Effective Cannabis Testing in the Workplace: No, We’re Not There Yet

Determining when an employee took cannabis and to what degree they are impaired are challenges for employers and public safety agencies alike.

By: Annemarie Mannion | June 10, 2019

It might be called the cannabis conundrum. As more states have legalized or are moving toward legalizing both medical and recreational cannabis, companies across the country are weighing how to accurately determine whether employees are impaired by cannabis in the workplace.

The issue seems pretty straightforward except for a major problem: There is not currently an effective method of real-time quantitative testing of cannabis impairment.

Medical marijuana is currently legal in 33 states and in Washington D.C. Recreational marijuana is allowed in 10 states and at least 10 more are considering legalizing it in 2019 with more expected to follow in 2020.

Cannabis: In Brief

Recreational marijuana is defined as any marijuana use without medical justification. It typically contains THC, which is the chemical responsible for marijuana’s psychoactive effects. In states where it is legal, medical marijuana is only considered “medical” if it is dispensed to a qualified patient from a medical marijuana treatment center or dispensary.

As legalization by states spreads, marijuana’s popularity is on the rise. It is estimated that recreational sales of marijuana were about $1.55 billion in the U.S. in 2016 and will reach $8.7 billion by 2021, according to Statista.

Sales of medical marijuana are expected to increase from between $3.1 and $3.7 billion in 2017 to between $4.9 and $6.1 billion by 2022.

This growth is occurring even as cannabis continues to be outlawed by the federal government, which classifies it as a Schedule 1 drug, the same as heroin, LSD or ecstasy. A Schedule 1 drug cannot be prescribed by a doctor or dispensed by a pharmacy.

Mary Kay O’Neill, physician and partner, Mercer

Before a drug can be labeled as medication, the Federal Drug Administration requires clinical tests on hundreds to thousands of human subjects to determine the benefits and risks. Those tests have not been done for cannabis.

“Because it is classified as a Schedule 1 drug there is just not a body of research about the effects of cannabis like we have with other things,” said Mary Kay O’Neill, a physician and partner at Seattle-based Mercer, a global consulting firm that helps clients advance the health of their employees.

“There’s experience with it, but not rigorous studies.”

Determining Impairment

Unlike alcohol, which is water soluble and allows for testing to determine current impairment, cannabis is stored in the body’s fat and is released into the bloodstream over a long time. That means an employee who used cannabis a few days or even weeks ago may still have it in their body but not be impaired.

“The challenge with marijuana is determining when it was used,” said Denise Algire, director, risk initiatives and corporate risk management for Albertsons, a nationwide grocery store chain.

“I don’t know that there has been a good resolution.”

Despite what states are doing, Algire, who is expressing her own opinions, not Albertsons, pointed out that employers have a federal mandate under Occupational Safety and Health Administration rules to address impaired workers who contribute to unsafe work environments.

“I think it is a big concern for us, for our employers,” said Melissa Burke, PharmD, Head of Managed Care and Clinical for AmTrust Financial.

“The risk of impairment on the job puts everyone that is in that workplace at risk,” she said.

The current methods for testing for cannabis include hair, urine, saliva and blood testing — all of which are problematic for various reasons including being invasive and taking time to administer and to get results. They also don’t indicate real-time impairment.

“They can be indicative of impairment, but they won’t definitely confirm impairment,” said Kelly VanBuskirk, an attorney with Lawson Creamer, a law firm specializing in labor and employment in St. John, New Brunswick, Canada. Recreational cannabis was legalized nationwide in Canada in 2018.

“We’re in the same boat you are,” said VanBuskirk of Canadian employers and public safety agencies. “There is still a question mark hanging over the issue of determining impairment.”

Testing Advancements and Prototypes

Some solutions seek to create a field test similar to the portable breathalyzer that detects alcohol in a person’s system.

Michigan State Police, motivated by an increase in drug-impaired traffic fatalities, operated a pilot program from 2017 to 2018 in five counties using the Alere DDS2 Mobile Test System, a roadside saliva test, for when impaired driving was suspected. It revealed a positive, negative or invalid result for the drugs being tested, including cannabis. The police also conducted secondary blood testing to validate results.

“Even if blood or saliva levels of THC can be accurately measured, there is still not agreement in the research literature about what those levels mean for impairment.” — Mary Kay O’Neill, physician and partner, Mercer

A total of 92 roadside tests were conducted during the year-long pilot, and 74 were positive for THC. Eleven tests were not confirmed by blood analysis, which drew some criticism. Even so, the state is proceeding with an expanded pilot program.

Kathy Stitzlein, president and CEO of Triple Beam Technologies, is developing the Cannibuster, a product which she believes will be able to measure the exact level of THC in a person’s saliva.

The Cannibuster is a handheld device with a disposable test cartridge that isolates and measures the level of THC in a person’s system in as little as 10 minutes. The company is currently producing pre-production units and expects to begin clinical trials and field testing in 2020. What level of THC constitutes impairment is an open question.

“There is a lot of research to be done in the scientific community to determine what constitutes impairment and how we can objectively define that,” Stitzlein said.

O’Neill agreed: “Even if blood or saliva levels of THC can be accurately measured, there is still not agreement in the research literature about what those levels mean for impairment — either medically or legally,” she said.

“We encourage employers to maintain a safe work environment. At this point we don’t have guidance on what level of cannabis would equate to impairment,” said AmTrust’s Burke.

Some states, including Colorado and Washington, have defined the legal limit for driving under the influence as five nanograms of active THC in the blood. Nevada has defined it as two nanograms.

A Denver-based company, Predictive Safety SRP, is taking a different approach. It produces the AlertMeter, which is used to detect fatigue in employees. It has found some companies are using it to determine fitness for work regardless of cause.

The AlertMeter displays 30 graphic items and takes 60 to 90 seconds to complete.

Once a baseline is established, the user is asked to determine whether all shapes are the same as they rotate. If they are all the same, the user clicks a green button indicating so.

If a shape is different, the user clicks on that shape. The test records response times and accuracy.

Read More: Why Marijuana Impairment Testing Must Be Made a Priority in Workers’ Comp

“It allows an employer to know if an employee is not behaving in their normal range, but it can’t say why,” said Carol Setters, vice president of business development, Predictive Safety.

“They could’ve just smoked a joint out in the parking lot or they could’ve been up all night with a sick child.”

While it can’t isolate a source of impairment, a test result that’s not within an employee’s normal range can spark a conversation.

“That’s when a safety conversation ensues that allows a company to get to the bottom of it,” Setters said.

As research continues to develop an effective way of testing for cannabis impairment, Algire said companies are well advised to track what other states are doing regarding legalization of cannabis and recent court decisions related to cannabis in the workplace.

“It’s an ever-changing issue,” she said.

“The minute I think we’ve got something figured out, it changes.” &

Annemarie Mannion is a freelance writer. She can be reached at [email protected].

Why Insureds Might See an Uptick in M&PL Claims

George Schalick, Jr., Senior Vice President of the Management and Professional Liability Division, Philadelphia Insurance Companies

The current soft market might come as a bit of a surprise as it does not track with previous underwriting cycles and economic conditions. Afterall, many privately held and non-profit organizations struggled during the early days of the pandemic with shutdowns and rapidly declining revenues. But the Government assistance programs, like the Paycheck Protection Program loans, helped keep many afloat during the tough times.

“During COVID many organizations stopped doing business until they were able to sort out all of the health and safety challenges,” Schalick said. “They were forced to lock down, but then all the government assistance programs allowed them to keep people employed. The increased volume of claims we anticipated we would see coming from the lockdowns and restrictions that were imposed upon businesses in the U.S. didn’t manifest at first.”

“Just because there wasn’t an onslaught of reported claims at the beginning of the pandemic, doesn’t mean the circumstances that would give rise to a claim being reported didn’t occur. Courts and the judicial system were closed or slowed and now that they are back open, we’re starting to see the circumstances that occurred during the COVID lockdowns becoming claims today,” Schalick said. “Litigation is progressing.”

Added to the delayed pandemic litigation is a concern over newer claims that might be filed as the country inches toward an economic downturn. Though a recession was avoided in 2023, experts think a soft dip could occur in 2024, with 76% of economists saying there’s a 50% or less chance of an economic downturn this year — that almost always results in more management liability claims.

“During the Great Recession in 2008, we saw an almost immediate spike in claims because of the economic conditions and the pressure it placed on organizations. They were making personnel changes with significant belt tightening almost immediately.” Schalick said.

What’s in Store for M&PL Policy Rates in 2024?

Despite an uptick in claims and increased economic uncertainty, management liability rates haven’t increased, resulting in market-wide pricing levels that may not meet the increased pressure of rising settlements and jury verdicts.

“Rates are going the other direction and settlement values are not falling,” Schalick said.

The mismatch between rates, claim frequency and severity is, in part, because carriers experiencing the dramatic soft market in the public D&O market are seeking premium gain in the private and non-profit market.

“In the public company market, the rates have been decreasing significantly. The rates were increasing in the private, not-for-profit market, and rightfully so, but there’s a desire to supplement overall mid-size D&O for carriers who also write private not-for-profit, and they see that as an opportunity to aggregate premium,” Schalick said. “So the always competitive landscape in the private, not-for-profit market has dramatically increased in the last 18 to 24 months.”

Still, companies of all sizes and types should be concerned about management liability rates in the future. Legal system abuse is resulting in increases in both the amount of litigation and the size of verdicts plaintiffs are receiving.

Certain areas of the country are particularly vulnerable to this type of legal system abuse. As a result, insureds in these localities are likely to be vulnerable to rate increases.

“The environment is so positive for the plaintiff that forces premium increases so carriers are able to stay in that market long term,” Schalick said.

Why a Tenured Carrier Partner Can Help Insureds Navigate An Uncertain Market

It’s clear that insureds are facing an uncertain M&PL market over the next few years. Fortunately, carriers with a long history in the M&PL space will be there to offer stability.

Philadelphia Insurance Companies has been supporting this market for 35 years. PHLY is committed to offering long-term rate stability, even as economic and claims trends start to push premiums upwards. They have an appetite for all sorts of companies, large and small, for-profit and nonprofit alike.

“We’ve been at this game for a long time and are one of the most tenured underwriters in this space,” Schalick said. “We like to stay very consistent.”

PHLY has worked with both for-profit and non-profit on management liability policies. With dedicated M&PL teams throughout the company’s 13 regions, PHLY provides the support agents and brokers are looking for on behalf of their clients. The teams know their regions well and can respond to local trends. They’re also dedicated to making the renewal process as easy as possible for their partners and policyholders.

“We have real confidence in our results, so we focus a lot on making the renewal experience as painless as possible for all agents and insureds,” Schalick said.

The company is also investing in tools to help insureds avoid losses. Earlier this year, they launched a new online risk management platform, PHLYGateway, which offers resources for insureds on how to create an employee handbook and trainings on issues such as recognizing workplace sexual harassment and discrimination.

If insureds have questions, they can consult a Best Practices Help Line, provided via the platform. That way, they can get on the spot risk management guidance to help them prevent claims.

To learn more, visit: https://www.phly.com/mplDivision/managementLiability/default.aspx.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Philadelphia Insurance Companies. The editorial staff of Risk & Insurance had no role in its preparation.