Executive Summary: Rejecting Freehold Township’s claim the entire case was barred by the federal Controlled Substances Act (CSA), a workers’ compensation judge ruled the municipality must reimburse its employee for the cost of medical marijuana to treat his work-related injury. This contrasts with a recent decision from Maine’s highest court, which held that compliance with an administrative order compelling an employer to subsidize an employee’s use of medical marijuana constitutes aiding and abetting, which is a violation of the CSA.

Analysis: On June 28, 2018, Workers’ Compensation Judge Lionel Simon heard an application by Steven McNeary asking the court to compel Freehold to reimburse him for his medical marijuana purchases. Though McNeary met all criteria to obtain and use medical marijuana under New Jersey’s Compassionate Use Medical Marijuana Act (CUMMA), Freehold refused, claiming it would be violating federal law if forced to pay for McNeary’s use of a controlled substance. Judge Simon rejected that argument, finding no conflict between the CSA (designed “to curtail the use and distribution of illicit narcotics for the purposes of the overall general public health”) and the CUMMA (which promotes a “safer, less addictive” treatment for pain).

Judge Simon considered and distinguished Bourgoin v. Twin Rivers Paper Co., LLC, 2018 ME 77 (2018). There, the appellate court affirmed a workers’ compensation order requiring Twin Rivers to reimburse Bourgoin for the cost of medical marijuana as permitted by Maine’s state medical marijuana statute. Maine’s Supreme Court reversed, holding if Twin Rivers complied with that court order, it would engage in criminal “aiding and abetting” conduct under the CSA by knowingly subsidizing Bourgoin’s purchase of marijuana. Judge Simon addressed that argument head on and found it inapplicable: “Certainly I don’t understand how [an insurance] carrier, who will never possess, never distribute, never intend to distribute these products, who will [merely] sign a check into an attorney’s trust account is in any way complicit with the distribution of illicit narcotics.”

Recognizing the absence of New Jersey precedent on this issue, the court welcomed review from a higher New Jersey court.

Employers’ Bottom Line: Whether an employer must pay for an employee’s acquisition and use of marijuana—conduct permitted by New Jersey law but outlawed by the CSA—is a far from settled question. Compliance with both the CSA and CUMMA is possible in the workers’ compensation context because reimbursement to an injured employee does not require the employer to manufacture, distribute, dispense, or possess marijuana. Likewise, an employer is hardly committing an offense against the federal government by reimbursing an employee for valid medical expenses under a valid workers’ compensation order, especially given the strong presumption against preemption in the area of workers’ compensation—a domain traditionally regulated under New Jersey’s own police power. Yet until a higher court has addressed this novel issue, employers should exercise caution when faced with a request for reimbursement of medical marijuana.