Rod Kight: Medical Cannabis & Workers Compensation

Thirty-three states and the District of Columbia have legalized cannabis for medical purposes, and many others have passed limited measures that allow the medical use of certain low-THC cannabis extracts. In states where patients (and doctors) obey state law, one might expect that insurance companies would treat doctor-approved medical cannabis on a level playing field with other therapies. Unfortunately, because cannabis remains unlawful under federal law and is not an FDA-approved medication, that has not been the case.


Author: Rod Kight

There is one type of insurance claim, however, where medical cannabis patients have a fighting chance for coverage: workers’ compensation claims.

In a landmark 2018 case, a New Jersey judge ruled that a workers’ compensation insurance company had to cover an injured worker’s medical cannabis expenses. The claimant showed that state-legal medical cannabis enabled him to manage pain and to reduce usage of addictive narcotic medications. Other New Jersey decisions and decisions in New HampshireConnecticutMinnesota, and New Mexico have also found that such treatments are reimbursable under state workers’ compensation laws. Although certain other states have reached the opposite conclusion, these are clear victories for injured workers seeking medical cannabis as an alternative to more dangerous, addictive pain medications.

Workers’ compensation cases are likely to continue highlighting the tension between federal and state laws. In Massachusetts, for example, the Supreme Judicial Court recently heard oral arguments in Wright v. Central Mutual Ins. Co., where the Department of Industrial Accidents denied a claim for reimbursement of medical cannabis expenses. The Department agreed that two requirements for a workers’ compensation claim were met: that the treatment was “reasonably necessary” and that it provides a “positive benefit.” Even so, the Department asserted that the Controlled Substances Act preempted the state’s workers’ compensation law, and the administrative judge and reviewing board agreed.

The key issue in Wright is similar to the one that New Jersey resolved in favor of the claimant: When an insurance company is concerned that it would violate the Controlled Substances Act (CSA) by reimbursing a claim, does the state’s workers’ compensation law still require it to do so?

At oral argument, the claimant pointed to the current lack of enforcement of the CSA by the federal government with respect to state-legal medical cannabis. Moreover, because merely reimbursing a claim would not involve distributing or manufacturing cannabis, the claimant argued that the insurance company would not have the requisite intent to be prosecuted for aiding and abetting a violation of the CSA. The claimant also stressed the great latitude that the federal government generally affords states with respect to the practice of medicine, which the CSA was never intended to regulate.

The resolution of these issues in Massachusetts will be another important milestone in resolving the longstanding tension between state and federal authorities with respect to cannabis as a medical treatment.

June 30, 2020

Rod Kight is an international hemp lawyer who resides in North Carolina. He represents businesses throughout the cannabis industry. Additionally, Rod speaks at cannabis conferences, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. Rod also has extensive experience representing clients through periods of financial distress. You can contact him by clicking here

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Carl L Rowley -Thompson Coburn LLP

Jerry Chesler – Chesler Consulting

Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
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Lance Rogers – Greenspoon Marder – San Diego
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Tracy Gallegos – Partner – Fox Rothschild

Adam Detsky – Knight Nicastro
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Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Matthew Ginder – Greenspoon Marder
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William Bogot – Fox Rothschild

Valerio Romano, Attorney – VGR Law Firm, PC

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Tracy Gallegos – Associate Fox Rothschild

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Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

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William Stewart – Half Baked Labs

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William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

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