sam - marijuana and the workplace

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Is Legal Marijuana the Next Big Tobacco?

Implications for Employers and Workplace Health

June 2016

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

1

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

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SAM brings nationwide reach and media impact to the table

HIAK

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:

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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-ChairImmediate Past President, American Society of Addiction Medicine

• Kean McAdam, Secretary

• Danielle Forsgren, TreasurerTelevision host and spokesperson

• Steven MilletteExecutive Director, Center for Dependency, Addiction and Rehabilitation (CeDAR), University of Colorado Hospital

• Howard C. SamuelsFounder, The Hills Treatment Center

• David GeorgeHealthcare Solutions, CEO; President, AdvancePCSEVP, 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 PresidentFormer 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 FrumSenior 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





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

0

50

100

150

$200M

0

10

20

30

40

50

60

70

80

90

100%

1970 1980 1990 2000 2010 2013

Popular support for legalization (%)Dollars invested in legalization (millions)

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

0

2

4

6

8

10%

2002

6.2%

2003

6.2%

2004

6.1%

2005

6.0%

2006

6.0%

2007

5.8%

2008

6.1%

2009

6.7%

2010

6.9%

2011

7.0%

2012

7.3%

2013

7.5%

2014

8.4%

“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

0

5

10

15%

U.S. average

7.1%7.4%8.0%

Colorado

10.4%

12.7%

14.9%

Washington

10.2%

12.3%12.8%

5.7% 19.8% 11.9%Avg. change per period

2011-20122012-20132013-2014

Percentage of population ages 12 and up who used marijuana in the past month

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0

5

10

15%

U.S. average

7.6%7.2%7.2%

Colorado

10.5%11.2%

12.6%

Washington

9.5%9.8%10.1%

-2.2% 9.5% 3.2%Avg. change per period

2011-20122012-20132013-2014

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)

0 5 10 15%South Dakota 4.8%

Iowa 5.0%Tennessee 5.5%

Alabama 5.6%Utah 5.6%

North Dakota 5.8%Nebraska 5.8%

Mississippi 5.9%Texas 5.9%

Louisiana 6.1%Oklahoma 6.2%

New Jersey 6.3%West Virginia 6.3%

Wyoming 6.3%Idaho 6.3%

Kansas 6.3%Wisconsin 6.5%

South Carolina 6.6%Arkansas 6.7%

North Carolina 6.7%Kentucky 6.8%

Virginia 6.9%Ohio 6.9%

Minnesota 7.3%Pennsylvania 7.3%

Indiana 7.5%Florida 7.6%Illinois 7.6%

Georgia 7.8%Nevada 7.8%Hawaii 7.9%

Missouri 8.0%Delaware 8.2%

Connecticut 8.5%New York 8.5%Maryland 8.6%

Arizona 8.8%California 9.2%

New Mexico 9.6%Montana 10.0%Michigan 10.2%

New Hampshire 11.5%Massachusetts 11.8%

Alaska 11.9%Oregon 12.4%

District of Columbia 12.6%Maine 12.7%

Rhode Island 12.8%Washington 12.8%

Vermont 13.2%Colorado 14.9%

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)

0 5 10 15%Alabama 5.0%

Iowa 5.2%South Dakota 5.3%

Utah 5.4%Oklahoma 5.5%Nebraska 5.5%Louisiana 5.6%

North Dakota 5.6%West Virginia 5.6%

Mississippi 5.6%Kentucky 5.6%

Tennessee 5.7%Kansas 5.8%Virginia 5.9%

Ohio 6.0%Georgia 6.1%

Texas 6.1%South Carolina 6.2%

Wyoming 6.2%Arkansas 6.2%

New Jersey 6.4%Idaho 6.4%

Missouri 6.4%North Carolina 6.5%

Indiana 6.5%Minnesota 6.7%

Illinois 6.7%Pennsylvania 7.0%

Wisconsin 7.2%Florida 7.5%Hawaii 7.7%

New York 7.8%Connecticut 7.9%

Nevada 8.0%New Mexico 8.0%

Maryland 8.1%Michigan 8.1%Delaware 8.2%Montana 8.3%Arizona 8.3%

California 8.7%Massachusetts 8.9%

Alaska 9.2%New Hampshire 9.8%

Maine 9.9%Washington 10.1%

Oregon 10.2%District of Columbia 10.6%

Rhode Island 10.7%Vermont 11.4%Colorado 12.6%

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 useSource: NSDUH (2013-2014)

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Marijuana has also become significantly more potent since the 1960s

Source: Mehmedic et al., 2010

0.0

2.5

5.0

7.5

10.0

12.5%

THC

1960 1970 1978 1983 1985 1990 1993 1996 1998 2000 2002 2004 2006 2008 2010

Average THC and CBD levels in the United States

CBD

1965 1974 1980 1984 1986 1992 1995 1997 1999 2001 2003 2005 2007 2009 2011

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 NORML15 June 2015Note: 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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Agenda

• Who we are





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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0

5

10

15

20

25

30

35%

Estimated Prevalence of Dependence Among Users

Marijuana

9

17

Alcohol

1517

Cocaine

17

25

Stimulant

11

24

Analgesics

8 8

Psychadelics

5

9

Heroin

23

20

Adult Adolescent

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

0.0

2.5

5.0

7.5

10.0

12.5%

THC

1960 1970 1978 1983 1985 1990 1993 1996 1998 2000 2002 2004 2006 2008 2010

Average THC and CBD levels in the United States

CBD

1965 1974 1980 1984 1986 1992 1995 1997 1999 2001 2003 2005 2007 2009 2011

CBD:NON-

Psychoactive Ingredient

THC:Psychoactive

Ingredient

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“Safer than alcohol?” Not exactly…

Source: Jonathan Caulkins (using NSDUH data)

0

2x

3x

4xRelative frequency of problem

Needed to use more to get

desired effect

Caused serious

problems at home, work, or

school

Caused problems with

emotions, nerves, or

mental health

Using same amount had less effect

1x (just as likely)

Spent a lot of time

getting/using drug

Took time from school/work/important

activities

Tried to limit use but failed

Tried to cut down but

failed

Caused problems with

family or friends

Drug put you in physical

danger

Marijuana usersDrinkers (alcohol)

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Health & Wellness

Employee health & wellness


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)

0

10

20

30

Cases of schizophrenia per 1,000 people

0

5

1

4

2

5

10

11

< 50

15

> 50

28

Number of times cannabis used (lifetime)Study of Swedish Conscripts (n=45570)

MORE CANNABIS USE CORRELATES WITH HIGHER RATES OF SCHIZOPHRENIA

0

1

2

3

4

5X

Risk multiple for schizophrenia- like psychosis at age 26

By 15 years

4.5

By 18 years

1.6

Year of first useLongitudinal prospective Dunedin study

(n=1037)

EARLIER AGE OF USE CORRELATES WITH

INCREASED SCHIZOPHRENIA RISK

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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

-0.8

-0.6

-0.4

-0.2

0.0

0.2

Change in full-scale IQ (standard deviation units)

n=17

n=57

n=12

n=21

n=23

n=14

Cannabis dependent before age 18

Not cannabis dependent before age 18

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

0 20 40 60%

% welfare dependent (ages

21-25)57%

41%42%

25%23%

25%

% unemployed (ages 21-25)

52%41%

42%25%

23%21%

% gained university degree

(by age 25)2%

9%11%

19%27%

36%

400+300 to 399200 to 299100 to 1991 to 99Never

New Zealand study showing relationship between marijuana use and social outcomes

31 ©

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)

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Health & Wellness

Employee productivity


Productivity

Dependency &

Addiction

Safety

1

2

3

4

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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)

100 150 200%

Absenteeism178%

100%

Disciplinary problems

155%

100%

Marijuana usersControl group (tested negative for pot use)

34©

And pot users miss work more often because they “just [don’t] want to be there”

Source: National Survey on Drug Use and Health

Percentage of people who missed work during the past 30 days “because you just didn’t want to be

there?”

0

5

10

15%

Overall population

7.4%

Alcohol users

7.9%

Marijuana users

15.0%

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Health & Wellness

Workplace safety


Productivity

Dependency &

Addiction

Safety

1

2

3

4

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)

100 150 200%

Injuries185%

100%

Industrial accidents

155%

100%

Marijuana usersControl group (tested negative for pot use)

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Workplace marijuana use is rising across the board, and especially in CO and WA

Source: Quest Diagnostics

0

1

2

3%

Positivity rate for workplace MJ urine tests

Nat'l average (safety-sensitive)

0.6%0.7%0.7%

Nat'l average (combined)

1.6%1.7%1.9%

Colorado

1.9%

2.3%

2.6%

Washington

1.9%

2.4%

2.8%

6.2% 9.0% 16.9% 19.2%CAGR

201220132014

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Another 2014 survey showed

that 10% of Americans admit to having gone to work stoned

Source: Mashable survey (2014)

http://mashable.com/2014/09/17/going-to-work-high/#suJHcoffPgqx

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Marijuana-related traffic fatalities in Washington State doubled after legalization

Source: AAA (2016)

0

5

10

15

20%

2010

8.6%

2011

7.9%

2012

8.1%

2013

8.3%

2014

17.0%

WA traffic fatalities where driver tested positive for marijuana

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)

0

5

10

15

20%

2006

6.9%

2007

7.0%

2008

7.8%

2009

10.1%

2010

10.9%

2011

14.1%

2012

16.5%

2013

14.8%

2014

19.3%

CO traffic fatalities where driver tested positive for marijuana

Legalization

Retail sales begin

Commercialization of “medical” marijuana

14% average annual increase since 2009

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Agenda

• Who we are





2

3

1

4

5

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Higher costs for employers

A BMore pot use

means higher

costs for employers

More pot users mean a

less desirable

hiring pool

43©

Accidents, injuries, absenteeism, and disciplinary problems among pot users all increase costs

Source: Zwerling et al (1990)

0

100

150

200%

Industrial accidents

100%

155%

Disciplinary problems

100%

155%

Absenteeism

100%

178%

Injuries

100%

185%

Incidence of problem compared to control group

Control group (tested negative for pot use)

Pot users

44©

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

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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

0

1

2

3

4

5

up to $3K

4.5

$3K to $5K

1.6

$5K to $10K

1.2

> $10K

1.1

Direct cost of injury

Indirect costs as mulitple of direct costs

$38,000Estimated

average direct costs of worker’s

compensation claim

46 ©

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

MassachusettsMarch 2016

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Discrimination claims have become a problem in states with medical marijuana laws


“[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?”

48©

Recent state court decisions have forced companies to pay for employees’ marijuana use


• 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)

49©

More injuries & absenteeism could cost the U.S. economy $67B by 2024—for FT employees alone

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.

0

20

40

60

$80B

2014

27

11

$37B

29

11

$40B

2016E

30

12

$42B

32

13

$45B

2018E

34

13

$47B

36

14

$50B

2020E

38

15

$53B

41

16

$56B

2022E

43

17

$60B

46

18

$63B

2024E

48

19

$67B

Additional potential costs to employers due to marijuana use by full-time employees

2015E 2017E 2019E 2021E 2023E

Absenteeism

Workers' comp

…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 use pot at the

rate…

$78.8B

$264.6B…for full-time

employees alone

50©

Less desirable hiring pool

A BMore pot use

means higher

costs for employers

More pot users mean a

less desirable

hiring pool

51©

Revisiting the issue of increased use in the workplace

Source: Quest Diagnostics

0

1

2

3%

Positivity rate for workplace MJ urine tests

Nat'l average (safety-sensitive)

0.6%0.7%0.7%

Nat'l average (combined)

1.6%1.7%1.9%

Colorado

1.9%

2.3%

2.6%

Washington

1.9%

2.4%

2.8%

6.2% 9.0% 16.9% 19.2%CAGR

201220132014

52©

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.”

http://gazette.com/drug-use-a-problem-for-employers/article/1548427

54©

In Colorado, drug testing of employees has intensified since legalization

Source: Mountain States Employers Council (2015 survey of 344 companies)

0

20

40

60

80

100%

Tightened

Maintained

Loosened

Since Colorado legalized marijuana, have you tightened, maintained, or loosened your drug-

testing policies?

55©

This trend also appears nationally—employers tighten policies where recreational pot is legal

Source: SHRM survey (2015)

0

20

40

60

80

100%

States w/ medical use only

73%

22%

4%

States w/ medical & recreational use

82%

11%

5%1% 2%

Use not permitted for any reasonExceptions for MED useAllow both MED & REC useOther

57©

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)

58©

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

59©

Food for thought


• 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


[email protected] Zinsmeister

mailto:[email protected]

sam - marijuana and the workplace

Health & Medicine