Legal marijuana is poised to become the next Big Tobacco, and has serious implications for employers' bottom line, employee health, and workplace safety

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Is Legal Marijuana the Next Big Tobacco?
Implications for Employers and Workplace Health
April 2017
Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.

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Executive summary
• Marijuana is addictive and harmful, especially when used frequently
• Marijuana use has been rising steadily as more states legalize,
among the general population and among minors
• Pot’s potency and ease of use has also risen, esp. in legalized states,
making it easier than ever for employees to be impaired on the job
• As a result, workplace impairment is steadily increasing
• This translates into serious and extensive impacts to both
employees and employers, including reduced employee wellness
and increased employer costs
• These impacts can be expected to worsen if legalization continues

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Agenda
• Who we are
• Current landscape and trends
• Impact on employees
• Impact on employers
• Food for thought
2
3
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4
5

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SAM promotes an evidence-based approach to
marijuana policy that prioritizes public health
• SAM takes an evidence-based, scientific
approach to marijuana policy that rejects
the false dichotomy that we must either
lock up marijuana users OR legalize pot
• Instead, we support:
➢ Alternatives to incarceration
➢ FDA-approved medications derived from
marijuana
➢ Ending legalization and commercialization of pot
• We are non-partisan, and work with
Democrats, Republicans, and independents
alike

5. 5©
SAM brings nationwide reach and media impact to
the table
HI
AK
31 state affiliates
across the U.S.
• Non-partisan but high-profile:
founded by former Democratic
Congressman Patrick Kennedy
and leading Republican pundit
David Frum
• Scientific advisory board of 12
leading researchers,
professors, and public
health/legal experts.
• Hundreds of thousands of
press mentions, including
major media outlets such as:

6. 6©
SAM is led and advised by a team of experienced
professionals
BOARD OF DIRECTORS
• Jon Talcott, Chair
Partner and Chair, Securities Practice Group,
Nelson Mullins Riley & Scarborough LLP
• Dr. Stu Gitlow, Vice-Chair
Immediate Past President, American Society of
Addiction Medicine
• Kean McAdam, Secretary
• Danielle Forsgren, Treasurer
Television host and spokesperson
• Steven Millette
Executive Director, Center for Dependency,
Addiction and Rehabilitation (CeDAR), University
of Colorado Hospital
• Howard C. Samuels
Founder, The Hills Treatment Center
• David George
Healthcare Solutions, CEO; President, AdvancePCS
EVP, United Healthcare; President, The Prudential
Healthcare System
EXECUTIVE SUITE
• Dr. Kevin Sabet, President & CEO
Director, University of Florida Drug Policy Institute;
former White House senior advisor, Office of
National Drug Control Policy
• Jeffrey Zinsmeister, Executive Vice President
Former Head of U.S.-Mexico Drug Demand Reduction
& Anti-Corruption Programs, U.S. Department of
State; former Bain & Company consultant
HONORARY ADVISORS
• The Honorable Patrick Kennedy
Former U.S. Representative, Rhode Island; Co-
Founder, One Mind, and Founder, Kennedy Forum
• David Frum
Senior Editor, The Atlantic, speechwriter to President
George H. W. Bush
• Gen. Barry R. McCaffery (Ret.)
Former Director, White House Office of National
Drug Control Policy (ONDCP)

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Prominent scientists and judges guide SAM’s
scientific advisory board
• Dr. Hoover Adger, Johns
Hopkins
• Dr. A Eden Evins, Harvard
• Judge Arthur Burnett,
National Executive Director,
National African American
Drug Policy Coalition
• Dr. Stuart Gitlow, Mt. Sinai
School of Medicine
• Dr. Sion Kim Harris, Harvard
University
• Dr. Sharon Levy, Harvard
University
• Dr. Kimber Richter, University
of Kansas
• Dr. Paula Riggs, University of
Colorado at Denver
• Dr. Howard Samuels, founder,
The Hills Treatment Center
• Dr. Christian Thurstone,
University of Colorado at
Denver
• Dr. Kathryn Wells, University
of Colorado at Denver
• Dr. Krishna Upadhya, Johns
Hopkins

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Agenda
• Who we are
• Current landscape and trends
• Impact on employees
• Impact on employers
• Food for thought
2
3
1
4
5

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Rising support for legalization follows a massive
political spending campaign
Source: SAM analysis; media reports; Pew Research Center; Gallup
Founders of
University of Phoenix
& Progressive
Insurance fund
legalization efforts
NORML
founded
George Soros finances
the Drug Policy
Alliance, and tells
advocates to focus on a
few “winnable” issues
like “medical
marijuana”

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This tide of money has resulted in legalization in a
number of states
HI
AK
Washington,
D.C
Legend:
= “Recreational” use legalized
= “Medical” use legalized
= “Medical” use legalized; 2016 initiative to
legalize “recreational” use
• In California alone,
up to $25 million is
expected to be
spent promoting
the 2016
“recreational”
marijuana initiative

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Marijuana use has been on the rise in the last
decade, since legalization laws became common
“Recreational”
legalization in CO & WA
“Medical” marijuana
legalized in 13 states
Percentage of population ages 12 and up who used
marijuana in the past month
CAGR = 5.5%
Source: NSDUH

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Use in CO and WA are both (A) higher than and (B)
rising faster than the national average
Source: NSDUH state estimates
Percentage of population ages 12 and up who used
marijuana in the past month

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The same trend is seen among minors
Source: NSDUH state estimates
Percentage of population ages 12 to 17 who used
marijuana in the past month

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Nationwide, use rates in states that have legalized
marijuana outstrip those that have not
Source: NSDUH (2013-2014)
Legend:
= “Recreational” use legalized
= “Medical” use legalized
= Neither “medical” nor “recreational” use
legalized
Last-month use, ages 12+

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Youth use rates in states that have legalized
marijuana outstrip those that have not
Source: NSDUH (2013-2014)
Legend:
= “Recreational” use legalized
= “Medical” use legalized
= Neither “medical” nor “recreational” use
legalized
Last-month use, ages 12-17

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Seen from another perspective….
More useLess use
Source: NSDUH (2013-2014)

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Marijuana has also become significantly more
potent since the 1960s
Source: Mehmedic et al., 2010
CBD:
NON-Psychoactive
Ingredient
THC:
Psychoactive
Ingredient

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Pot edibles now account for ~50% of the Colorado
market
Source: Marijuana Business Journal; other media.

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Vaporizing industries: nicotine and marijuana
Pax by Ploom:
• Japan Tobacco International
(JTI) is the fourth-largest
international tobacco company.
• In 2011, JTI bought a portion of
Ploom – a Silicon Valley-based
startup that produces a loose-
leaf vaporizer that can be used to
inhale heated vapor from
marijuana as well as tobacco,
called the Pax.

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The tobacco industry has been interested in the
marijuana market since the late 1960s
Source: USCF
- Philip Morris internal documents, 1968
- British American Tobacco internal documents, 1968

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The marijuana industry has vowed to make
employee rights to pot use a priority
• In 2014, the Colorado Supreme
Court established that
employers can fire employees
for off-the-job marijuana use,
even within the context of a
state medical marijuana
program (Coats v. Dish
Network, LLC, No. 13SC394,
2014 Colo. LEXIS 40 (Colo.
Jan. 27, 2014)
• In response, the marijuana
industry mobilized to fight for
a right for employees to use
pot
“[We should not] permit an employee to be
fired simply because they elect to use
marijuana legally under state law, without a
showing of actual on-job impairment.
…
[T]hat is simply unfair, and it cannot be
allowed to stand.”
- Keith Stroup, founder of NORML
15 June 2015
Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.

22. 22©
Agenda
• Who we are
• Current landscape and trends
• Impact on employees
• Impact on employers
• Food for thought
2
3
1
4
5

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Health &
Wellness
Dependency & addiction
Icons: Marie Van den Broeck; Gregor Črešnar; Oliviu Stoian
Productivity
Dependency
& Addiction
Safety
1
2
3
4

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Marijuana causes dependency in ~9% of all users,
and ~17% when use starts early
Source: Anthony JC, Warner LA, Kessler RC (1994): Comparative epidemiology of dependence on tobacco, alcohol, controlled substances, and inhalants: Basic findings from the National Comorbidity Survey.
Experimental and Clinical Psychopharmacology 2: 244 - 268
Use begins as:

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Moreover, these addiction studies were done
when pot was not nearly as strong as it is today
Source: Mehmedic et al., 2010
1994 study
CBD:
NON-Psychoactive
Ingredient
THC:
Psychoactive
Ingredient

26. 26©
“Safer than alcohol?” Not exactly…
Source: Jonathan Caulkins (using NSDUH data)

27. 27©
Health &
Wellness
Employee health & wellness
Icons: Marie Van den Broeck; Gregor Črešnar; Oliviu Stoian
Productivity
Dependency
& Addiction
Safety
1
2
3
4

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Marijuana use is associated with serious mental
illness, like schizophrenia
Source: Andréasson et al Lancet, 1987 (left graphic); Arseneault et al BMJ 2002 (right graphic)
Study of Swedish Conscripts (n=45570)
MORE CANNABIS USE CORRELATES
WITH HIGHER RATES OF SCHIZOPHRENIA
Longitudinal prospective Dunedin study (n=1037)
EARLIER AGE OF USE CORRELATES WITH
INCREASED SCHIZOPHRENIA RISK

29. 29©
Lower IQ among adolescents—losses of up to 8
points—is correlated with marijuana use
Source: Meier MH et al., PNAS Early Edition 2012
1 Diagnosis 2 Diagnoses 3 Diagnoses
p = .44 p = .09 p = .02
Dunedin prospective study of
1037 subjects born in 1972-73
Subjects were tested for IQ at
age 13 and 38 years of age.
They were also tested for THC
use ages 18, 21, 26, 32 and 38
years of age.

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Marijuana use corresponds with undesirable
social outcomes such as unemployment
Source: Fergusson and Boden. Addiction, 103, pp. 969-976, 2008 [New Zealand study]
# of occasions
using cannabis,
ages 14-21
New Zealand study showing relationship between marijuana use
and social outcomes

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Men who had begun using
marijuana heavily in their late
teens were 40 percent more
likely to die by the time they
reached 60 compared to those
who hadn’t used the drug.
Researchers said this correlation
remained even after they
controlled for confounding
factors such as alcohol use,
mental illness, and social
problems.
Lower life
expectancy
from pot use?
Source: Manrique-Garcia et al. (2016)

32. 32©
Health &
Wellness
Employee productivity
Icons: Marie Van den Broeck; Gregor Črešnar; Oliviu Stoian
Productivity
Dependency
& Addiction
Safety
1
2
3
4

33. 33©
Pot users miss work more frequently and have
more disciplinary problems than their colleagues
Source: Zwerling et al. (1990) (study of 2,537 postal workers; comparison is between those who tested positive for marijuana use and those who did not)

34. 34© Source: National Survey on Drug Use and Health (2014)
40%
more likely to have
missed at least one day
of work in the last
month due to
illness/injury
106%
more likely to have
missed at least one day
of work in the last
month because they
“just didn’t want to be
there”
Even when controlling
for alcohol use, pot
users are:

35. 35©
Health &
Wellness
Workplace safety
Icons: Marie Van den Broeck; Gregor Črešnar; Oliviu Stoian
Productivity
Dependency
& Addiction
Safety
1
2
3
4

36. 36©
Pot users create significantly more safety
problems at the workplace than non-users
Source: Zwerling et al. (1990) (study of 2,537 postal workers; comparison is between those who tested positive for marijuana use and those who did not)

37. 37©
Workplace marijuana use has spiked nationally
since marijuana legalization measures passed
Source: Quest Diagnostics
178%
increase in
four years

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Workplace marijuana use is rising across the
board, and especially in CO and WA
Source: Quest Diagnostics

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Another 2014
survey showed that
10% of Americans
admit to having
gone to work
stoned
Source: Mashable survey (2014)

40. 40©
Marijuana-related traffic fatalities in Washington
State doubled after legalization
Source: AAA (2016)
Legalization Retail sales begin
106%
increase in
one year

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In almost one of every five traffic fatalities in CO,
the driver has been using marijuana
Source: Rocky Mountain HIDTA (Sep. 2015)
Legalization Retail sales beginCommercialization of “medical” marijuana
14% average annual
increase since 2009

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Agenda
• Who we are
• Current landscape and trends
• Impact on employees
• Impact on employers
• Food for thought
2
3
1
4
5

43. 43©
Higher costs for employers
A B
More pot use
means higher
costs for
employers
More pot users
mean a less
desirable
hiring pool

44. 44©
Accidents, injuries, absenteeism, and disciplinary
problems among pot users all increase costs
Source: Zwerling et al (1990)

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And pot users miss work more often because they
“just [don’t] want to be there”
Source: National Survey on Drug Use and Health (2014)
Percentage of people who missed work during the past 30
days “because you just didn’t want to be there?”

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One pot-using employee could cost an employer
thousands of dollars/year in absenteeism alone
Source: SAM analysis – Icon: Björn Andersson
• Additional absenteeism due
to marijuana use may cost
employers up to…
• $3,260/year for each full-
time hourly employee
• $2,407/year for each full-
time salaried employee

47. 47©
The average costs to an employer for the average
workplace injury can exceed $40,000
Source: Left-hand chart National Safety Council: ; right-hand chart, OSHA
$38,000
Estimated
average direct
costs of worker’s
compensation
claim

48. 48 ©
Marijuana use can
imperil favorable
workers’ comp
rates
“Favorable workers'
compensation rates are
substantiated by testing
employees for drugs, and
employers could lose
access to those rates if
workers are legally using
marijuana on their personal
time.”
- Associated Industries of
Massachusetts
March 2016

49. 49©
Discrimination claims have become a problem in
states with medical marijuana laws
Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.
“[T]here’s a risk for employers that retain strict marijuana
bans: They may land in the tangle of disabilities laws….
Some employers are stumbling into disability lawsuits
because they haven’t trained their managers to effectively
field unexpected discussions about marijuana use…. A
common scenario involves a potential employee who says
in an interview: “Just so you know, I have glaucoma and
every once in a while I have to self-medicate with marijuana.
You’ll accommodate that, right?”
- Todd R. Wulffson
Carothers DiSante & Freudenberger LLP

50. 50©
Recent state court decisions have forced
companies to pay for employees’ marijuana use
Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.
• New Mexico: a series of appellate
court decisions require companies
to reimburse employees’ for
“medical” marijuana use, ignoring
employers’ arguments that doing
so would violate federal law:
• Vialpando v. Ben’s Automotive
Services, 331 P.3d 975, cert.
denied, 331 P.3d 924 (2014)
• Maez v. Riley Industrial, 347 P.3d
732 (2015)
• Lewis v. American General Media,
2015 N.M. App. LEXIS 74 (June 26,
2015)

51. 51©
More injuries & absenteeism could cost the U.S.
economy $67B by 2024 for FT employees
Source: SAM analysis – Icons: Ed Harrison; AIGA Collection. Note: current smoking rates are those of “current smokers” that smoke
every day or “some days.” Current drinking rate is based on people who drink at least once/month.
…that they
use tobacco
now, the cost
could be up
to:
…that they
use alcohol
now, the cost
could be up
to:
And if, in 2024,
people used pot
at the rate…
$78.8B
$264.6B

52. 52©
Less desirable hiring pool
A B
More pot use
means higher
costs for
employers
More pot users
mean a less
desirable
hiring pool

53. 53©
Revisiting the issue of increased use in the
workplace
Source: Quest Diagnostics

54. 54©
Drug use is forcing CO employers to hire out-of-
state employees
Source: The Gazette, March 24, 2015 (http://gazette.com/drug-use-a-problem-for-employers/article/1548427)
• “Jim Johnson
[construction company GE
Johnson’s CEO]...said his
company has encountered
so many job candidates
who have failed pre-
employment drug tests
because of their THC use
that it is actively
recruiting construction
workers from other
states.”

55. 55©
The problem has spread nationwide, and recently
received coverage in the New York Times

56. 56©
In Colorado, drug testing of employees has
intensified since legalization
Source: Mountain States Employers Council (2015 survey of 344 companies)
Since Colorado legalized marijuana, have you tightened,
maintained, or loosened your drug-testing policies?

57. 57©
This trend also appears nationally—employers
tighten policies where recreational pot is legal
Source: SHRM survey (2015)

58. 58©
Agenda
• Who we are
• Current landscape and trends
• Impact on employees
• Impact on employers
• Food for thought
2
3
1
4
5

59. 59©
What’s in store for 2016
• Special protections for employees that use pot (e.g.,
Arizona, Maine, U.S. Virgin Islands)
• Weaker stoned driving laws (e.g., Arizona, U.S. Virgin
Islands)
• Restrictions on landlords’ abilities to ban marijuana use on
their private property (e.g., Maine)
• Packing regulatory boards with pot industry
representatives (e.g., California, Arizona, Massachusetts,
U.S. Virgin Islands)

60. 60©
The bottom line
• This is about creating the next Big Tobacco
• Marijuana legalization will have a very negative impact on
workplace safety and businesses’ bottom line
• Bad for our youth, bad for our workforce, and bad for our
country

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Food for thought
Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.
• How will marijuana legalization affect:
• Your business’ bottom line?
• Your employees’ wellness and health?
• Your ability to hire and maintain a safe workforce?
• How should your company respond?
• Review drug policies, and vet them carefully with legal counsel
• Don’t assume that a written drug policy will protect you from
lawsuits without proper implementation
• Follow these legal and political trends (especially important for
large companies with a multi-state presence)
• If you have concerns, register them
• Consider how you will account for increased marijuana use’s
impact in your company’s bottom line

62. Note: This presentation is not intended to provide legal advice of any kind. For legal advice, please contact a lawyer in the appropriate jurisdiction.
jeff@learnaboutsam.org
Jeff Zinsmeister