How Does Marijuana Legalization Affect Businesses and Universities?

            When a state passes a law making recreational use of marijuana legal, what does that mean for schools, businesses, and other entities located within that state?  This very issue is being raised in several states, such as Colorado, that have recently legalized marijuana.  To completely understand the issues at hand, it’s important to realize that marijuana remains illegal under federal law.  Even if Colorado state law allows personal marijuana use, federal law does not.  To take that a step further, some believe that businesses involved with federal contracts or receiving federal grants, as well as educational institutions/universities could lose their federal funding and research funds if marijuana is used by those employees or other personnel.  After Colorado legalized marijuana last month, University of Colorado president Bruce Benson explained that "marijuana threatens to cost the university nearly a billion dollars annually in federal revenue, money we can ill afford to lose.”

            Another issue is whether employers will be able to terminate an employee who tests positive for marijuana in a state where it has been legalized.  In some states, like Alabama, an employer has the ability to terminate an employee for almost any (non-discriminatory) reason.  Some states, however, specifically forbid an employee from being terminated for any private conduct that is legal.  These laws are generally aimed at preventing an employee from being fired for smoking or drinking while away from the office, but with the legalization of marijuana, these employment laws may need to be reexamined, especially given the conflict between an activity that is legal under state law but remains illegal under federal law.  Should an employer to be required to retain an employee who (now legally) smokes marijuana after work?

            With every election bringing another handful of states deciding on whether to keep marijuana use criminalized, it will be interesting to see how states move to protect employers and universities, in particular those relying on federal funding, that wish to prohibit marijuana use.