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April 2021

New Jersey Supreme Court Compels Employer to Reimburse Employee for Medical Marijuana Expenses

On April 13, 2021, in Vincent Hager v. M&K Construction, the New Jersey Supreme Court upheld an Appellate Division decision affirming a workers’ compensation order directing the plaintiff’s former employer, M&K Construction (“M&K”), to reimburse him for the continuing costs of medical marijuana prescribed pursuant to New Jersey’s Jake Honig Compassionate Use Medical Cannabis Act (“CUMCA”) to treat his chronic pain resulting from a work-related accident.

On appeal, M&K argued that CUMCA was preempted by the federal Controlled Substances Act (whereby marijuana remains illegal), and that, as a result, M&K’s compliance with the workers’ compensation order would expose it to possible federal criminal liability for aiding and abetting a violation of federal law. M&K further asserted that medical marijuana could not be reimbursed as a “reasonable and necessary treatment” under the New Jersey Workers’ Compensation Act. Moreover, M&K argued that, because M&K was a workers’ compensation carrier, it fit within the limited reimbursement exemption to CUMCA whereby private health insurers or government medical assistance programs are not required to reimburse medical marijuana costs.

The Court rejected M&K’s arguments in their entirety and upheld the order requiring payment of plaintiff’s medical marijuana expenses, finding as follows: (1) federal law does not preempt CUMCA such that employers are prohibited from reimbursing their employees for medical marijuana costs or otherwise face a credible threat of federal criminal liability for doing so; (2) medical marijuana may be found to constitute a “reasonable and necessary treatment” under the Workers’ Compensation Act; and (3) M&K was not exempt from the requirement to reimburse the plaintiff for medical marijuana costs under CUMCA’s exemption because the exemption was expressly limited to private health insurers or government medical assistance programs and did not include workers’ compensation insurers.

This decision is yet another reminder that employers must be familiar with CUMCA and their obligations under the law.

If you have any questions about your obligations under CUMCA or ensuring that your workplace policies are compliant with CUMCA and the recent legislation legalizing marijuana for recreational use in New Jersey, please reach out to your CSG attorney or the authors listed here.

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