What you need to know about Nevada’s Question 2

Alisa Nave-Worthsenior, semior policy advisor and counsel for Brownstein Hyatt Farber Schreck

Alisa Nave-Worthsenior, semior policy advisor and counsel for Brownstein Hyatt Farber Schreck

Marijuana advocates are poised for widespread success come Election Day. If polling is to be believed, recreational marijuana could be legalized in Nevada, California, Massachusetts, Maine and potentially Arizona, along with the likely passage of medical marijuana in Florida. What’s the first thing to expect after passage? A gigantic pot smokeout. State and local governments should be prepared for these public gatherings and should be thinking through what their response will be. Notwithstanding Question 2’s prohibition on public use, communities should anticipate that the “public use” prohibition in the measure will be widely ignored and replaced with massive public celebrations. Local government response will be necessary not only to the “day after” celebrations, but serious consideration will also need to be given to zoning ordinances, decisions about the placement of marijuana businesses in relation to schools and daycare centers, a potential for local taxes beyond the 15 percent excise tax the state will impose per the measure, an increased burden on already strained law enforcement resources, a local licensing scheme in addition to the state Department of Taxation state licensing process and how counties will address requests from retail marijuana businesses for licenses that exceed the caps delineated in the measure that are based on current population data. Question 2 does not give local governments an “opt out” if they wish to refrain from recreational marijuana sales in their borders, and this issue will likely be a topic for the legislature to consider. Local governments can, however, craft rules regarding where marijuana businesses can be located, but cannot outright ban the substance due to the measure’s personal cultivation allowance that provides for cultivation of up to six plants per person with an overall residence cap of 12 plants. Upon passage, the possession of less than an ounce of marijuana will be legal on Jan. 1, 2017. The broader retail sales framework will assuredly be addressed by the legislature when it convenes in February since, for the first 18 months of licensing, the Department of Taxation would only accept license applications for marijuana stores, production facilities and cultivation facilities from registered medical marijuana establishments. Additionally, the measure also allows registered wholesale liquor dealers to apply for a marijuana distributor license, which is inconsistent with other recreational marijuana laws. The legislature will need to address a myriad of issues, including, but not limited to, laws governing sales—ownership interests, background checks, criminal history and licensing requirements. The legislature will also have to address the product itself—potency, dosages, serving sizes, edibles, concentrates, impaired driving, retroactive criminal record changes, public education and awareness, and a youth education campaign. What should businesses do? Update their personnel handbooks and compliance policies immediately. Question 2 gives very little guidance to employers about how the measure does and does not apply to them. The onus will be on trade associations and companies to navigate this new world and seek any appropriate redress in the legislature to clarify pertinent rights and responsibilities. Question 2 essentially says that nothing in the measure prevents employers from maintaining their current workplace policies on drug use. Seems straightforward, but it’s not. The main issue for employers will be the following scenario: An otherwise excellent employee uses marijuana at home, comes to work and is subjected to a random drug test where he/she tests positive and the employee is terminated consistent with the employer’s drug use policy. Then, the employee sues for wrongful termination since recreational marijuana is legal under Nevada law. Colorado dealt with this “off-premise” use issue and it was ultimately decided by the Colorado Supreme Court that, notwithstanding state legalization, marijuana is still illegal under federal law and that employers could terminate employees for conduct in violation of an employer’s drug-free workplace policy. Employers also need to communicate with their drug testing labs. Several Colorado companies were receiving negative THC results regarding their employees when, in fact, these employees tested positive. Why? Because the labs changed the results based on a Colorado resident showing them a valid medical marijuana card, for example. The key here is that testing labs need to understand that state law does not retroactively change test results and employers still need drug test results regardless of state marijuana legalization. What’s the bottom line? This is a huge undertaking and it will twist and turn in every direction. Take a deep breath, prepare yourself, and recognize that marijuana policy will now be a part of countless debates by government and business leaders for decades to come. Melissa Kuipers Blake and Alisa Nave-Worth are senior policy advisors and counsel for Brownstein Hyatt Farber Schreck.


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