New York is currently taking steps to investigate the possible legalization of recreational marijuana in New York.

In July 2017 we talked about the Marijuana Regulation and Taxation Act (“MRTA”), S.3040B/A.3506B, in Medical Marijuana 101: The State of the Law in NY. At that time, the bill, which seeks to regulate the growth, taxation, and distribution of recreational marijuana in New York, was sitting idly in the Senate Finance Committee. On January 11, 2018, however, the New York State Assembly Standing Committees on Codes, Health, and Alcohol and Drug Abuse held a public hearing to discuss the MRTA. The hearing reviewed the potential for allowing the regulated sale and adult possession of marijuana in New York and how it would affect public health and the criminal justice systems. A transcript and video recording of the hearing can be found here.

The hearing was held just days before Governor Andrew Cuomo’ annual budget address on January 16, 2018. During his budget address Governor Cuomo stated that New York should undertake a study of the possible impacts of legalizing recreational marijuana. The study would be undertaken by the NYS Department of Health, with input from state police and other state agencies, to determine the health and economic impacts of legalizing the drug.

“New Jersey may legalize marijuana. Massachusetts already has. On the other hand, Attorney General Sessions says he’s going to end marijuana in every state. So you have the whole confluence of different information,” Cuomo said during his presentation to the Legislature.  “I think we should fund [the Department of Health] to do a study. Let them work with state police and other agencies. Look at the health impact and economic impact,” he said during his address.

This is a change from Governor Cuomo’s position from last February in which he told reporters that he remained “unconvinced on recreational marijuana.”

This change of heart, however, shouldn’t come as a surprise to most New Yorkers. Momentum for marijuana reform has been building steadily in New York since the passage of the Medical Marijuana Act in 2014. A poll of New York voters released in late 2017 showed that over 62% of New Yorkers support making marijuana use legal in New York for adults over the age of 21. In addition, more than 60% of those polled stated that they prefer using revenue from a legal marijuana market to address New York’s budget deficit over other options such as increasing sales taxes, increasing highway and bridge tolls and cutting public service funds.

The recreational use of marijuana is already legal in a growing number of states, including Washington, Oregon, Nevada, California, Alaska, Colorado, Maine, Massachusetts and the District of Columbia.

In New Jersey, newly elected Democratic governor Phil Murphy stated in his inauguration speech that his vision for a “stronger and fairer New Jersey … includes a process to legalize marijuana.” He aims to legalize marijuana within his first 100 days in office.

In Massachusetts, Gov. Charlie Baker signed a bill legalizing recreational marijuana on July 28, 2017. The law permits adults over the age of 21 and who are not participating in the state’s medical marijuana program to legally grow up to six plants and to possess personal use quantities of marijuana up to one ounce and/or up to 5 grams of concentrate. The regulations also allow for the licensing of commercial marijuana production and retail sales. Regulations with regard to the commercial marijuana market will go into effect on July 1, 2018.

In January 2018 Vermont became the first state in the country to legalize marijuana by legislation rather than through a citizen referendum. The new law, H. 511, takes effect on July 1, 2018. Similar to the regulations passed in Massachusetts, the Vermont law authorize adults over the age of 21 to legally possess up to one ounce of marijuana, and/or to privately cultivate up to six marijuana plants. The regulations also impose new civil penalties for consuming marijuana while driving, and imposes additional penalties for those who operate a motor vehicle impaired with a minor in the vehicle.

What happens in New York remains to be seen, but it is clear that the debate over whether to legalize the recreational use of marijuana is just getting started.

As discussed in our January 5th blog post, the Cole Memorandum was rescinded by Attorney General Jeff Sessions on January 4th of this year.   The Cole Memorandum had served to formally announce the DOJ’s policy that it would not interfere with medicinal marijuana legalized under state law, despite marijuana’s continued illegality for all purposes under federal law. With the rescission of the Cole Memorandum, federal prosecutors are now free to determine to what extent they will enforce federal law against the state-legalized medical marijuana industry.

However, the effect of the change in policy reaches further than to just the cultivators, manufacturers and distributors of medicinal marijuana products. Pursuant to the Controlled Substances Act, not only is it illegal to manufacture, distribute or dispense marijuana for any purpose – but it is also illegal to aid someone in doing so. Therefore, the DOJ is now free to prosecute anyone “aiding” in a medical marijuana business, for example, giving legal advice.

Probably of greater practical concern to attorneys than criminal prosecution is the tremendous amount of uncertainty as to how the change in policy will impact the ethics surrounding the representation of medical marijuana clients. Most, if not all, states have ethical rules that specifically prohibit a lawyer from assisting a client in illegal conduct. These rules do not distinguish between conduct that is illegal under federal law but expressly permitted under state law.

New York Rule of Professional Conduct 1.2 provides that “[a] lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is illegal or fraudulent, except that the lawyer may discuss the legal consequences of any proposed course of conduct with a client.” While it is generally undisputed that an attorney may advise a client about what state law provides – for example, filing requirements – an attorney arguably would be violating the Rules of Professional Conduct by, for example, assisting a client in negotiating a marijuana distribution contract.

Ethics boards in some states, including New York, have used the Cole Memorandum as the decisive factor to conclude that providing legal advice related to legalized medical marijuana businesses does not violate ethics rules. To a lesser extent, some states, including New York, have also relied on the theory that state ethics rules are intended to promote state policy – and by approval of the state medicinal marijuana law, a state has expressed its state policy on the matter, yielding no ethical violation.

It remains to be seen what impact the rescission of the Cole Memorandum will have on the ethics opinions of various states that are based heavily upon the prior policy of federal non-enforcement. For now, we can still find comfort in the Rohrabacher-Blumenauer amendment to the federal budget, which currently continues in effect until February 8 and maintains that federal funds (including those allocated to the DOJ) cannot be used to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.”

While marijuana is legal for medical and, in some instances recreational, use under the laws of 29 states plus the District of Columbia, under federal law it remains illegal. Yet, for the last several years, this lingering federal illegality has not seemed to chill entry into the industry – thanks in large part to the Cole Memorandum. On the heels of the January 4 rescission of the Cole Memorandum, as well as two additional memos related to marijuana enforcement policy, all of that might change.

A federal statute, the Controlled Substances Act (the “CSA”) makes it illegal to manufacture, distribute or dispense marijuana for any purpose. Under the CSA, marijuana is a Schedule 1 drug, meaning that under federal law marijuana is believed to have no currently accepted medical use and a high potential for abuse. Moreover, the Schedule 1 classification extends to all elements of the cannabis plant, including extracts and derivatives thereof. No exceptions exist in the CSA for medicinal use or use in states where marijuana has been legalized.

However, in 2013, the U.S. Department of Justice (“DOJ”) issued the Cole Memorandum, which states that its general policy is not to interfere with the medicinal use of marijuana under state law. The Memorandum set forth certain principles underpinning DOJ enforcement of the CSA with respect to marijuana. Although the DOJ said it would continue to prosecute persons or organizations whose conduct interferes with any one or more of these principles, regardless of state law, the memorandum went on to declare that where state law effectively mitigates the concerns of the DOJ, the Department will refrain from prosecution.

Since the change in administration in 2017, there has been an increasing sensitivity to a shift in DOJ policy on enforcing the CSA against “legalized” marijuana businesses. Attorney General Jeff Sessions has publicly discussed his harsh stance on marijuana and the potential for increasing federal enforcement of the federal law regarding marijuana – despite what state law provides. In fact, in May 2017 he sent a letter to certain political leaders advising of his desire to do so.

Sessions has now gone a step further and rescinded the Cole Memorandum, leaving federal prosecutors free to determine to what extent they will enforce the CSA against state-legalized marijuana businesses. A copy of the release can be found here and a copy of the memorandum can be found here.

While likelihood of prosecution will vary from jurisdiction to jurisdiction based upon the position of the particular U.S. Attorney in charge of the district, it is clear that the rescission will have a broader impact than just the potential of prosecution of those involved in the industry. As discussed in our November 27, 2017 post, Cannabis Business? The Impact of Federal Law Might reach Further than You Think, the CSA and federal illegality of marijuana has a far-reaching impact on those setting up or running marijuana businesses that are legal under state law. It is anticipated that the rescission of the Cole Memorandum will, among other things, further impair the ability of those in the marijuana business to obtain leases, financing, and perhaps even legal assistance.

State and federal representatives of several states have already publicized their positions on the January 4 memorandum, with many being unfavorable. It would not be surprising if political leaders mobilized quickly to protect the cannabis industry, which has already injected over $20 billion into the U.S. economy and is expected to increase that number to about $70 billion by 2021. In the short term, those in the industry can continue to find some comfort in the Rohrabacher-Blumenauer amendment to the federal budget, which continues in effect until January 19 and maintains that federal funds cannot be used to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.” In the meantime, we will all be waiting with baited breath to see the responses of state and federal leaders.

As we previously discussed in Medical Marijuana 103: Patient and Practitioner Regulations in New York State, practitioners in New York must be registered with the New York State Department of Health (“DOH”) in order to certify patients for medical marijuana use. The DOH maintains a list of registered practitioners on its website, however such list is woefully incomplete. As of the date of this writing there are over 1,360 providers statewide that are registered to certify patients for medical marijuana, but only 32 percent are included on the public list maintained by the DOH.

On Wednesday, November 28, 2017, Governor Andrew Cuomo signed a bill which requires the the DOH to list on its website all practitioners who are certified to recommend medical marijuana to patients.

Sen. Diane Savino (D-Staten Island), the primary sponsor of the bill, stated that one of the biggest complaints from patients in the medical marijuana program was finding a registered doctor.

“People complained that it was difficult to find a doctor near them so they could  be certified as a patient. Because the Department of Health kept the list proprietary, it made it that much harder for patients,” said Senator Savino.

A vote on the bill was held in June 2017, with 62 senators voting in favor of the bill and only 1 senator opposing it. The bill requires that the name, contact information, and other information relating to practitioners registered with the DOH to certify patients for medical marijuana be public information and that the information be maintained on the DOH’s website in searchable form. There is an exception, however – practitioners may still opt-out if they do not wish for their information to be public by informing the DOH in writing. The new requirements will be implemented sixty (60) days after the bill was signed into law by Governor Cuomo.

Sen. Savino was also the main proponent of the bill signed on November 11, 2017 by the Governor which adds post traumatic stress disorder to the list of qualifying conditions treatable with medical marijuana in New York State. The date on which the bill was signed into law is no coincidence, as veterans groups in particular had urged Governor Cuomo to allow those with PTSD to use medical marijuana. According to the Department of Veterans Affairs, about eight million adults suffer from PTSD in any given year, including tens of thousands of Afghanistan and Iraq veterans. Somewhere between 11% and 20% of those vets will suffer from it each year.

Everyone involved, or thinking about becoming involved, in the cannabis business is aware of the conflict between the laws of those states legalizing marijuana and the Controlled Substance Act (the “CSA”).  The CSA is a federal law making it illegal to manufacture, distribute or dispense a controlled substance.  For purposes of the CSA, marijuana is classified as a Schedule 1 controlled substance – making it illegal under federal law to be engaged in the marijuana business regardless of what state law provides.

The obvious consequence of this conflict of laws is the potential for federal prosecution for engaging in the marijuana business.  However, the not-so-obvious practical consequences reach further than you might think.  For example,

  • Taxes. Section 280E of the Internal Revenue Code, originally targeted for illegal drug dealers, prohibits cannabis businesses from deducting typical business expenses, such as advertising and rent.
  • Leases.  Most leases have covenants against “illegal activity,” which enables landlords to evict marijuana business tenants.  Moreover, many landlords are unwilling to rent to marijuana businesses, despite their legality under state law, for fear of losing their property in a federal civil asset forfeiture action.
  • Banking. In 2014 the Department of Treasury issued guidance for financial institutions that want to do business with the marijuana industry.  Up until that time, banks were reluctant to deal with the marijuana business due to the Financial Crimes Enforcement Network (FinCEN), which requires banks to investigate their customers and to refrain from negligently or knowingly doing business with bad actors.  Today, banks are safe if they follow some pretty onerous rules.  Many banks choose not do business with the industry rather than comply with the diligence and monitoring requirements set forth by the Department of Treasury.
  • Commercial loans. Commercial loans are difficult to obtain without providing collateral; however, in a marijuana business, banks are not allowed to seize or possess the primary asset of a marijuana business – the marijuana – under federal law. Often a marijuana business will not have many other assets that are valuable enough to act as security for financing.
  • Trademarks. Because marijuana is illegal under the CSA, and because the United States Patent and Trademark Office will not register a mark if the applicant cannot show lawful use of the mark in commerce, it is nearly impossible to secure federal registration of a marijuana-related mark (although marks for ancillary products might be obtained).
  • Federal Water. Many areas in the western United States are served by the Federal Bureau of Reclamation, which manages water and power to farmers.  The Bureau has advised that it will report to the Department of Justice any marijuana farmers who use federal water to irrigate their crops.
  • Bankruptcy. At least two courts have held that marijuana businesses cannot take advantage of federal bankruptcy laws.  The rationale is that, because marijuana is illegal under federal law, granting relief under another provision of federal law for the same activity would be “administering the fruits and instrumentalities of Federal criminal activity.”
  • Access to Federal Courts. If you enter into a contract with a marijuana business and need to sue in federal court, will you be able to?  This question has yet to be answered; however, if the prohibition against bankruptcy relief serves as guidance, the outcome is likely not favorable to marijuana businesses.

It is clear that federal law creates many obstacles to establishing and effectively managing a marijuana business.  Those in the industry should plan carefully and seek legal advice as to how to best mitigate the risks arising from the conflict between state and federal laws.

On November 1, 2017, the Food and Drug Administration (FDA) published a release concerning its issuance of warning letters to four companies concerning the marketing of products containing cannabidiol (CBD).

CBD is a cannabinoid found in hemp which lacks the psychoactive ingredient THC. Hemp and its derivatives are legal to import to the US and ship from state to state. According to a 2013 review published in the British Journal of Clinical Pharmacology, CBD may help in reducing nausea and vomiting; seizures; psychosis disorders; inflammatory disorders; tumor and cancer cells; and anxiety and depression disorders. CBD can be marketed in a variety of product types, such as oil drops, capsules, and topical lotions. CBD oil is legal in New York State.

The four companies that received warning letters from the FDA — Greenroads Health, Natural Alchemist, That’s Natural! Marketing and Consulting, and Stanley Brothers Social Enterprises LLC — are accused of illegally selling CBD products online that claim to prevent, diagnose, treat, or cure cancer without evidence to support these outcomes. The FDA’s warning letters further provide that the four companies distributed the products with unsubstantiated claims regarding preventing, reversing or curing cancer; killing/inhibiting cancer cells or tumors; or other similar anti-cancer claims. Some of the products were also marketed as an alternative or additional treatment for Alzheimer’s and other serious diseases.

Examples of claims made by these companies include:

  • “CBD makes cancer cells commit ‘suicide’ without killing other cells”
  • “…considering the lack of risks associated with CBD it is an attractive alternative or addition to anyone’s treatment for Alzheimer’s disease.”
  • “Adding CBD oil as part of your daily Alzheimer’s medicine routine has a good chance at delaying the progression of the disease…”

“Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors. We don’t let companies market products that deliberately prey on sick people with baseless claims that their substance can shrink or cure cancer and we’re not going to look the other way on enforcing these principles when it comes to marijuana-containing products,” said FDA Commissioner Scott Gottlieb, M.D. “There are a growing number of effective therapies for many cancers. When people are allowed to illegally market agents that deliver no established benefit they may steer patients away from products that have proven, anti-tumor effects that could extend lives.”

Each company is being offered fifteen (15) working days after receipt of the warning letter to notify the FDA in writing of the specific steps that it has taken to correct the violations. The FDA letters warn that the company’s failure to correct the violations promptly may result in legal action, including product seizure and injunction.

In our previous post, Medical Marijuana 103: Patient and Practitioner Regulations in New York State, we discussed that patients certified for medical marijuana use can designate up to two caregivers. Caregivers can assist patients who are unable to pick up medical marijuana at a dispensing facility or are unable to administer medical marijuana to themselves properly.

Previously the Medical Marijuana Program only allowed for designated caregivers to be natural persons. On October 5, 2017, however, the New York State Department of Health (“DOH”) issued emergency regulations that expand the definition of caregiver to allow certain facilities to be designated caregivers. By expanding the definition in this way, patients who are located in or reside at certain facilities can designate their facility as their caregiver, thus making it easier for such patients to obtain medical marijuana.

The new regulations define a designated caregiver as either a natural person or a facility. The term “facility” is further defined as, among others, hospitals, adult day care facilities, community mental health residences, and private and public schools. In addition, each division, department, component, floor or other unit of a parent facility may be designated as a “facility” for purposes of being designated a caregiver.

Just like natural persons, facilities will need to register with the DOH in order to be designated a caregiver for purposes of the Medical Marijuana Program. Once registered with the DOH facilities will be authorized to lawfully possess, acquire, deliver, transfer, transport and/or administer medical marijuana to certified patients residing in, or attending, that facility.

The DOH considered alternatives prior to issuing the emergency regulations, stating:

The Department could have chosen to keep the status quo and not allow patients to designate facilities as designated caregivers. The Department could have also allowed certified patients to designate an individual within the facility to be a caregiver. However, these options are not viable since patients in facilities may be cared for by multiple staff members in the course of a day. Certified patients have severe debilitating or life-threatening conditions and the regulatory amendments would help to prevent adverse events associated with abrupt discontinuation of a treatment alternative that may be providing relief for certified patients in these facilities.”

The regulations were published in the New York State Register on October 25, 2017. The DOH will accept comments from the public for a minimum of 45 days following the date of publication. After publication in the Register and receipt of public comment, the agency may either adopt, revise or withdraw the proposal. This change is just one of the latest revisions implemented by the DOH in an attempt to strengthen and expand New York’s struggling Medical Marijuana Program.

This blog post is the last in a series of articles discussing the current state of the law in New York regarding medical marijuana. To read the previous post in the series, Medical Marijuana 105: Marijuana in the Workplace, click here.

Despite its potential, New York’s Medical Marijuana Program is off to a slow start. The Program’s struggle is mostly due to the fact that it is one of the most restrictive medical marijuana programs in the country. For example, medical marijuana offerings are limited to mostly liquids, oils and capsules and only state-certified marijuana patients are allowed to enter the limited number of dispensaries. In September 2017, the NYS Department of Health (“DOH”) announced that it would be issuing new regulations in an effort to bolster the Program. Under the new regulations, patients certified for medical marijuana use will have access to more types of products including lotions, tablets, lozenges, patches and more. In addition, prospective patients and practitioners interested in the medical marijuana program will be able to enter a dispensing facility to speak directly with representatives of registered organizations, learn about products, and get information about the medical marijuana program. The regulations will also allow doctors to take a shorter, two-hour program to become eligible to certify patients for medical marijuana use as opposed to the four-hour program that was originally required.

Since the Program’s inception the DOH has also attempted to expand the reach of the Program by adding new qualifying conditions for medical marijuana use. The addition of chronic pain as a qualifying condition, for example, led to a surge of patients seeking to become certified for medical marijuana use. The DOH announced in August 2017 that the number of certified patients increased by 10,744 (72%) since the addition of chronic pain in late March of this year.

Most recently efforts have been made to allow medical marijuana to be used to treat post-traumatic stress disorder (“PTSD”). Veterans groups in particular have urged Governor Cuomo to allow those with PTSD to use medical marijuana. According to the Department of Veterans Affairs, about eight million adults suffer from PTSD in any given year, including tens of thousands of Afghanistan and Iraq veterans. Somewhere between 11% and 20% of those vets will suffer from it each year. Over 23 states allow medical marijuana use to treat PTSD, including Connecticut, New Jersey and Pennsylvania. It seems likely, especially given New York’s penchant for growing the Program, that Governor Cuomo will pass the bill adding PTSD as a qualifying condition for medical marijuana use.

The DOH is hoping that all of these changes will bolster the Program. That would be welcome news to New York’s registered organizations which are authorized to manufacture and dispense of medical marijuana in New York State. You may recall from our previous article in this series that on August 1, 2017, the DOH announced the licensure of five new companies to act as registered organizations. In April 2017, however, knowing that the DOH was planning to take such action, the New York Medical Cannabis Industry Association sued New York State on behalf of New York’s original registered organizations. The lawsuit aims to stop the DOH from issuing the new licenses and alleges that increasing the number of registered organizations from five to ten will harm the industry because there is not enough demand to meet supply. “The program is still in its infancy, and patient demand is currently too low to support an expansion of the supply market for medical marijuana,” the lawsuit states. “As it is, all five of [the original registered organizations] are sustaining tremendous operating losses, after having made millions of dollars in initial investments.” The five newly-awarded registered organizations filed a motion to dismiss the lawsuit but the Court denied the motion last week. We will continue to monitor the litigation and post updates to the New York Health Law Blog as developments occur.

Thank you for being a part of this series discussing the current state of the law in New York regarding medical marijuana. The medical marijuana field is constantly changing as the program in New York grows and evolves. To stay up to date on all of the developments we invite you to subscribe to the Farrell Fritz New York Health Law Blog.

This blog post is the fifth in a series of articles discussing the current state of the law in New York regarding medical marijuana. To read the latest post in the series, Medical Marijuana 104: Responsibilities of Health Insurers, click here.

As you may recall from our first post in this series, medical marijuana in New York was legalized through the passage of the New York Compassionate Care Act (“CCA”) in 2014. The CCA also created new anti-discrimination protections for medical marijuana users. Namely, the CCA provides that patients who are certified for medical marijuana use shall not be subject to “disciplinary action by a business” for exercising their rights to use medical marijuana. The CCA further provides that being a certified patient is the equivalent of having a disability for purposes of the New York State Human Rights Law (“NYSHRL”).

Together the CCA and NYSHRL provide that New York employers with four or more employees are prohibited from terminating or refusing to employ an individual on the basis of his/her status as a certified medical marijuana patient. In addition, employers must provide reasonable accommodations to certified patients as a result of his or her disability. Accordingly, an employer may be subject to a discrimination claim if it fires or disciplines an employee for lawfully consuming marijuana under the CCA.

The CCA does contain two exceptions to the above general rules. First, the CCA does “not bar the enforcement of [an employer’s] policy prohibiting an employee from performing his or her employment duties while impaired by a controlled substance.” Second, the Act does “not require any person or entity to do any act that would put the person or entity in violation of federal law or cause it to lose a federal contract or funding.”

The Americans with Disabilities Act (“ADA”), which became law in 1990, is a civil rights law that prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. The purpose of the law is to make sure that people with disabilities have the same rights and opportunities as everyone else.

Marijuana in any form and for any use is illegal at the federal level under the Controlled Substances Act (“CSA”). The ADA provides that a person’s illegal use of drugs is grounds for denying employment or firing from employment. The ADA defines “illegal use of drugs” as follows: “the use of drugs, the possession or distribution of which is unlawful under the Controlled Substances Act. Such term does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law.”

For the most parts court have, to date, agreed that, because the CSA does not allow medicinal use of marijuana, a medical professional cannot legally, as a matter of federal law, supervise medical marijuana use so as to bring an employee under the ADA’s protection. See, e.g., James v. City of Costa Mesa, 2010 U.S. Dist. LEXIS 53009, at *8-11 (C.D. Cal. Apr. 30, 2010); Barber v. Gonzales, 2005 U.S. Dist. LEXIS 37411, at *2-5 (E.D. Wash. July 1, 2005); Johnson v. Columbia Falls Aluminum Co., 2009 WL 865308, at *4 (Mont. Mar. 31, 2009).

Case law in this area is developing and uncertainty remains as state laws clash with federal requirements.

In 2015, for example, the Colorado Supreme Court unanimously held that employers may still terminate employees who use medical marijuana – even though medical marijuana use is specifically authorized by the Colorado Constitution and Colorado law protects employees’ lawful off-duty conduct.  The Court held that marijuana use (whether for medicinal or recreational use) remains unlawful under federal law and therefore medical marijuana use cannot be deemed “lawful” under the state’s off-duty conduct law.

On the other hand, the Massachusetts Supreme Judicial Court provided that the plaintiff, a patient who qualified for the medical use of marijuana and had been terminated from her employment because she tested positive for marijuana, could seek a civil remedy against her employer through claims of handicap discrimination in violation of Massachusetts laws.

Similarly, the Superior Court of Rhode Island in 2017 held that an employer’s enforcement of its neutral drug testing policy to deny employment to an applicant because she held a medical marijuana card violated the anti-discrimination provisions of the state medical marijuana law.

In New York, the Taxi & Limousine Commission (“TLC”) filed a petition seeking the revocation of the respondent taxi driver’s TLC Driver License because the driver tested positive for marijuana. New York City’s Office of Administrative Trials & Hearings (“OATH”) disagreed and recommended that the petition be dismissed, finding that revocation solely because of the driver’s status as a certified medical marijuana patient would violate New York City and State laws.  The TLC adopted the OATH decision.

In our next post we’re going to continue our review of important parties that play a role in the medical marijuana industry. To be sure not to miss the article when it comes out we invite you to subscribe to the Farrell Fritz New York Health Law Blog.

This blog post is the fourth in a series of articles discussing the current state of the law in New York regarding medical marijuana. To read the latest post in the series, Medical Marijuana 103: Patient and Practitioner Regulations in New York State, click here.

It will come as no surprise that patients who are thinking about getting certified for medical marijuana use have a number of questions relating to the cost of obtaining medical marijuana products.

Prices for medical marijuana products vary amongst the various registered organizations. In order to determine how much to charge for its products registered organizations must first submit to the NYS Department of Health (“DOH”) their costs to manufacture, market and distribute the products. The DOH then determines the reasonableness of the registered organization’s proposed prices and, if appropriate, approves them as the maximum price per dose each registered organization may charge.

The prices approved by the DOH remain in effect for the entire period of the registered organization’s registration, however registered organizations may charge less than the approved prices if they wish. Registered organizations may also request a price modification from the DOH either at the conclusion of the first year of their registration period or beforehand based on documented exceptional circumstances.

Health insurers doing business in New York State do not provide coverage on account of an insured’s purchase of medical marijuana products. The main reason for this restriction is that medical marijuana is still a banned substance at the federal level and therefore medical marijuana is not an FDA-approved prescription medication. The Compassionate Care Act does not provide for a discounted medical marijuana pricing program for certified patients who are unable to afford medical marijuana products. As stated above, however, registered organizations may price their products for amounts less than those approved by the DOH so in some cases registered organizations may offer reduced prices to qualifying certified patients.

After the Medical Marijuana Program launched there was much debate as to whether health insurers are required to provide coverage on account of office visits that result in a patient becoming certified for medical marijuana use. On April 12, 2017, the New York State Department of Financial Services issued a statement to clarify the situations in which health insurers must provide coverage for office visits that result in medical marijuana certification.

The guidance starts with a reminder that under New York Public Health Law Section 3362(1) “[t]he possession, acquisition, use, delivery, transfer, transportation, or administration of medical marijuana by a certified patient or designated caregiver possessing a valid registry identification card, for certified medical use” is lawful subject to certain restrictions and conditions.

The Department’s statement then provides that if office visits are covered under the insurance policy or contract, and the insured receives services during an office visit that are covered under the insurance policy or contract, the issuer may not deny coverage for the office visit solely on the basis that the visit also resulted in the insured receiving a medical marijuana certification. In other words, insurers must provide coverage for office visits, even if they result in medical marijuana certification for the patient. There is an exception to this general rule, however, Coverage is not required for office visits undertaken solely to obtain a medical marijuana certification.

In our next post we’re going to continue our review of important parties that play a role in the medical marijuana industry by focusing on the workplace and the rights that employers and employees have when it comes to medical marijuana use. To be sure not to miss the article when it comes out we invite you to subscribe to the Farrell Fritz New York Health Law Blog.