Loophole for Unwary Employers in the Cannabis Business Could Leave Them Bankrupt

As the recreational marijuana industry continues to expand, more and more employees could be exposed to secondhand marijuana smoke in quantities that could compromise their health. Employers will be shocked when learning they've been cited by Cal/OSHA for violating new regulations that are being explored. These violations is could lead to workers compensation claims and worse, result in a steady downward financial spiral that leads to bankruptcies.

As the marijuana industry flourishes, Labor Code 147.6 mandates that Cal/OSHA begin to explore if specific requirements are needed to address exposure to secondhand marijuana smoke by employees at facilities where on site consumption of marijuana is permitted.

According to Anthony McClaren, Head of Labor and Employment at ADLI Law Group, the outcome of this mandate could result in an employer finding him or herself on the receiving end of an OSHA violation and in a loophole that can put an employer in a very compromising position.

“If a cannabis business receives an OSHA violation, this can potentially be converted too easily into a serious and willful workers compensation violation, and thereafter into a hefty and possibly bankrupting negligence claim,” said McClaren.

McClaren explains that a potential violation can be used as a back door by a plaintiff to depose the employer, obtain a variety of company documents, and get a “sneak peek” into the operations of an employer and leverage any other “dirt,” without having to face the hurdles of the Civil Discovery Act.

This loophole into discovery could pose a serious threat to employers and leave a company in serious financial trouble.