Businesses typically spend heavily to defend themselves against state ballot initiatives that boost taxes or increase regulations. This year, businesses and industry trade groups are scrambling to oppose a new and increasingly worrisome movement sweeping the country—marijuana legalization. As rates of drug use among job applicants rise, and firms contemplate their potential liability from accidents caused by workers under the influence, industry is emerging as a key opponent of the campaign to “legalize it” in pivotal states.

In November, voters in ten states will get a say on whether to liberalize laws governing marijuana use. In Arizona, California, Maine, Massachusetts, and Nevada, full legalization is on the ballot. Much of the support for these initiatives comes from national groups like the Washington, D.C.-based Marijuana Policy Project and the New Approach PAC, which are funded by the likes of Napster co-founder Sean Parker and Cari Tuna, the wife of Facebook co-founder Dustin Moskovitz. In California, Parker has raised about $8 million for the pro-legalization campaign. Advocates are hoping this year to capitalize on the momentum generated by previous legalization victories in Washington, Oregon, Alaska, and Colorado. Polls show that a majority of Americans favor legalization. If all five legalization campaigns succeed in November, more than a fifth of the American populace will live in states where recreational pot use is legal.

One of the most contested battles is unfolding in Arizona. Advocates have targeted the Grand Canyon State for legalization because it borders Colorado, where voters passed an initiative to legalize pot in 2012. Big contributions from businesses have enabled opponents of the Arizona initiative nearly to match the more than $3 million that legalization supporters have thrown into the campaign.  Large donors to the anti-legalization campaign include Discount Tire—the Scottsdale-based owner of hundreds of tire-service centers across the country—Phoenix-based U-Haul, and the Arizona Chamber of Commerce. Also opposing legalization are trucking firms worried about impaired drivers, construction companies fearing on-site accidents, and hospitals and other health employers that regularly test job applicants for drug use.

Steve Sanghi, CEO of Chandler, Arizona-based Microchip Technology Inc., told the Arizona Republic that failed drug tests and absenteeism are a growing problem at the company’s Colorado facility. “I would never move my business from Arizona to Colorado today and wouldn’t expand the business in Colorado because of the problems they’re having,” Sanghi said. A Quest Diagnostics study found that the number of job applicants testing positive for marijuana increased by one-fifth in Colorado and nearly one-fourth in Washington after both states approved ballot initiatives legalizing recreational use. Staffing firm BBSI told the Tacoma News Tribune that the number of applicants failing drug tests has increased to 30 percent, from about 20 percent before legalization.

Legalization supporters in Arizona have adopted a slogan: Regulate Marijuana like Alcohol. Businesses say that’s misleading. Though the initiative doesn’t prohibit firms from banning marijuana from the workplace, there’s no legal standard in the ballot measure for what constitutes impairment. All states, by contrast, have laws on the books defining what constitutes impairment due to alcohol use, so that a worker who comes to the job drunk can easily be tested. While traces of alcohol disappear from the body rapidly, signs of marijuana use linger for weeks, making it more difficult to determine if a worker is actually impaired on the job. That leaves some business experts worried that firms will face difficulty firing workers for use of a legal substance. “We’re concerned about being able to run a drug- and alcohol-free workplace,” the head of the Arizona Builders Alliance told the Arizona Republic.

The legalization fight in Massachusetts appeared set to cruise to victory earlier this year. Polls showed a large majority of residents favoring legalization while businesses sat on the sidelines, reluctant to spend money on what seemed a hopeless crusade. In May, Governor Charlie Baker, Boston mayor Marty Walsh (a former trade union leader and recovering alcoholic), and Attorney General Maura Healey formed a bipartisan coalition to oppose the constitutional amendment. In a joint op-ed in the Boston Globe, they warned that legalization “threatened to reverse our progress combating the growing opioid epidemic.” Business jumped into the fray, including builders, retailers, and the state’s major medical institutions. Billionaire and Boston-native Sheldon Adelson has been a big contributor. The casino magnate—whose son died of a drug overdose—helped bolster the campaign with a $500,000 donation, and he has supported other opposition campaigns in Florida and Nevada.

In socially liberal Massachusetts, businesses fear that legalization would leave them stuck in a grey area. Marijuana remains illegal under federal law, and government rules require that federal contractors must have a drug-free workplace. That “creates numerous state versus federal legal conflicts, [which] would cause significant ambiguity for businesses to regulate a drug-free workplace,” the head of the Cape Cod Chamber of Commerce wrote in opposition to the legalization initiative.

Uncertainty about workplace effects has even sparked opposition to several medical-marijuana initiatives that businesses complain are too broadly written. The Arkansas Chamber of Commerce, hospitals in the state, and agricultural trade groups have all united to oppose the Arkansas Medical Cannabis Act. A clause in the measure could protect employees who use medical marijuana even if they showed up to work impaired. In other states, advocacy groups have fought to allow employees to use medical marijuana at work. In Ohio, businesses only lifted their objection to a medical-marijuana bill that passed earlier this year after the legislature added employer protections to the bill, including the right to maintain a drug-free workplace. That upset advocates. “One of the real weaknesses of this law that we had opposed all along was the fact that it really doesn’t make any allowances for people to use medical marijuana within the workplace,” a spokesman for the ACLU of Ohio told the press after Governor John Kasich signed the bill.

Similar restrictions on employers’ rights helped doom a 2010 legalization initiative in California. That initiative—which contained a clause prohibiting employers from disciplining a worker even if they could prove that using pot had impaired his performance—was leading in the polls until business groups rose up against it. Voters defeated it by a margin of 53.3 percent to 46.5 percent. This year, however, sponsors of Proposition 64 have been careful not to include that kind of a “poison pill” clause in their legalization initiative. Proponents also tout the $1 billion in new taxes that will potentially be collected from the pot industry. California businesses, facing other pressing issues, are largely sitting on the sidelines. Polls show that 60 percent of Golden State voters favor legalization. That leaves the opposition largely to social conservatives and public-safety organizations like the California Police Chiefs Association.

Beyond concerns about businesses’ liability under legalization are the larger social issues. As the New York Times recently observed, the legalization movement represents “a shot in the dark, a vast public health experiment” that would be “carried out with relatively little research on the risks.” In Colorado, for instance, pot-related emergency room visits jumped 30 percent during the 18 months following legalization, while ER visits by children related to marijuana have soared. Some recent research, moreover, suggests that marijuana is significantly more addictive than alcohol, contradicting other studies.

Supreme Court justice Louis Brandeis observed that the states are “laboratories of democracy.” Businesses are rightly worried that states’ latest lab experiment—marijuana legalization—will prove to be industry’s newest headache.

Photo by Sean Gallup/Getty Images


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