Injured workers in states where medical marijuana is legal face obstacles when seeking reimbursement for the drug, despite legislation aimed at simplifying the process.

A court ruling in Pennsylvania could soon clarify the issue for employers in that state, but rulings in other states leave an array of legal precedents for multistate companies to navigate.

Employers often remain concerned that paying for the cost of a drug that is illegal at the federal level could put them in danger of prosecution, experts say.

Medical marijuana is legal in 37 states and the District of Columbia, and several states have introduced legislation this year that would allow or expand its use, according to the National Organization for the Reform of Marijuana Laws, which advocates for decriminalization of marijuana.

Lawmakers in Indiana, Kentucky, Nebraska, South Carolina and Tennessee have introduced, or are planning to introduce, legislation to legalize medical marijuana, according to NORML.

New Jersey, Texas and West Virginia, meanwhile, are looking to expand and amend their existing medical marijuana programs.

Under federal law, though, cannabis is illegal and classified as a Schedule 1 drug, along with heroin, LSD, ecstasy and other potent drugs.

Amid legislative changes, state courts have split on whether injured workers should have access to marijuana and how. Some have ruled reimbursement is permitted, even ordered it in some cases, and others have said it would violate the federal Controlled Substances Act.  

Employers and workers compensation insurers often say that regardless of their own preferences, they are barred from paying reimbursements for cannabis, said Jenifer Kaufman, an Abington, Pennsylvania-based claimants attorney. Cannabis is sometimes used as an alternative to prescription painkillers.

Employers in Pennsylvania are waiting for a ruling on cannabis reimbursements from the state’s Commonwealth Court, which is soon expected to issue a decision in Sheetz v. Workers Compensation Appeal Board (Firestone Tire & Rubber). Courts in the state have not previously ruled on the issue.

Pennsylvania’s medical marijuana law contains no requirement for employers to cover the cost of a worker’s medical marijuana but it is silent on reimbursement.

“They don’t define coverage,” Ms. Kaufman said. “I don’t believe that coverage and reimbursement are the same thing.”

Elsewhere, the Supreme Judicial Court of Maine in 2018 overturned lower court rulings allowing injured workers to be reimbursed for medical marijuana.

The court wrote in Bourgoin v. Twin Rivers Paper Co. that “an employer that is ordered to compensate an employee for medical marijuana costs is thereby required to commit a federal crime.”

“I was disappointed, frankly. I thought the appellate division got it right,” attorney Paul Sighinolfi said of the Supreme Judicial Court of Maine’s Bourgoin decision.

Mr. Sighinolfi was the executive director and chairman of the Maine Workers’ Compensation Board from 2011 to 2019. He now serves as senior managing director of Burlington, Massachusetts-based Ametros Financial Corp.

Other state appeals courts – such as those in New Hampshire and New Jersey — have taken an opposite stance, ruling that insurers and employers must or can reimburse.

The U.S. Supreme Court in June 2022 declined to take up the issue after conflicting messages from state courts. It was asked to address the issue following a ruling by the Supreme Court of Minnesota determining employers do not have to reimburse for medical marijuana in comp.

The denial put the issue back in the state courts.

Bert Randall Jr., a defense attorney with Baltimore-based Franklin & Prokopik P.C., said he’s “hesitant to support reimbursement … only because of the substantial issues that employers and their insurers face when it comes to banking issues and dealing with some of the safety concerns by the use of marijuana,” which is unregulated in terms of dosing.

Because of a federal prohibition on illegal industries using the banking system, “it really puts employers and their insurers in very difficult positions,” he said.

In some states where courts have ordered reimbursement, payment has gone directly to the injured worker and not to a dispensary or provider, Mr. Randall said.  

Clients have had to come up with “fairly odd protocols” for reimbursement, he said.

“The mechanics of it, because of the restrictions on banking and making certain types of payments and the potential repercussions from that, creates a lot of concern,” he said.