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Recreational pot bill advances as employers voice concerns

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A House committee cleared a bill for recreational sale of marijuana in Delaware, but employers and the medical marijuana industry raised concerns over legalization’s impact. | PHOTO BY BUDDING . on UNSPLASH

DOVER – A bill to legalize recreational marijuana in Delaware cleared the House Health & Human Development Committee on Wednesday, after business advocates and medical marijuana experts voiced their concerns during a nearly four-hour public meeting.

The committee’s vote marks the first step in a long journey for House Bill 150, which would allow adults over 21 to buy up to an ounce of pot in Delaware, as well as open the market to recreational cultivation, manufacturing, testing and retail stores. The bill, introduced last week by Rep. Ed Osienski, (D-Newark), establishes a 15% tax on all recreational cannabis products. The bill now heads to the House Appropriations Committee, as the costs of the proposal are scrutinized. 

While several Delaware residents – including retired police officers and medical marijuana cardholders – voiced their support for HB150 during the virtual meeting, private sector leaders were concerned about workplace regulations and the negative impact recreational use could have on the state’s medical marijuana program.

Medical marijuana industry leaders fear the bill will exacerbate an existing oversupply of product and further saturate the market, forcing existing facilities to shut down or downsize.

A representative of Fresh Delaware said the Newark-based dispensary’s workforce as well as its multi-million-dollar expansion of its cultivation facility would be negatively impacted by HB150.

“Increasing the number of cultivation sites at this time – even from six to 10, let alone 60 – would render our carefully considered long-term vision a non-recoupable loss and would cause us to lay off our unionized workers,” said David White, the chief legal officer for Fresh Delaware, during the meeting. “Indeed, we are planning to issue a reduction force notice this week if this bill should advance.”

Under the current bill, obtaining a recreational cannabis license is much cheaper than medical marijuana fees. The state’s Division of Public Health recommended raising the recreational licensure fee in HB150 from $10,000 to at least $20,000, so those facilities are more closely in line with Delaware’s dispensaries, also known as “compassion centers,” which pay a $40,000 fee every two years.

“Otherwise DPH is concerned that this wide cost difference will result in a shift from medical marijuana production to recreational due to the low fee structure,” said Alanna Mozeik, a policy leader for the state division.

The shift to more recreational facilities could also limit product access among cardholders like cancer and pediatric patients, experts warned.

“This legislation as proposed would increase cultivation capacity by 650%,” said Sharice Ward, the retail director for Columbia Care Delaware, the publicly traded company that operates dispensaries in all three counties. “Have there ever been market studies conducted by the legislature that suggest that this is an appropriate amount?”

Ward also asked lawmakers how the state will guarantee marijuana access for cardholders.

Meanwhile, Delaware business leaders want to ensure they can enforce their current zero-tolerance policies on impairment. That includes Delmarva Power, which requires drug and alcohol testing for certain employees, even when they are imbibing after work hours. The company asked lawmakers for a friendly amendment that clarifies a zero-tolerance position and allows employers to make their own policies on employees’ cannabis use.

“Employers are best suited to determine what policies are needed for their unique workplace,” said Anne Farley, a consultant who spoke for Delmarva Power.

James DeChene

While HB150 does allow employers to restrict the use of cannabis while at work, the bill doesn’t include language on prohibiting its use after work hours, James DeChene of the Delaware State Chamber of Commerce said during the virtual meeting.

DeChene asked lawmakers to ensure that employers are able to regulate marijuana use in the same way that some Delaware companies can prohibit tobacco use for safety reasons, regardless of whether the employee is at work or at home.

DSCC also wants liability protection for employers as well as a spot test that can measure impairment before lawmakers consider legalizing recreational pot.

DeChene pointed to potential legal ramifications if an employer wrongly assumes a worker is under the influence of marijuana and disciplines them for it.

“I think it opens up the ability for an employee to bring suit where the employer is doing the best that they can to regulate the use of marijuana in the workplace,” he said.

Legalization also can present more administrative red tape and questions on how to ensure a safe workplace, particularly for the manufacturing sector, as top business leaders discussed at the Delaware State Chamber’s Manufacturing and Policy Conference on March 24. Mitch Magee, director of global advanced manufacturing technology at PPG Aerospace, said that in his state of California, recreational marijuana use has presented some challenges to determine what is an acceptable level of use.

“If you’re doing any work with the federal government, in particular, defense contracts, you are required to have a drug-free workplace and I don’t see that as changing,” Magee said. “If you’re working with chemical plants when you’re dealing with potential hazardous materials or processes, you’ve got to have some assurance that the employees are, from a liability standpoint, operating as safely as they can.”

In Agilent Technologies Senior Scientist Anthony Macherone’s view, there still is no legal threshold for inebriation from marijuana, unlike alcohol, and THC has a short half life in the body. If companies started testing based on metabolites it could signal a chronic or rare use.

If a workplace accident occurs, companies could require a blood test but even then it could be hard to detect if a person was inebriated.

“This is my opinion, but I think what ultimately will happen is people will require cognitive tests, the typical touching of toes and saying the alphabet backward,” Macherone said. “That may be the only thinking we really have for a while to say whether someone is impaired at the time of an incident.”

On the administration side, it also leaves open the question of how to handle drug testing in the workplace. Some companies in legalized states no longer pre-screen for it, but temp agencies still do. Looking ahead, it may mean companies will move away from randomized tests and focus on testing policies for positions who need to safely handle hazardous materials or heavy equipment.

Legalizing marijuana could also come with some unintended consequences and boons for Delaware businesses. There might be an opportunity for laboratories to get into the business of testing marijuana for potency and to clear it for heavy metals, mercury, arsenic and pesticides before it goes to market, Macherone said.

Eagle Precision Sheet Metal and Turk Manufacturing CEO Thomas Sanford also noted that from his business perspective in Oregon, marijuana manufacturing has some surprising impacts on the real estate market.

“In the states where it has become legalized, you’ve seen the companies either growing or storing marijuana to buy and lease up a lot of the warehousing space,” Sanford said. “I know it’s become an issue for others in the sector.”

Magee also said that the biggest challenge from legalization in California was on the administrative burden on growing the marijuana supply chain.

“The taxes and other issues are so burdensome that frankly the illegal market has actually increased because the demand has grown. The market is still $3 billion. The illegal market is still bigger,” he said. “From a public health standpoint, the problem there is illicit products that may be contaminated.”

Katie Tabeling contributed to this story.

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