BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Risk managers await guidance on cannabis

cannabis store

As more states legalize medical and recreational cannabis, risk management professionals in municipal and educational settings face numerous new issues but have been provided with little guidance on how to address them.

Concerns over how use of cannabis by off-duty police officers might affect their on-duty performance is a prime concern. 

In addition, cannabis remains illegal under federal law, classified as a schedule 1 narcotic by the Drug Enforcement Administration, which creates additional uncertainty for risk managers in states where the drug has been decriminalized.

In 2012, Colorado and Washington were the first states to decriminalize recreational cannabis. On April 22 of this year, New Jersey became the latest state to allow the use of cannabis by people over 21, granting so-called recreational licenses to 13 existing medical dispensaries in the state.

“It’s a real challenge,” said Mark Turkalo, national education and public entity placement leader for Marsh LLC in New York. “How do you operate? How do you react to something for which you literally have two opinions?”

From land use and environmental issues to policies for municipal employees, many municipalities are grappling with new and unanswered questions. 

“Our messaging has been telling clients to be very cautious until further clarification is given,” said Edward Cooney, partner, senior account executive, underwriting manager public entity practice, for Conner Strong & Buckelew in Parsippany, New Jersey. Mr. Cooney is underwriting manager for New Jersey’s Municipal Excess Liability joint insurance fund, which covers nearly 700 municipal entities in the state.

Sue Sharpe is a senior associate with Dorsey & Semrau LLP, a law firm in Boonton, New Jersey, that works with the MEL. The current situation is like being in “a holding pattern and hoping further guidance comes along. We’re just all assuming … there will be further guidance.”

Some guidance on how to handle the use of cannabis by municipal employees could come in the form of New Jersey Senate Bill 2656, said Paul Shives, vice president, safety services, with J.A. Montgomery Consulting in Parsippany. 

The bill, which “concerns use of cannabis by certain law enforcement officers during non-work hours,” is sponsored by Sen. Paul Sarlo, a Democrat, and was introduced in May. It has been referred to the Senate Law and Public Safety Committee. 

“Under the provisions of this bill, an employer is prohibited from taking any action which has the effect of prohibiting an employee from using cannabis items during non-work hours except when the employee is a law enforcement officer and the duties of the employment require the possession of a firearm,” the legislation says.

In addition to employee concerns, there are environmental issues associated with the growing cannabis industry, said Rich Erickson, senior associate with First Environment Inc., a consulting firm in Butler, New Jersey. “These are big facilities in small towns,” he said, which bring with them issues including those surrounding odor, water and solid waste disposal.

Neighbors of cannabis facilities may dislike the odor or activity associated with them, which can lead to land use issues in court.

“It’s the world of unintended consequences. You have legislation go into effect and there are a slew of consequences you don’t realize until they’re in front of you,” said Ms. Sharpe of Dorsey & Semrau.

Given the value of the crops, disputes over issues such as land use, which can cause a business to halt or alter operations and lose income, could become costly, Mr. Cooney said. 

Along with municipalities, educational institutions are also grappling with emerging cannabis legislation and the drug’s legalization.

Ike Jenkins, director of risk management for the University of Delaware and the chair of the RIMS 2023 annual conference programming committee, said, “The receipt of federal research grants requires compliance with federal regulations” and that such criteria “may be inconsistent with newly adopted legislation. Universities will need to carefully evaluate their position and policies in light of conflicting federal and state legislation.”

Mr. Turkalo said such federal funding is often “key to the operation of many institutions” which could be directly affected by the financial ramifications of not adhering to federal guidelines.

Mr. Jenkins added that higher education institutions continue to be bound by the federal Drug-Free Schools and Communities Act of 1989 and federal law continues to outlaw marijuana. “Regardless of what state laws say, many universities will continue to prohibit marijuana use on campuses,” he said.