (or non-existent) standards in order to obtain favorable testing scores.


A straightforward, no-nonsense standard for regulation and testing, like the one the U.S. Food and Drug Administration has for Schedule 3 drugs, would give consumers confidence that the products they are purchasing are both safe for consumption and contain the product described on the label.


There are other pending bills that would favorably affect the cannabis industry. One of the eagerly watched bills is the SAFE Banking Act, which was meant to make banking services accessible to state-regulated cannabis businesses without the fear of federal penalties. Specifically, its provisions would allow for the profit from a state-regulated cannabis business to be considered just that, and not proceeds from an unlawful activity.


The banking industry is traditionally quite conservative when it comes to risk taking in the area of emerging or ‘unlawful’ industries. Without such banking legislation, it remains very difficult, if not impossible, for state-regulated cannabis businesses to get routine business loans and/or building or mortgage commitments. Insurance companies, also conservative entities, have begun to craft specific policies for the cannabis industry; however, much of such coverage is prohibitively expensive.


The States Reform Act is a pending bipartisan effort to change cannabis regulation by creating a permitting process on the federal level for cannabis-based businesses. This would allow federal oversight on products that cross state lines, thus allowing lawful interstate commerce.


Under current law, the states and federal government disagree on the legality of cannabis use, thus making its transportation across state lines a legally precarious task. Such product movement currently requires ‘creative’ transportation routes. Typically, it’s the smaller companies who suffer and lose out on increasing their business if they lack the resources to come up with those creative solutions.


Cannabis and the Massachusetts Workplace


A big question that arises regarding cannabis in the workplace is “how is drug testing affected by employee use of medical and/or recreational cannabis?” It is important to note that, if you require your applicants or employees to be drug-tested, you should have a company-wide policy that details specific scenarios that would require drug testing. After that, enforcement becomes a management issue.


A rule of thumb to follow is that employers should generally require their employees to refrain from using alcohol and/or other drugs while on the clock. Reporting for work while intoxicated, or under the influence of mind-altering drugs, should also be addressed.


The follow-up question that is often asked is “what if an employee uses marijuana for a medical purpose?” Medicinal use of marijuana is a very real and effective remedy for several conditions and must be treated seriously in the workplace to avoid any violations of the Americans with Disabilities Act.


It is not a business owner’s responsibility to probe every employee to see who has a disability and how they cope with it; they also are not required (as of yet) to accommodate the use of medical marijuana in the workplace. Employers are, however, required to have an interactive conversation with an employee to determine whether a reasonable accommodation is possible for an employee who uses medical marijuana to treat a disability.


Given the legal complexities, such situations need to be addressed on a case-by-case basis, and consulting with a business or employment lawyer well-versed in cannabis regulation is advisable.


The framework this act would establish would create federal regulations on interstate cannabis-based activities. The act would also impose a 3% federal cannabis excise-tax structure with a 10-year moratorium on increases to said tax. With the perennial federal budget shortages, this excise tax would be a welcome addition to the federal tax coffers.


Jason Ortiz and Elaine Reall are attorneys who specialize in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.


Jason Ortiz and Elaine Reall co-authored this article which was featured in Businesswest. Click here to visit their website. Reall was a featured panelist on a panel providing insights into the legal and regulatory status of the cannabis industry at the 2024 annual meeting of the National Assoc. of Minority and Women Owned Law Firms, which took place Sept. 15-18.


By The Royal Law Firm August 19, 2025
Employers regularly wonder: “Can I fire someone for that?” You might assume the answer is simple, especially in an at-will state like Massachusetts. But the reality is more complex. Missteps can land your business in court. Here’s how to avoid them and keep your company focused on growth, not litigation. Myth: “At-Will Means Any Reason Goes” At-will employment allows termination without contractual cause. Yet anti-discrimination laws and retaliation protections still apply. Even a valid reason, like poor performance, becomes risky if the employee recently complained about harassment, requested an accommodation, or reported a safety issue. Terminating soon after a complaint invites legal trouble. For example, consider firing Sarah for repeated tardiness. But what if she reported sexual harassment a few weeks earlier? Timing alone can create exposure. Document performance issues as they arise. Also, check if the employee recently returned from Family and Medical Leave (FMLA) or Paid Family and Medical Leave (PFML). A Springfield auto repair shop faced a claim after firing a worker the day after he returned from PFML to care for his newborn. The company blamed tardiness, but the timing triggered months of legal headaches. Myth: “No Documentation Needed” Some employers assume that no paperwork is necessary under at-will rules. That approach creates unnecessary risk. Without records, even lawful firings appear questionable. Weak evidence damages credibility. Imagine Tom, a low performer who never received formal feedback. If you fire him after years of positive reviews, expect scrutiny. Always provide timely written warnings and accurate performance evaluations. Keep emails, attendance records, and coaching notes. Would your records persuade a jury that the termination was justified? Myth: “We Treated Everyone Fairly” Fair treatment requires consistency. If one employee is fired and another is only warned for the same violation, questions follow. Consider two salespeople, Mike and Jose, both caught inflating sales numbers. Mike receives a warning. Jose gets fired. If Jose claims racial bias, inconsistent discipline strengthens his argument. Review prior disciplinary decisions. Can you show a clear record of equal treatment? Myth: “We Can Share the Reason Widely” Managers sometimes explain a termination too broadly, believing transparency protects the company. In reality, public disclosure creates legal risk. An employee fired for theft sued his employer after leadership announced it to the entire staff. Even truthful statements, shared excessively or with ill will, can spark defamation claims. A local example: a Chicopee retailer emailed all employees naming a worker fired for alleged cash shortages. That email became Exhibit A in court. Limit disclosure to those who truly need to know. Avoiding Retaliation Claims Retaliation is the most common EEOC claim. Firing someone after they complain about discrimination, request leave, or raise pay concerns often leads to lawsuits. Subtle actions can count too—cutting hours, assigning undesirable shifts, or excluding them from meetings. Did Lisa report a wage issue last week? If she now gets the worst shifts, her attorney will call it punishment. Train managers to pause and ask: “Does this look like payback?” In one Springfield restaurant, a server who complained about tips was fired days later for “attitude.” The MCAD viewed the timing as retaliation, and the case settled quickly. Managing the Termination Meeting Professionally How you fire someone matters. Keep the meeting short and calm. Speak plainly. Avoid debate. Bring a neutral witness, usually HR. Disable system access and collect company property immediately. For remote workers, coordinate IT to end access during the call. Have you prepared your team to stay composed when an employee gets angry or upset? A concise, professional exit reduces emotion and litigation risk. Reducing Risks Before They Occur You can prevent most legal problems with proactive steps. Train managers to document consistently. Encourage employees to raise concerns early, and respond appropriately when they do. Also, follow Massachusetts requirements: final wages and accrued vacation must be paid promptly, sometimes the same day. Missing or delaying a payment can trigger penalties. Review whether your managers apply standards uniformly. Track disciplinary trends by department or supervisor. In one Holyoke warehouse, inconsistent discipline across shifts led to multiple claims that could have been avoided with routine audits. Quick Pre-Termination Checklist Document the issue in writing. Confirm whether the employee recently exercised protected rights (complaint, FMLA, PFML, workers’ comp). Ensure similar cases were handled consistently. Complete a fair investigation and allow the employee to respond. Prepare final pay and unused vacation in compliance with Massachusetts law. Bottom Line Employee terminations happen. Legal trouble does not have to. Careful documentation, consistent actions, and thoughtful communication protect your business. Before acting, stop and ask: have we done this right? Taking these steps helps you confidently answer, “Can I fire someone for that?” That answer should never rest on guesswork. Michael P. Lewis, is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP , a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council. If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288. Michael P. Lewis wrote this article which was featured in BusinessWest. Click here to visit their website.
By The Royal Law Firm August 18, 2025
Royal attorneys successfully obtained a dismissal at the Connecticut Commission on Human Rights and Opportunities. The Complainant alleged discrimination based on race, color and mental disability. Royal attorneys argued that the Complainant failed to establish a prima facie case of discrimination and complainant could not prove that they experienced an adverse employment action. The CHRO agreed with our argument and dismissed the case against our client due to a lack of reasonable cause.