When Gov. Tom Wolf legalized medical marijuana, Pennsylvania became the 24th state to legalize the use of medical marijuana despite the direct conﬂict with marijuana’s classiﬁcation as a controlled substance under federal law. By way of history, on Sunday, April 17, 2016, Wolf signed the Pennsylvania Medical Marijuana Act (hereinafter MMA) enacting a sweeping change in the commonwealth, legalizing the use of medical marijuana per the parameters of the MMA, despite the ongoing prohibition of same under federal law.
The MMA has been, historically, in direct contradiction to the Controlled Substance, Drug, Device and Cosmetic Act, which classiﬁes cannabis as a Schedule I substance, and criminalizes the cultivation, distribution and possession of cannabis, even for valid medical treatment. The MMA speciﬁcally acknowledges the conﬂict between its establishment of the Pennsylvania program through which patients suﬀering from certain serious medical conditions can obtain medical marijuana and the crimes established by federal law: “If a provision of the Controlled Substance, Drug, Device and Cosmetic Act relating to marijuana conﬂicts with a provision of this act, this act shall take precedence.”
At ﬁrst glance, this provision appears to resolve ambiguity as to the interplay of these two statutes, but the impact of federal law on state permitted medical marijuana remains unsettled. Over the last few months, federal and state developments have further muddled the legal landscape.
Most recently, in Fegley v. Firestone Tire & Rubber (Workers’ Compensation Appeal Board), (Pa. Cmwlth. Ct.. March 17, 2023), a Pennsylvania court addressed insurers’ reimbursement of medical marijuana expenses in workers’ compensation cases. After ﬁnding that workers’ compensation carriers were “insurers” for the purposes of the MMA, and that medical marijuana treatment may be “reasonable and necessary,” the court went on to consider the interplay between the MMA and the Federal Controlled Substances Act. Section 841(a) of the Controlled Substances Act provides that it is “unlawful for any person knowingly of intentionally … to manufacture, distribute, or dispense … a controlled substance.” At the same time, Section 2103 of the MMA mandates that nothing in the MMA “shall require an employer to commit any act that would put the employer or any person acting on its behalf in violation of federal law.”
The court closely examined the language of both statutes and concluded that federal law did not expressly prohibit the reimbursement of out-of-pocket expenses for medical marijuana. Reimbursement of out-of-pocket expenses for medical marijuana would not cause an employer’s workers’ compensation carrier to violate federal law because such reimbursement is not the manufacturing, distribution, or dispensing of medical marijuana.
In 2021, the New Jersey Supreme Court came to the same conclusion. Hager v. M & K Construction, 246 N.J. 1 (2021) stemmed from an employer’s refusal to reimburse an employee for medical marijuana expenses. The employer argued that it would be committing a federal crime if it were to reimburse an employee for medical marijuana expenses; reimbursement would be aiding and abetting a violation of the Federal Controlled Substances Act. The court ruled that “reimbursement” is not aiding and abetting a violation of federal law because to aid and abet a violation of law, according to the U.S. Court of Appeals for the Third Circuit, a defendant must have “knowingly elected to aid in the commission of the oﬀense.” Where an employer is required by a court to reimburse expenses, it is not electing to aid in a violation of law.
In its discussion, the Hager court analyzed the federal government’s evolving stance on enforcement of marijuana related crimes. It pointed out that over the last decade, the Department of Justice has deprioritized the prosecution of “marijuana activities that are legal under state law.” Moreover, in the federal Appropriations Act passed most recently before the Hager case was decided, Congress prohibited the Department of Justice from using funds to prevent states of implementing their medical marijuana laws. The Hager court asserted that defunding the prosecution of crimes demonstrates a legislative intent to suspend earlier statutes. There is no conﬂict between federal and state law in the context of medical marijuana because Congress, by restricting funding, intended to suspend the limitations on medical marijuana in states where it has been legalized. In Fegley, the Pennsylvania court noted the Appropriations Act’s funding restrictions but did not as clearly set forth its reliance on legislative intent in coming to the same conclusion.
In the two years since the Hager court relied upon the federal Appropriations Act to determine legislative intent, Congress has continued to limit funding in the same way. In fact, since 2015, Appropriations Acts have contained language similar to that included in the most recent, Consolidated Appropriations Act, 2023, which reads:
None of the funds made available under this act to the Department of Justice may be used, with respect to any of the states [that have legalized medical marijuana] to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.
Recently, the federal government extended its foray into medical marijuana legislation beyond restricting funds. The Medical Marijuana and Cannabidiol Research Expansion Act (hereinafter “MMCREA”), the ﬁrst standalone federal marijuana reform legislation, was signed into law by President Joe Biden on Dec. 2, 2022.
Aiming to facilitate research of cannabis and its potential health beneﬁts, it establishes a new registration process for researching marijuana and its derivatives. Entities registered by the Drug Enforcement Administration are permitted to manufacture, distribute, dispense, and possess marijuana for the purpose of medical research. Additionally, the MMCREA allows for the import and export of marijuana for research purposes and removes the federal prohibition on doctors discussing the harms and beneﬁts of using cannabis and cannabis derivatives.
It is certainly possible that, following the reasoning of the Hager and Fegley courts, a state court faced with medical marijuana related questions will rely on the MMCREA to determine that the federal government has moved beyond restricting funding to actively encouraging states in the expansion of medical marijuana use. That same logic, however, may lead to the opposite conclusion when applied to interpreting congressional intent. Several proposed laws that would clearly demonstrate Congress’ intent to remove prohibitions surrounding marijuana have not gathered enough votes to pass over the last few congressional sessions.
The proposed SAFE Banking Act (hereinafter SAFE) and Cannabis Administration & Opportunity Act (hereinafter CAOA) would dramatically change the status of marijuana in the United States. CAOA would legalize cannabis nationwide and expunge the records of some convicted cannabis oﬀenders. It would also establish a framework for a federal cannabis tax and set forth FDA regulations for cannabis products. SAFE would protect ﬁnancial institutions that provide services to legal cannabis businesses, including those that provide medical marijuana. As of this writing, neither of those proposals has become law.
While congressional intent, therefore, seemed to the Hager and Fegley courts indicative of the intention to allow for reimbursement for medical marijuana expenses, further examination of congressional intent may prove it to be less clear. When faced with the ability to actually legalize marijuana, Congress declined. Its refusal to pass either of those laws calls into question the conclusion that Congress intended to suspend the limitations on medical marijuana in states where it has been legalized by restricting funding. The state of medical marijuana is not clariﬁed by relying on congressional intent; it is further muddied.
Reprinted with permission from the May 2023 edition of “Cannabis Law.” © 2023 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or firstname.lastname@example.org.