Ending The Drug War Is Good For Workers

A new study shows cannabis legalization is linked to a huge drop in workers’ comp claims

This report was written by Joel Warner

After being prohibited for most of the 20th century, the U.S. decriminalization of cannabis over the past several decades has ushered in a variety of positive outcomes. To date, 36 states and the District of Columbia have approved cannabis for medical use, and 15 states plus D.C. have legalized the drug for recreational purposes, and such laws have been found to improve the economy, repair the racist harms of the drug war, discourage criminal activity and unsafe products, and even possibly reduce teen drug use and vehicle deaths.

Now, a new study suggests cannabis legalization could offer another major benefit: Recreational cannabis laws appear to lower work-related injuries and disabilities to such an extent that states have seen a 20 percent reduction in workers’ compensation claims after legalizing adult-use cannabis.

The findings could help bolster a push to legalize cannabis nationwide, one of the few issues that currently enjoys broad bipartisan support, as well help reform austere workplace cannabis rules across the country. Right now, even in most states that allow recreational or medical cannabis, employees can be fired at will or lose workers’ comp benefits if they are found to be using cannabis in their off hours.

“The Magnitude Was Surprising”

The study from researchers at William Paterson University, the University of Cincinnati, Temple University, and the RAND Corporation examined workers’ compensation benefits in states across the country from 2010 to 2018, based on data from the U.S. Census Bureau’s Annual Social and Economic Supplement, which tracks income and poverty levels. They limited their analysis to adults ages 40 to 62, since they determined older adults would be more likely to turn to cannabis for medical and therapeutic reasons. Even though they expected to see some influence of cannabis laws on workplace injuries and resulting benefits, the extent of that impact caught them slightly off guard.

“The magnitude of the effect might have been a little bit surprising,” study co-author Rahi Abouk told The Daily Poster. “We saw a 20 percent decline in the propensity of submitting a workers’ compensation claim in states that had passed recreational marijuana laws.”

The team discovered the average amount of workers’ compensation disbursements in these states dropped by a similar percentage, with average payments declining by $21.98. They also found other potential workplace benefits tied to cannabis legalization. On average, they concluded that states that had passed recreational marijuana laws saw a 5.4 percent decrease in workplace injuries and a 6.2 percent reduction in reports of work-limiting disabilities.

While fear of employer reprisals for cannabis use could discourage people from drawing attention to themselves by reporting injuries, thereby potentially reducing workers’ comp claims in states where people are allowed to use cannabis, Abouk does not believe such circumstances explain the sizable drop they saw in workers’ comp benefits. In fact, he thinks zero-tolerance cannabis workplace rules might be keeping workers’ comp numbers from declining even further, by discouraging overall cannabis use.

“Some workers who would otherwise use marijuana (medically or recreationally) following [a recreational marijuana law] adoption may be deterred from using this product for fear of job loss, not just applying for workers’ compensation claims,” said Abouk. “If we did not have these zero-tolerance policies, the increase in cannabis use would have been higher, as well as the decline in [workers’ comp].”

Instead, he and his colleagues attributed the decline in workplace injuries and workers’ comp benefits to people using cannabis to manage ailments that could impact their ability to work, such as insomnia, nausea, mental health problems, and, in particular, chronic pain. At the same time, people appear to be turning to cannabis to avoid using opioids, thereby reducing the disastrous impacts opioid addictions can have on populations and workforces.

“Given that cannabis is used as a pain medication, it’s a good substitute for opioids,” said Abouk. “If people use cannabis, we might be able to get rid of some of the negative labor-market outcomes of opioids.”

The impact of cannabis reducing work-related injuries and disabilities could be far-reaching. Allowing older adults to remain healthy and active in the labor market could help them improve their earning capacity and quality of life. It could also lead to significant cost reductions for employers, workers’ comp insurers, and Social Security programs. According to the National Academy of Social Insurance, in 2018 alone, companies spent just under $100 billion on workers’ compensation claims.

Protecting Workers’ Right To Legal Cannabis

The researchers’ findings could spur movement in one area that has been notoriously slow to reflect shifting perspectives on cannabis use: workplace treatment for those who use the drug legally.

Because cannabis is still federally illegal, those who use the drug for medical reasons are not protected by the Americans with Disabilities Act. Instead, individual states are allowed to determine whether workers can be fired or denied benefits based on cannabis use – and so far, most states have refused to protect employees’ legal right to cannabis. Currently, only 12 states have some form of anti-discrimination employment law on the books for medical cannabis, and many of the states most recognized for cannabis reforms, such as California, Colorado, and Oregon, don’t protect workers from cannabis-based employment discrimination at all.

Progress on the matter has been similarly stymied in the courts. Last year, judges in Delaware and Massachusetts found employers don’t have to cover medical cannabis as part of their workers’ compensation benefits, even where such use is legal under state law.

But findings like those in the new paper that suggest cannabis could improve worker productivity and reduce workers’ comp claims could go a long way to encouraging employers to look more favorably on off-duty legal cannabis use. There are already signs that judges and lawmakers are coming around on the issue. In September 2020, a federal district court in Pennsylvania found in favor of a woman who wanted to sue her employer for firing her over a positive cannabis test, finding that the state’s anti-medical cannabis discrimination law allowed workers to take such actions against their employers. And currently, lawmakers in New Jersey are considering a law that would require companies and workers’ compensation insurers to cover the cost of medical cannabis.

The potential workplace benefits of legalized cannabis could also be used to further efforts this year to end cannabis prohibition once and for all. Earlier this month, Senate Democrats, including Senate Majority Leader Chuck Schumer, Ron Wyden and Cory Booker, signaled they would soon release draft legislation to reform federal cannabis policy. That legislation would likely seek to reschedule or remove cannabis from the federal Controlled Substances Act, which would therefore presumably protect medical cannabis patients from employment discrimination under the Americans with Disabilities Act.

As the senators noted in a joint statement, “We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies.” That could very well include undoing policies that have kept workers from using cannabis in their off hours in ways that could help them do their jobs.


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