On February 22, 2022, the Supreme Court of the United States asked the United States Department of Justice to weigh in on an issue that has divided state courts in recent years: should states with laws requiring insurers and employers to compensate medical marijuana users for the costs of their cannabis be given deference superior to federal drug policy? The question comes as the Court weighs taking up an appeal from the Minnesota Supreme Court, which ruled that an employer could not be forced to cover the costs of medical marijuana prescribed to an employee, because it would be abetting a federal crime. 
The thrust of the Minnesota Supreme Court’s decision was that the Controlled Substances Act, 221 U.S.C. §§ 801-971 (“CSA”), which classifies marijuana as a Schedule I controlled substance, preempted Minnesota workers’ compensation law which required an employer to reimburse an injured employee who uses medical cannabis for the treatment of a work-related injury.  Specifically, the court found that requiring the employer (and, by extension, its workers’ compensation insurer) to pay for cannabis, even if a valid medical treatment under Minnesota law, would expose the employer to criminal liability under federal law for aiding and abetting the employee’s unlawful possession of cannabis.
The Minnesota court’s decision was the most recent in a series of state court opinions finding that federal criminal law preempts state laws decriminalizing the possession and use of medical cannabis in the context of workers’ compensation. In Bourgoin v. Twin Rivers Paper Co., LLC, an opinion cited by the Minnesota Supreme Court in Musta, the Maine Supreme Judicial Court ruled that a state order to reimburse an employee for medical cannabis would require the employer to “engage in conduct that would violate the CSA.”  Similarly, in Wright’s Case, the Massachusetts Supreme Judicial Court ruled that, while a state may authorize individuals to use medical cannabis products (and thereby voluntarily assume the risk of federal prosecution), it could not require a third-party employer or insurer to participate in such conduct (at the risk of being prosecuted themselves). 
On the other hand, some state supreme courts have reached different conclusions. In Appeal of Panaggio, the New Hampshire Supreme Court rejected the finding of the Bourgoin court as a persuasive argument, and ruled that federal law did not criminalize insurance reimbursement for medical cannabis, because the reimbursing party lacked the requisite mens rea for aiding and abetting a federal offense, because their participation is compelled by state law.  Similarly, in Hager v. M & K Construction, the New Jersey Supreme Court found that the CSA did not preempt state law regarding marijuana reimbursement; however, its reasoning was grounded in standing Congressional prohibition, by means of appropriations riders, of Department of Justice interference in state medical marijuana laws. 
The Supreme Court of the United States has amassed a consistent track record of declining to take up cases challenging marijuana’s status as a Schedule I substance under the CSA. However, in June 2021, Justice Clarence Thomas, writing in a denial of certiorari in Standing Akimbo LLC v. U.S., opined that federal cannabis prohibition may no longer be “necessary or proper,” given the inconsistent approach to enforcement the federal government has taken, particularly with regards to states that have authorized medicinal cannabis use. 
The Supreme Court’s invitation to the Department of Justice to submit a brief on the issue of medical marijuana payments, while not proof-positive of a shift in the Court’s view on federal cannabis law, does mark a departure from its historic posture and, when read in light of Justice Thomas’ writing in the Standing Akimbo case, suggest that the Court is, at minimum, open to the idea of limiting the extent of federal prohibitions concerning cannabis. Currently, 36 states permit medical cannabis use, and of that number, 18 permit some degree of recreational use. If you have questions concerns about compliance with state or federal regulation regarding medical cannabis reimbursement, or other business concerns within the cannabis industry, Dunlap Bennett & Ludwig has knowledgeable attorneys who can counsel you for your region and guide you and your business through the shifting landscape of state and federal cannabis policy.
 Musta v. Mendota heights Dental Center et al.¸ Case No. A20-1551 (Minn. 2021). The pending appeal before the Supreme court of the United States is styled Susan K. Musta v. Mendota Heights Dental Center et al., Case No. 21-676.
 Minn. Stat. § 176.135, subd. 1 (2020).
 Bourgoin v. Twin Rivers Paper Co., LLC, 187 A.3d 10, 20 (Me. 2018). This ruling was the first by a state supreme court addressing a preemption challenge in the context of employer reimbursement of medical cannabis in a worker’s compensation context.
 Wright’s Case, 156 N.E.3d 161. Unlike its counterparts, this case also turned on a provision in Massachusetts’ medical cannabis law, which relieved health insurance providers of any obligations to provide reimbursement for patients utilizing medical cannabis.
 Appeal of Panaggio, 205 A.3d 1099 (N.H. 2019).
 Hager v. M & K Construction, 247 A.3d 864 (N.J. 2021). The court went on to opine that a “clear, volitional act in the form of appropriations law takes precedence over” the CSA. Id. at 887. Based on this rationale, the court found no conflict between the federal and state laws.
 Standing Akimbo, LLC v. U.S., 141 S. Ct. 2236. Justice Thomas went on to warn that the “contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary.” Id. at 2237. In this case, Standing Akimbo, LLC ran afoul of a provision of the Tax Code that limited companies dealing in controlled substances to subtracting the cost of goods sold from gross revenue to determine taxable income; the general rule is that ordinary and necessary business expenses may also be subtracted from gross revenue. See 26 U.S.C. § 162(a); 26 CFR 1.61-3(a) (2020); 26 U.S.C. § 280E.