The American landscape of marijuana regulation is undergoing its most significant transformation since the Controlled Substances Act of 1970. Nearly half of U.S. states now permit recreational use, and in the recent election, Nebraska became the 39th state to legalize cannabis for medical use. These milestones, coupled with the DEA’s proposed rescheduling of marijuana from Schedule I to Schedule III status, signals a fundamental shift in how the nation approaches both recreational and medical marijuana use.
A Complex Legal Landscape
The current regulatory framework presents a study in contrasts between state and federal approaches. While 24 states now permit recreational marijuana use and 39 allow medical use, the specifics of these programs vary significantly. Some states, like Ohio, permit home cultivation, while others maintain strictly controlled medical-only programs. This diversity in state approaches creates significant challenges for employers operating across state lines and workers’ compensation systems attempting to establish consistent policies.
The DEA’s proposed rescheduling represents a potential breakthrough in federal policy. Moving marijuana to Schedule III would acknowledge its accepted medical use and recognize its lower abuse potential compared to Schedule I substances. This change would remove key banking restrictions and facilitate expanded research opportunities. The rescheduling process is currently underway and requires White House Office of Management and Budget review. After that, it must go through a 60-day public comment period and administrative judge review before final publication.
Workers’ Compensation at a Crossroads
State courts have grappled with the question of medical marijuana coverage in workers’ compensation claims, reaching divergent conclusions. The New Jersey Supreme Court’s 2021 decision in Hager v. M&K Construction required employer reimbursement for medical marijuana expenses, while Maine’s highest court reached the opposite conclusion in the case Gaetan H. Bougoin v. Twin Rivers Paper Company, LLC et al., citing federal prohibition. In May of 2024, the Minnesota Supreme Court ruled that workers’ compensation doesn’t cover medical marijuana because the drug remains illegal under federal law, thus overturning previous decisions by the state that ordered employers to cover the costs of medical marijuana for the treatment of work-related injuries. These are but a few examples of state-specific rulings. The proposed federal rescheduling could prompt reconsideration of precedents that cited federal prohibition as a barrier to coverage.
Workers’ compensation payers face mounting pressure to develop comprehensive approaches to medical marijuana coverage, establishing protocols for evaluating medical necessity, authorizing treatment, and processing payments while maintaining workplace safety standards. The development of appropriate drug testing protocols and risk assessment guidelines presents particular challenges, as traditional impairment measures may not adequately address marijuana use.
The Clinical Perspective
Research on marijuana’s therapeutic applications has been severely limited by its Schedule I status. However, in a notable 2015 study by Whiting et al., researchers found moderate-quality evidence that cannabinoids effectively treat chronic pain and muscle spasticity, with some trials showing approximately 40 percent higher odds of pain improvement compared to control groups. Some research also suggests marijuana could help reduce opioid dependence, a critical concern in workers’ compensation cases.
While these results are promising for conditions like chronic musculoskeletal pain, neuropathic pain, and post-surgical pain management, more comprehensive medical science is still needed, including on the potential to help patients with mental health issues, including PTSD.
The proposed Schedule III reclassification would expand research opportunities beyond the current narrow parameters. Major medical centers are already preparing expanded clinical trials focusing on precise dosing protocols, drug interactions, and long-term outcomes. These studies will be particularly valuable for developing evidence-based guidelines in workers’ compensation cases.
Looking Forward
The convergence of state-level legalization, federal rescheduling, and evolving medical understanding creates both opportunities and challenges for workers’ compensation systems. Payers must develop policies that balance patient access to effective treatment with workplace safety requirements in accordance with state regulations. The banking sector’s ability to process marijuana-related transactions would significantly streamline administrative procedures, while expanded research opportunities could lead to more standardized treatment protocols.
As the legal and medical landscapes continue to evolve, the development of standardized treatment guidelines, workplace safety protocols, and interstate commerce regulations will be crucial. The insurance industry must simultaneously work to standardize coverage, contain costs, and manage risks in this rapidly changing environment.
The success of these efforts will ultimately depend on finding the right balance between patient care, workplace safety, legal compliance, and administrative efficiency. As more states consider marijuana legislation and federal policy continues to evolve, the workers’ compensation system will continuously need to adapt to meet these new challenges while maintaining its fundamental mission of supporting injured workers’ recovery and return to work.
* Note: Due to the rapidly evolving nature of this topic, readers should verify current clinical studies, laws and regulations in their jurisdiction.