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Over the last three decades, 40 states have legalized the sale and use of medical marijuana in one form or another. Last week, the federal government followed suit, and the policy change could have significant repercussions on employers. For example, if an employer fires, or refuses to hire, a worker after a drug test shows the worker used marijuana, could that create liability under the Americans with Disabilities Act (ADA)?
On April 23, 2026, the U.S. Department of Justice (DOJ) issued an order reclassifying FDA-approved drug products containing marijuana and state-regulated medical marijuana to Schedule III of the Controlled Substances Act (CSA). Marijuana had previously been classified as a Schedule I drug (along with heroine, LSD, and ecstasy) and was not recognized to have any accepted medical use in the United States. The reclassification marks a significant shift and shows the DOJ finds these products do, in fact, have a medical use, along with a lower risk of dependence than Schedule I or II drugs.
The reclassification is limited to medical marijuana and FDA-approved products; it does not broadly legalize recreational marijuana under federal law, nor does it apply to synthetic THC. It is also important to note that the DOJ’s reclassification does not apply to employees working in safety-sensitive positions regulated by the U.S. Department of Transportation (DOT), such as truck drivers and airline pilots.
Nevertheless, employers should be aware of how this reclassification could change their obligations under federal employment laws with respect to non-DOT-regulated employees.
Of particular importance, the reclassification is expected to impact employers’ obligations to accommodate employees with disabilities under the ADA. Historically, the ADA’s exclusion of employees engaging in the “illegal use of drugs” has excused employers from accommodating an employee’s off-duty use of medical marijuana. Because lawfully obtained medical marijuana is now a Schedule III drug (like Tylenol with codeine), it is no longer categorically “illegal” under federal law. This means employers will be expected to engage in the interactive process and accommodate off-duty use of lawfully obtained medical marijuana by employees who have state-issued medical marijuana cards, just as they may be required to accommodate the off-duty use of other lawfully prescribed medications.
It should be noted, however, that employers are still able to prohibit employees from working under the influence, especially in safety-sensitive positions.
While the reclassification does not prohibit an employer from testing employees for THC, (the psychoactive agent in marijuana), such tests are now considered “medical examinations” under the ADA that may only be conducted when job-related and consistent with business necessity. As a result, pre-employment tests for THC may only be conducted after extending a conditional offer of employment; the results of any tests for THC must be maintained separate from an employee’s personnel file and kept confidential; and employers conducting tests for THC must comply with the requirements of the Genetic Information Nondiscrimination Act (GINA) by instructing testing personnel not to collect any genetic information from employees and informing employees both that the employer is not seeking genetic information and that the testing personnel should not collect genetic information. Positive test results, however, should now trigger a discussion to determine if the employee is lawfully using medical marijuana off-duty to treat a disability. This may sound funny to some, but the legal obligations are no laughing matter.
The reclassification does not alter federal contractors’ obligations under the Drug-Free Workplace Act, which requires a workplace free of drugs without prohibiting drug use outside the workplace. Because medical marijuana is now permitted under federal law, employees of federal contractors who lawfully use medical marijuana should be treated the same as any other employee using a Schedule III drug.
As a further consequence of the reclassification, state medical marijuana licensees will no longer be subject to the deduction disallowance imposed by Section 280E of the Internal Revenue Code. As a result, state medical marijuana licensees may now be able to deduct standard “ordinary and necessary” business expenses, such as rent, payroll, marketing, and utilities.
Employers should use this reclassification as an opportunity to proactively review their drug testing policies, ADA accommodation practices, and disciplinary protocols, as well as the potential tax implications of the reclassification. If you have questions about how this development may impact your workplace, please contact your Miller Canfield attorney or one of the authors of this alert.
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Find Your Next Job !
Over the last three decades, 40 states have legalized the sale and use of medical marijuana in one form or another. Last week, the federal government followed suit, and the policy change could have significant repercussions on employers. For example, if an employer fires, or refuses to hire, a worker after a drug test shows the worker used marijuana, could that create liability under the Americans with Disabilities Act (ADA)?
On April 23, 2026, the U.S. Department of Justice (DOJ) issued an order reclassifying FDA-approved drug products containing marijuana and state-regulated medical marijuana to Schedule III of the Controlled Substances Act (CSA). Marijuana had previously been classified as a Schedule I drug (along with heroine, LSD, and ecstasy) and was not recognized to have any accepted medical use in the United States. The reclassification marks a significant shift and shows the DOJ finds these products do, in fact, have a medical use, along with a lower risk of dependence than Schedule I or II drugs.
The reclassification is limited to medical marijuana and FDA-approved products; it does not broadly legalize recreational marijuana under federal law, nor does it apply to synthetic THC. It is also important to note that the DOJ’s reclassification does not apply to employees working in safety-sensitive positions regulated by the U.S. Department of Transportation (DOT), such as truck drivers and airline pilots.
Nevertheless, employers should be aware of how this reclassification could change their obligations under federal employment laws with respect to non-DOT-regulated employees.
Of particular importance, the reclassification is expected to impact employers’ obligations to accommodate employees with disabilities under the ADA. Historically, the ADA’s exclusion of employees engaging in the “illegal use of drugs” has excused employers from accommodating an employee’s off-duty use of medical marijuana. Because lawfully obtained medical marijuana is now a Schedule III drug (like Tylenol with codeine), it is no longer categorically “illegal” under federal law. This means employers will be expected to engage in the interactive process and accommodate off-duty use of lawfully obtained medical marijuana by employees who have state-issued medical marijuana cards, just as they may be required to accommodate the off-duty use of other lawfully prescribed medications.
It should be noted, however, that employers are still able to prohibit employees from working under the influence, especially in safety-sensitive positions.
While the reclassification does not prohibit an employer from testing employees for THC, (the psychoactive agent in marijuana), such tests are now considered “medical examinations” under the ADA that may only be conducted when job-related and consistent with business necessity. As a result, pre-employment tests for THC may only be conducted after extending a conditional offer of employment; the results of any tests for THC must be maintained separate from an employee’s personnel file and kept confidential; and employers conducting tests for THC must comply with the requirements of the Genetic Information Nondiscrimination Act (GINA) by instructing testing personnel not to collect any genetic information from employees and informing employees both that the employer is not seeking genetic information and that the testing personnel should not collect genetic information. Positive test results, however, should now trigger a discussion to determine if the employee is lawfully using medical marijuana off-duty to treat a disability. This may sound funny to some, but the legal obligations are no laughing matter.
The reclassification does not alter federal contractors’ obligations under the Drug-Free Workplace Act, which requires a workplace free of drugs without prohibiting drug use outside the workplace. Because medical marijuana is now permitted under federal law, employees of federal contractors who lawfully use medical marijuana should be treated the same as any other employee using a Schedule III drug.
As a further consequence of the reclassification, state medical marijuana licensees will no longer be subject to the deduction disallowance imposed by Section 280E of the Internal Revenue Code. As a result, state medical marijuana licensees may now be able to deduct standard “ordinary and necessary” business expenses, such as rent, payroll, marketing, and utilities.
Employers should use this reclassification as an opportunity to proactively review their drug testing policies, ADA accommodation practices, and disciplinary protocols, as well as the potential tax implications of the reclassification. If you have questions about how this development may impact your workplace, please contact your Miller Canfield attorney or one of the authors of this alert.
More Upcoming Events
Sign Up for any (or all) of our 25+ Newsletters
You are responsible for reading, understanding, and agreeing to the National Law Review’s (NLR’s) and the National Law Forum LLC’s Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free-to-use, no-log-in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates, or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys, or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.
Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com intended to be a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us.
Under certain state laws, the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.
The National Law Review – National Law Forum LLC 2070 Green Bay Rd., Suite 178, Highland Park, IL 60035 Telephone (708) 357-3317 or toll-free (877) 357-3317. If you would like to contact us via email please click here.
Copyright ©2026 National Law Forum, LLC