Legal Marijuana – An Unforeseen Risk

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Colorado,drug policy Washington and the District of Columbia have legalized the recreational use of marijuana, and other authorities are considering making the same change. Firestorm has discussed some of the risks associated with legal marijuana, but recently, Colorado employers have been experiencing an unintended consequence (and risk) associated with legal pot.

Numerous small businesses throughout the state have begun posting signs proclaiming “Hiring,” “Positions Available” and similar notices. Larger firms have also become active in hiring. At the same time, the economy in Colorado is not growing any faster than the national economy (except, of course, in the recreational marijuana business). What’s happening?

First, recall that the legalization of marijuana in Colorado did not change, in any way, the right of employers to establish and enforce a marijuana-free (or alcohol-free) business. Secondly, recall that marijuana ingredients remain in the bloodstream significantly longer than do the visible effects of smoking marijuana (and much, much longer than does alcohol). Employers are finding that significant numbers of prospective employees are testing positive for marijuana use, and the employers are rejecting these candidates. With this increased candidate-rejection rate and no significant increase in the number of candidates, employers (of all sizes) are finding it increasingly difficult to find and hire qualified, drug- (including marijuana-) free candidates.drug alliance 2

This poses a risk to the long-term viability of businesses. While it may seem to be a tired, old adage, people are a business’ most important resource. Without this resource, businesses will find it difficult to build their reputation through customer service and satisfaction and even more difficult to grow their business.

The reduction in the size of the qualified candidate pool for hiring has several ripple effects:

  • It can take more time and more effort (read that as dollars spent) in finding, screening and hiring qualified candidates
  • It can force an escalation in the pay needed to attract qualified candidates from a more limited pool, creating price/earnings issues
  • It can result in hiring less qualified candidates with the ensuing risk of poorer customer service or higher manufacturing defect rate – both of which are costs to the company
  • It can result in poorer administrative performance resulting from lower quality employees or from additional work being levied on a smaller workforce
  • It can even result in compliance issues as employers are forced to reallocate their smaller or lower quality workforce across the same or greater workload

It’s also important to recognize that these issues are only the first-order effects and that there will almost certainly be second- and third-order effects that are presently unforeseen.

help wantedEmployers need to consider the issue of a reduced candidate pool for future hiring, predict the impacts of that reduced candidate pool, plan to mitigate those impacts and then implement their plans. They need to also consider the impact of this risk on their suppliers and vendors – the reduction in the pool of qualified and drug-free job candidates is no less a problem in your supply chain than it is in your company.

This is a serious risk and one that has potential ramifications in EEO compliance, government contracts and corporate reputation to name but a few. Addressing this risk will require a multi-discipline effort with companies to ensure that all the subsidiary risks are included in mitigation plans.

Image Credits: Darrin Harris Frisby/Drug Alliance ; Darrin Harris Frisby/Drug Alliance; Coolworks.com respectively

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