An employer ordered to reimburse a worker for his purchase of medical marijuana – as part of a workers’ compensation claim – is not in danger of violating the federal Controlled Substances Act, according to an important decision rendered by the New Jersey Appellate Division this week.

In Vincent Hager v. M&K Construction, Case No. A-0102-18T3 (N.J. App. Div.), the court grappled with a potential conflict between the Controlled Substances Act (“CSA”), 21 U.S.C. § 841, which makes it a crime to manufacture, possess or distribute marijuana, and the New Jersey Compassionate Use Medical Marijuana Act (“MMA”), which decriminalizes the possession of certain amounts of marijuana for medical use by qualifying patients in the state.

The petitioner had experienced chronic pain since he suffered injuries in a construction site accident in 2001, andmedical marijuana (prescribed after multiple surgeries and other failed treatments) provided some relief from his symptoms. In July 2018, a workers’ compensation judge ordered M&K Construction to reimburse the petitioner for the costs associated with his use of medical marijuana, which totaled $616 per month for the prescription.  The company appealed, contending that the order violated the CSA. The company asserted that the CSA, as federal law, preempts the state-law MMA, because it would be impossible to comply with both statutes.

Thirty-three states, including New Jersey, have legalized medical marijuana. Preemption – and specifically, whether the CSA preempts a state law permitting medical marijuana in the context of a workers’ compensation case — was an issue of first impression in New Jersey.  However, at least two other courts have considered similar issues relating to the interplay between state medical marijuana laws and federal law.  In 2015, the New Mexico Court of Appeals determined that the CSA did not preempt New Mexico’s medical marijuana act.  In 2018, a court in Maine reached the opposite conclusion, finding that the CSA did preempt the state’s medical marijuana law.

Here, in determining that no conflict existed between the CSA and MMA, the New Jersey Appellate Division found that an employer’s reimbursement of a registered MMA patient’s use of medical marijuana does not require the employer to possess, manufacture or distribute marijuana – which are the actions proscribed by the CSA.  The court concluded that the construction company “is not an active participant in the commission of a crime” by reimbursing the petitioner – instead, the employer merely would be complying with an order requiring it to reimburse a person for the legal use of medical marijuana under New Jersey law.

Moreover, the court found that the construction company failed to identify any instance where an employer or insurance carrier was prosecuted under federal law for reimbursing an employee for the employee’s authorized medical marijuana treatment.

As state medical marijuana programs continue to multiply, we anticipate that courts will face a growing number of cases questioning the interplay between state and federal marijuana laws.  The New Jersey Appellate Division’s decision in Hager v. M&K Construction could carry weight in other jurisdictions where courts have not yet considered such legal questions.