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When a cannabis company is developing their HR manual/policies, is there anything particularly unique that a cannabis company needs to focus on?

1 Answer, 4 Replies
Carole Richter
Carole Richter  replied:

Recently, the NCIA HR Council discussed this same question!  What is very unique in this market is our tenuous right to operate.  Disgruntled employees may have more power to incite claims from the DOL, EEOC, state or local regulatory agencies.  This requires owners to learn and ensure compliance with all federal, state and local employment laws.  If you understand your responsibilities, manage accordingly, and document decisions then you are in a better position to defend your actions, when an employee brings forth frivolous lawsuits or agency charges. 

In this emerging market, we are developing new products and, in these businesses, you would want policies in place with respect to Confidentiality.  I’m not a fan of Non-Competes as they may restrict one’s ability to continue working in the industry but they may be appropriate in some cases.  With all policies, you want to review them with counsel to ensure they are legal and enforceable in your state.  Non-competes, for instance, may not be enforceable in Colorado.   

Another topic that often arises, surrounds the use of cannabis during working hours.  There are valid reasons for prohibiting the use, or at least the abuse, of alcohol, drugs (including prescription drugs) and cannabis while at work.  The use may jeopardize your business license, create unsafe working conditions, or negatively impact employee productivity.  Since drug testing measures “use” not “abuse,” and cannot measure impairment, I suggest a policy that simply addresses poor performance.  If an employee is abusing drugs or alcohol, the quality and/or quantity of their work will suffer.    If this happens, inform the employee of your observations, with examples of the undesirable behavior or performance, give them an opportunity to improve and if they do not, then escalate your discipline, up to and including termination.  Such a policy is called Progressive Discipline and is a fair and just process when dealing with any employee transgressions.  There are exceptions to Progressive Discipline such as new employees that are not a good fit or for serious offenses (theft, violence, etc.).  In either of these cases, swift terminations may be best.  

If you choose to use drug testing, I would not advise pre-employment testing due to the limitations of the “test.”  Some employers may choose to test after observing impaired behavior at work.  Such a policy is called and based on “Reasonable Suspicion.”  Or, they may retain the right to test “Post-Accident” in conjunction with observations of impairment, should the employee be responsible for a workplace or auto accident that causes significant harm to themselves, other employees, or property.  Many often think the government or work comp carriers require testing, but since it doesn’t measure impairment, I have found it is often the employer’s decision.

I believe the use of medicinal cannabis should be given consideration as an accommodation during the interactive process dictated by the Americans with Disabilities Act.  Some state laws reflect this positive line of thinking, as well.  The ADAAA dictates we give individualized consideration to anyone with a disability to “enable” them to perform the essential job functions.  But, this does not mean you must lower your performance standards!

Contact me if you would like a list of federal laws that you must comply with.  Build your policies to mirror them and then go beyond the laws to define the positive culture you want to establish.

Mark Slaugh
Mark Slaugh  replied:


From a compliance perspective, you also want to include policies and procedures across the organization that create a culture of compliance. Employees should not bring personal marijuana or paraphanelia on premises, for example, and should understand that all personal property is subject to seach by enforcement and management.

Additionally, fireable offenses, job roles and responsibilities, and employee training documents all work in conjunction to help mitigate the risk of non-compliance by any employee. We produce these documents, so feel free to reach out should you require document development and compliance services for your State. mark@icomplycannabis.com

Todd Arkley
Todd Arkley  replied:

Thank you very much Carole! This is incredibly helpful. I am a CPA in Washington and many of my clients are now starting to work on employment manuals and policies. I'll make sure to pass on your information to them as the need arises.

Carole Richter
Carole Richter  replied:
Thanks for asking, Todd!
Anonymous  replied:

Thank you both for this information, I feel as though these questions are being overlooked in the process of how to start a cannabis company.