IMPLICATIONS OF MEDICAL MARIJUANA INITIATIVE 437 ON NEBRASKA’S WORKERS’ COMPENSATION SYSTEM

by | Oct 21, 2024

On the ballot for the November 5, 2024 election is Initiative 437, a measure aimed at legalizing medical marijuana in Nebraska. This initiative, if passed, would create a legal framework for the medical use of cannabis. While the focus of Initiative 437 is on providing access to medical marijuana for individuals with qualifying conditions, this may have implications on Nebraska's workers' compensation system. A pressing concern is whether employers or insurers may be compelled to reimburse injured workers for the costs associated with medical marijuana in the context of workers' compensation claims. As the proposed statute currently stands, this remains a possibility.

Understanding Ballot Initiatives

An initiative is a process that allows citizens to propose legislation and submit it for a vote, bypassing the legislature. In Nebraska, this process requires a petition to gather a specified number of signatures from registered voters. Initiative 437 successfully met this requirement, obtaining enough signatures to qualify for the ballot. As a result, it is now set for public approval in the upcoming November 5, 2024 election.

Summary of Initiative 437

Initiative 437 seeks to establish a legal framework for medical marijuana in Nebraska by enacting the “Nebraska Medical Cannabis Regulation Act”. The object of this initiative is to eliminate penalties under state law for the possession, manufacture, distribution, delivery, and dispensing of cannabis for medical purposes by registered entities. The initiative proposes the creation of the Nebraska Medical Cannabis Commission, which would regulate these activities.

Key provisions of Initiative 437 include:

- Medical Use: Initiative 437 allows cannabis, cannabis products, and accessories intended for medical use by qualified patients, thereby creating a legal pathway for individuals with qualifying medical conditions to access cannabis.

- Registered Establishments: The initiative provides for the registration of private entities that can legally possess, manufacture, and distribute cannabis for medical purposes, establishing a regulated marketplace.

- Regulatory Authority: The Initiative would create the Nebraska Medical Cannabis Commission and task it with overseeing the registration and regulation of cannabis establishments, ensuring compliance with established rules and standards.

- Implementation Timeline: The commission is required to set up criteria for registration by July 1, 2025, and begin granting registrations by October 1, 2025.

The Process for Initiative 437 to Become Law, If Approved

After Election Day, the ballot results are presented to the State Canvassing Board, which certifies the statewide vote totals on December 2, 2024. If successful, on or before December 12, 2024, the Governor will issue a proclamation declaring the initiative passed, and the legislation will take effect at that time.

At that point, the Nebraska Legislature would have the authority to amend, repeal, modify, or impair the statute with a two-thirds vote of all elected members. This means that while the initiative establishes a framework for medical marijuana use, the legislature retains power to amend the statute, or could put forth additional legislation with provisions related to workers' compensation.

Potential Obligations for Employers and Insurers

If Initiative 437 is enacted, it could create the possibility that employers will be obligated to provide medical marijuana to injured employees through workers' compensation claims. The statute does not explicitly prohibit this requirement, leading to speculation about how it would be applied in practice. Some states have adopted statutory provisions clarifying that insurers or employers may not be compelled to reimburse patients for costs associated with the use of medical marijuana.

If medical marijuana were authorized, it could potentially be considered “reasonable and necessary medical care”. Under Section 48-120(1)(a) of the Nebraska Workers’ Compensation Act, “the employer is liable for all medical services… and medicines… which will relieve pain or promote and hasten the employee’s restoration to health and employment…”. Without further clarification, courts may hold employers and insurers liable for providing medical marijuana to an injured worker if their physician indicates a need for it.

Yet, if employers were required to pay for medical marijuana, it would create a conflict with federal law, specifically the Controlled Substances Act, which classifies marijuana as a Schedule I controlled substance. Even if the federal government has implemented measures to prevent prosecution for federal marijuana offenses in states that have legalized it, an employer or insurer complying with a court order to provide medical marijuana to an injured worker would nevertheless be violating federal law.

Legal Precedents and Considerations

Even in those states that have legalized medical marijuana, there are few appellate decisions regarding marijuana use in workers' compensation treatment. One key issue that courts have examined is the aforementioned notion that requiring compensation for medical marijuana could lead employers to violate federal law. Furthermore, in cases where courts ordered employers to cover medical marijuana costs, state appellate courts have generally refrained from addressing whether federal law preempts state laws permitting medical marijuana. Notably, the U.S. Supreme Court has denied certiorari in these cases, leaving significant legal uncertainty.

Courts have also considered the argument for allowing medical marijuana in workers' compensation claims, looking to provisions in state acts that make employers liable for all reasonable medical services and medications needed for injury-related pain relief. In Nebraska, this is articulated in Nebraska Revised Statute Section 48-120, which could be interpreted to include medical marijuana if the initiative is passed and no prohibitive language is introduced.

Conclusion

As we approach the November 5, 2024 election, the potential effects of Initiative 437 on the workers’ compensation system are significant.  It is important for employers and insurers to stay informed about these changes.  If you have questions about Initiative 437’s implications on workers’ compensation or any other questions regarding Nebraska workers’ compensation, please reach out to Paul Barta at (402) 475-1075.

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