By Judge Jennifer F. Nicaud

Mississippi Workers Compensation Commission

Jackson, MS

The cannabis sativa plant, otherwise known as marijuana, has been used as a medicinal product for decades. Delta-9-tetrahydrocannabinol, or THC is the main psychoactive chemical in marijuana which is responsible for most of the intoxicating effects sought by consumers. THC is found in the resin produced by the leaves and buds primarily of the female cannabis plant. The plant also produces hundreds of other chemicals including more than 100 compounds which are chemically related to THC called cannabinoids. In addition, the cannabis plant produces chemicals with anti- inflammatory constituents such as cannabidiol or CBD. Thus, cannabis and its derivatives generally fall within one of two categories: marijuana or hemp.[1]

The first regulation of marijuana occurred with the 1906 Pure Food and Drug Act. The Pure Food and Drug Act required the labeling of over-the-counter drugs containing cannabis. In 1937, Congress passed the Marihuana Tax Act which imposed an occupational excise tax upon certain dealers and dealings in marijuana. The Act did not criminalize the drug, per se, but failure to pay taxes or follow regulations was punishable by fines up to $2,000, up to five years in jail, or both[2]. In 1969, the Supreme Court struck down the Marihuana Tax Act as a violation of the Fifth Amendment protection against self-incrimination in Timothy Leary v. United States, 395 U.S. 6, 89 S. Ct. 1532 (1969). Thereafter, Congress sought to create a new system for classifying drugs based on their medical utility and addictive potential. As a result, in 1970, the Controlled Substances Act (“CSA”) was passed to establish a federal drug policy.[3] Under the CSA, marijuana as well as heroin and LSD were classified as Schedule I drugs which were defined as drugs in which there was no currently accepted medical use with a high potential for abuse. Thus, marijuana and all cannabis products (except hemp and CBD containing less than .3% of THC- not prohibited under the CSA) remain illegal in the United States under federal law.

In 1996, California became the first state to enact medical marijuana legislation with the Compassionate Use Act. In the next four years, Oregon, Alaska, Washington, Maine, Hawaii, Nevada, and Colorado passed similar laws with regard to the use of medical marijuana. Colorado became the first state to decriminalize recreational marijuana in 2014. As of April 24, 2023, approximately 38 states and the District of Columbia have legislation which allows cannabis consumption for patients with qualifying medical conditions. The medical conditions in which cannabis has been prescribed vary from state to state but include cancer, multiple sclerosis, epilepsy, glaucoma, and chronic pain such as with lower back injuries. There are many emerging issues as to evidence supporting the use of cannabis to treat the aforementioned medical conditions. Scientific studies support the use of cannabis to support the end of severe pain, the rigidity of muscles due to a brain/spinal cord injury or multiple sclerosis, and to prevent nausea caused by chemotherapy. In March of 2023, it was estimated that more than 2.97 million people nationwide are enrolled with state medical marijuana programs.[4]

Prior to August of 2023, the U.S. Department of Health and Human Services (“HHS”) repeatedly opined that the drug’s chemistry is not known or consistently reproducible and opined that marijuana had no medical use. In addition, prior to 2023, the U.S. Food and Drug Administration (FDA) had not approved or recommended the use of cannabis as a drug, and, as a result, health insurance carriers generally do not reimburse the costs of cannabis used for medicinal purposes.[5] In a letter dated August 29, 2023, Rachel Levine ( HHS Assistant Secretary) provided a formal recommendation to Anne Milgrim ( Drug Enforcement Administration (DEA) Agency Administrator ) to reclassify rescheduling marijuana from a Schedule I drug to a Schedule III drug. The recommendation came seven years after the DEA declined to initiate rulemaking to reschedule marijuana. The HHS recommendation is predicated, via the FDA, on a scientific and medical evaluation of marijuana, using a statutorily required eight-factor analysis (“8FA”). The eight-factor analysis includes: (1) marijuana’s actual or relative potential for abuse; (2) scientific evidence of its pharmacological effect, if known; (3) the state of current scientific knowledge regarding the drug or other substance; (4) its history and current pattern of abuse; (5) the scope, duration, and significance of abuse; (6) what, if any, risk there is to the public health; (7) its psychic or physiological dependence liability; (8) whether the substance is an immediate precursor of a substance already controlled under the CSA. The FDA concluded that marijuana has acceptable medical uses and a moderate to low risk of physical dependence compared to other Schedule I drugs like LSD and heroin. FDA’s analysis concluded that marijuana has less potential for abuse than other Schedule I or II substances and has a clinically accepted medical use in the United States (including for nausea and lack of appetite associated with chemotherapy and for pain management). FDA found that even for heavy chronic users, marijuana withdrawal syndrome appears to be relatively mild compared to the withdrawal syndrome associated with alcohol, which can include more serious symptoms such as agitation, paranoia, seizures, and even death. Importantly, FDA determined that risks to the public health posed by marijuana are lower compared to other drugs of abuse (e.g., heroin, oxycodone, cocaine). The change would allow marijuana to be classified as Schedule III substance which is defined by CSA as those substances “with a moderate to lower potential for physical and psychological dependence”, and include ketamine, certain over-the-counter pain relievers, and anabolic steroids.

Prior to the FDA’s 8FA study, in June 2014, a Stanford University study found that the legalization of medical marijuana did not reduce the rate of fatal opioid overdoses[6]. There is compelling data showing that cannabis may be associated with changes in brain structure in young people, particularly in the prefrontal cortex, which is associated with decision-making and executive function. Other epidemiological evidence suggests that heavy and early use of cannabis is associated with increased risk of developing schizophrenia, bipolar disorder, depression, and anxiety. For over two decades, Deepak Cyril D’Souza, MD, Albert E Kent Professor of Psychiatry at Yale School of Medicine studied the relationship between cannabis and psychosis, in which an individual experiences a loss of reality after using a high-potency product. Emerging studies suggest that cannabis use leads to an increased risk of reporting psychotic symptoms. A 2022 study, for instance, found a significant correlation between the number of cannabis dispensaries and rates of psychosis presenting in emergency departments[7].

In addition, a July 2019 article from the National Institute on Drug Abuse (NIDA)[8] noted that more research was needed to be done on the effect of medical marijuana laws, on opioid overdose deaths and cautioned against drawing a causal connection between the two. The NIDA study noted that there may be a relationship between availability of medical marijuana and opioid analgesic overdose mortality. One of NIDA’s funded studies published in 2014 showed that opioid deaths had decreased in states with medical marijuana laws, but extending the data through 2017 showed a reversal in that trend. NIDA’s conclusion is that more research is still needed on the benefits of cannabis or cannabinoids. In contrast, a 2018 article from PropertyCasualty360[9] noted that opioid abuse has cost employers $18 billion a year and individual workers may face a personal toll of potential job loss, family and legal problems, and addiction. So, pursuing options that are less addictive and equally or more effective than opioids, with fewer side effects, was warranted. The article noted that “marijuana is thought to be significantly less addictive, and doesn’t lead to overdoses, according to medical experts.”[10]

Thus, medical experts opine about significant potential benefits, but with lack of adequate medical evidence, medical marijuana exists in a relatively new space for the treatment of injuries – especially those in workers’ compensation. Supporters of medical marijuana believe the drug is critical for injured workers as a method for treating many common work-related injuries, including those with chronic pain. A 2021 study conducted by the National Bureau of Economic Research (NBER) found that in states where marijuana has been legalized for adult use, there has been a decrease in workers’ compensation claims. In the midst of a national opioid epidemic, the idea of a less addictive and less expensive medication to treat pain long-term has become increasingly appealing to many insurers.

However, some states as well as provincial boards in Canada have supported reimbursement for cannabis costs in workers’ compensation claims as a possible alternative to opioids for pain management. There are several factors which appear to be indicative of successful reimbursement for cannabis in the workers’ compensation area. First, the claimant must be diagnosed with a qualifying medical condition under the state’s relevant law and registered in the state’s medical cannabis program. Second, the use of medicinal cannabis must be established as a reasonable and necessary medical care for the claimant as part of his/her workers’ compensation claim as determined by his/her treating physician.[11] At this time, cannabis remains a Scheduled I substance under the CSA, physicians can only “recommend” but not “prescribe” the use of cannabis to treat a qualifying condition according to the FDA. Cannabis must be established as a medical treatment of law resort. In other words, other FDA-approved prescription pain relief medications must first be tried and shown to be unsuccessful before cannabis can be recommended. This process will no doubt significantly change if marijuana is rescheduled.

Another limiting factor in some states and Canadian provinces is the restriction as to the type of occupation a claimant can be engaged in to receive cannabis reimbursement. Some jurisdictions require a full risk assessment which involves a review of all occupational and worksite risks as well as a review of the impact on the work environment, co-workers and the individual’s ability to perform safety sensitive tasks including operating a motor vehicle or equipment.

In some states, the dosage of cannabis, the amount supplied, and ongoing physician monitoring are required for cannabis reimbursement. Some studies indicate it is an indication that the average levels of THC have increased from 4% in 1995 to 15% in 2017[12]. THC levels must be included in cannabis labeling but there is a lack of uniform standards for processing, testing, and labeling. Also, the dosage can vary due to the method of consumption as a vapor or an edible.

Some states allow for reimbursement for cannabis in workers’ compensation claims but the amount of supplied cannabis that will be reimbursed varies. In New Hampshire, claimants cannot obtain more than two ounces of cannabis over ten days. In Connecticut, the amount possessed by a claimant should not exceed the amount reasonably necessary to ensure uninterrupted availability for one month. In New Mexico, where a workers’ compensation fee schedule was developed, the limit is a claimant’s consumption in a three-month period. Other states require claimants to receive ongoing physician monitoring and demonstration of subjective patient improvement and objective clinical improvement (such as work ability). This gray area creates confusion for carriers and third-party administrators (“TPA”). Thus, while marijuana is classified under the CSA as a Schedule I substance, many TPAs deny coverage due to a fear of running afoul of federal regulations and any inadvertent liability; however, if marijuana is changed to a Schedule III drug, many TPAs may change their position. Employers in a safety-sensitive industry (or with safety-conscious risk managers) may be more likely to support a treatment if it is widely accepted. On the other hand, in industries where injured workers cannot return to work while using either opioids or medical marijuana (as a Schedule I drug), the employer may be more willing to allow medical marijuana treatment based on perceived cost savings or long-term benefits (when compared to opioid use).[13]

Other difficulties arise under Drug-free Workplace Act of 1988 as all federal agencies, federal grantees, and companies with federal contracts of $100,000 or greater are required to maintain drug-free workplaces. While many states treat certified medical marijuana use as a disability, there are exceptions when the protection would otherwise conflict with federal requirements. Similarly, safety-sensitive industries such as oil and gas and transportation (aviation, railroads, trucking) that are federally regulated also must maintain drug-free workplaces.

No state requires employers to accommodate cannabis use at the workplace. Twenty-four states and the District of Columbia currently provide anti-discrimination protections to a worker who uses medical cannabis outside the workplace. However, a worker can be subject to disciplinary action which includes termination if found to be working under the influence or impaired at work due to cannabis use outside the workplace.

Determining impairment from cannabis use is not clear. Testing focuses on levels of tetrahydrocannabinol (THC), and detection of THC varies with the kind of test (blood, hair, saliva, urine) and the frequency of recent usage. While drug tests reflect varying degrees of success in detecting the presence of THC, there are no reliable tests that accurately identify the timing of the last drug usage (i.e., during off-hours or on the job). The Journal of Medical Toxicology and Mayo Clinic Proceedings demonstrated that urine testing for THC does not correlate with acute impairment as cannabis is stored in body fat and released into the bloodstream over days or weeks after its initial use[14]. There is an indication that the measurement of THC and metabolites in serum or plasma above 5 nanograms per milliliter is a better indicator of impairment. Thus, a worker’s positive test for marijuana does not necessarily mean the worker was impaired and unable to do their job safely.  In addition, issues arising from states with laws regarding the Rebuttable Presumption of Intoxication which allows for the denial of a workers’ compensation claim if the worker tested positive for marijuana at the time of injury.

What is the future of medicinal cannabis? The de-scheduling of cannabis on the federal level would accelerate the use of cannabis where it is determined to a reasonable and necessary treatment for difficult to manage work related conditions. Rescheduling marijuana would have a critical impact on medical marijuana programs and products. With respect to medical marijuana, a key difference between placement in Schedule I and Schedule III is that substances in Schedule III have an accepted medical use and may lawfully be dispensed by prescription, while substances in Schedule I cannot. If marijuana is rescheduled as a Schedule III drug, businesses that manufacture, distribute, dispense, and possess medical marijuana would be able to do so legally under the CSA, subject to state and federal licensing and manufacturer registration schemes. Further, such rescheduling would render certain manufacturers subject to increased FDA oversight, including requiring manufacturer registration and compliance with current good manufacturing practices. The FDA likely would release additional regulations regarding composition, labeling and advertising. Research limitations also may decrease, which could further encourage innovation in the industry. Users of medical marijuana would need to obtain valid prescriptions for the substance from medical providers, subject to federal legal requirements that differ from existing state regulatory requirements for medical marijuana.

To reschedule marijuana, the DEA must follow procedures outlined in CSA and the Administrative Procedures Act (APA). The CSA governs the production and distribution of drugs in the U.S. The APA governs how agencies operate and, relevantly, how agencies issue regulations. Federal law outlines the authority and criteria for the classification of substances. Section (a) of 21 USC 811 states that “rules relating to this statute subsection shall be made on the record after opportunity for a hearing pursuant to the rule making procedures prescribed by [the APA, specifically 5 USC 553].” The APA requires that the DEA provide interested persons an opportunity to submit comments, which the DEA must consider when issuing any rules related to the CSA. This is commonly referred to as the notice and comment period. The public must have at least 30 days to provide comments, with some exceptions, including when a matter relates to the foreign affairs functions of the U.S. However, the DEA could determine that, due to treaty obligations, it can reschedule marijuana by order rather than through the standard rule making process. HHS provided its recommendation to the DEA that marijuana be rescheduled from Schedule I to Schedule III in August 2023. Once the DEA makes a determination that marijuana should be rescheduled, the DEA could initiate rule making, or based on its interpretation of treaty obligations, it could reschedule marijuana by order. While the DEA maintains final authority to reschedule marijuana, under the CSA.

In Gonzales, Attorney General et al v. Raich, et al 545 U.S. 1 (2005), the U. S. Supreme Court determined that states could actually legalize marijuana because the states cannot change federal law, and the Constitution’s Supremacy Clause dictates that federal law takes precedence over conflicting state laws. So long as marijuana is a Schedule I controlled substance under the CSA, all unauthorized activities involving marijuana are federal crimes anywhere in the United States, including in states that have purported to legalize medical or recreational marijuana. However, laws have been passed to encourage the use of medical marijuana.  In July of 2023, the U.S. House of Representatives introduced a bipartisan bill entitled Cannabis Users Restoration of Eligibility Act, or CURE Act, that would allow marijuana users to be hired by the federal government and obtain federal security clearances. In addition, the House introduced the Veterans Medical Marijuana Safe Harbor Act, which aimed to make medical marijuana treatment available for military veterans with similar requirements for licensing and approval authority. Moreover, H.R. 84542[15] was signed into law on December 2, 2022, and has opened the door to allow for research on medical marijuana. The PREPARE Act was reintroduced in a bipartisan bill in 2023 to establish a Commission on the Federal Regulation of Cannabis.

Thirty-eight states have legalized medical marijuana; only of these 27 states have legalized recreational and medical marijuana.[16] As of October 2021, six states (CT, MN, NH, NJ, NM, NY) explicitly allow for workers’ compensation insurance reimbursement for an injured worker’s medical marijuana use either under a court or administrative ruling or pursuant to an administrative rule[17]. Another six states (ME, MA, FL, ND, OH, WA) expressly prohibit workers’ compensation reimbursement for an injured worker’s medical marijuana use. In addition, 14 states (AZ, AR, CA, CO, DE, IL, LA, MI, MO, NV, OR, PA, UT, VT) have determined that insurance carriers cannot be required to reimburse for an employee’s medical marijuana use; thus, there is some speculation as to whether reimbursement might be provided voluntarily in some cases.[18]

The 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, as of March of 2023, only four state Supreme Courts have addressed this issue and their decisions are split down the middle.

The Supreme Courts of New Hampshire and New Jersey 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. In contrast, the Supreme Courts of Maine and Minnesota 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 prescription. 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, the United States Supreme Court was called upon to clarify as to whether the CSA preempts a State workers’ compensation order requiring an employer to reimburse an injured employee for the cost of medical marijuana and has declined to do so.

Upon receipt of the determination by the Minnesota Supreme Court decision in Musta v. Mendota Heights Dental Center, 965 N W 2d 312, S.Ct. Minn. (Oct 2021) the parties sought intervention from the U.S. Supreme Court. In Musta, the Claimant injured her neck while working as a dental hygienist for her Employer. After all medical interventions failed to relieve the Claimant’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 admitted work-related injury. Thereafter, the Claimant sought reimbursement for her purchase of medical marijuana from her Employer. 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.

The majority of the Minnesota Supreme Court[19] ultimately found 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. The Minnesota Supreme Court determined as Mendota could not 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.

Thereafter, the claimant filed a petition for writ of certiorari to the United States Supreme Court.[20] In her petition, Musta re-presented her 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 U.S. Supreme Court[21], addressing their opinion that this specific issue presented did not warrant the U.S. Supreme Court’s review at this time. The crux of the Government’s argument against review by the U.S. Supreme Court’s was that Minnesota’s Supreme Court decision should be maintained 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. 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. The U.S. Supreme Court declined to review the Musta case.

A more recent case, Bourgoin v. Twin Rivers Paper Company[22] considered the issue of reimbursement for medical cannabidiol (CBD). 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 them from the CSA, and the fact that the gummies had not been approved for use by the FDA, 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.[23]

As the rescheduling of marijuana from a Schedule I drug to a Schedule III drug is on the brink of occurring, the gravity of rescheduling will not be fully afforded until it occurs. There is no question approval and supervision of the FDA of marijuana may change the reimbursement and accessibility of the drug in workers’ compensation.

[1] Congressional Research Service, “Legal Consequences of Rescheduling Marijuana,” May 1, 2024
[2] The goal of this Act was to reduce the hemp industry through excessive tax. It is rumored that William Randolph Hearst was supported the Act as hemp was seen cheap substitute for paper pulp and as a result Hearst’s extensive timber holdings were threatened. Sterling Evans (2007). Bound in twine: the history and ecology of the henequen-wheat complex for Mexico and the American and Canadian Plains, 1880-1950. Texas A&M University Press. p. 27. ISBN 978-1-58544-596-7.
[3] Congressional Research Service, “Legal Consequences of Rescheduling Marijuana,” May 1, 2024
[4] 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/.
[5] American Academy of Actuaries, “Navigating Workers’ Compensation and Medical Marijuana”, April 2023.
[6] Mandy Erickson “ Medical Marijuana does not reduce Opioid Deaths,” Stanford Medicine News Center, June 10, 2019
[7] Id.
[8] “Medical Marijuana Laws and Opioid Overdose Rates”; National Institute on Drug Abuse; National Institutes of Health; July 5, 2019.
[9] “Using medical marijuana to treat construction workplace injuries”: Property Casualty 360; Jan. 29, 2018.
[10] Id.
[11] Many states require that a physician obtain a license to recommend medical marijuana, and the recommendation must be filed by a licensed marijuana dispensary.
[12] Ethan Andrew, “Not Your Grandmother’s Marijuana: Rising THC Concentrations in Cannabis Can Pose Devasting Health Risks”, Yale School of Medicine Health News, August 23, 2023.
[13] Id.
[14]
[15] https://www.congress.gov/bill/117th-congress/house-bill/8454
[16] American Academy of Actuaries, “Navigating Workers’ Compensation and Medical Marijuana”, Issue Brief, April 2023.
[17] Id.
[18] Id. citing “Workers’ Compensation Reimbursement for Medical Marijuana Usage Reviewed”; LexisNexis; Oct. 21, 2021
[19] 965 N.W.2d 312 (2021)
[20] 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)
[21] Brief for the United States as Amicus Curiae, Musta v. Mendota Heights Dental Center, No. 21-676, 21-998 (U.S. May 16, 2022)
[22] 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).
[23] Id. at paragraph 3.