Business Ramifications of Legalized Marijuana: Trouble or Growth Opportunity?

By Renita Wolf, a Colorado-based financial executive and author

Though it seems unfathomable to the “Just Say No” generation, marijuana is legal, decriminalized or has medical status in 45 of our 50 United States. While the District of Columbia and states including Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington have legalized the drug within their borders, it remains illegal under federal law. Marijuana is classified as a Schedule 1 drug under the Federal Controlled Substances Act of 1970, which states that it has “no currently accepted medical use and a high potential for abuse.”

The sale and distribution of marijuana and related products are a growth business for those supplying the industry and its peripheral needs. However, not every company embraces legalization.

Legalized marijuana has caused a seismic shift in the workplace. Employers face hazy, uncharted territory, such as situations in which an employee might use marijuana for a medical reason or simply because “it’s legal” in their state. However, Occupational Safety and Health Administration (OSHA) regulations require employers to maintain a safe and healthy workplace that is free from dangers. Employees using marijuana can present safety problems, especially considering that:

• 8% of full-time employees and 11.5% of part-time employees in the U.S. admit to substance abuse
• 40% of workplace fatalities involve on-the-job substance abuse
• Roughly 35% of U.S. industrial injuries involve drugs or alcohol

Increasingly, employers in states where marijuana has been legalized are turning to employee drug testing to minimize substance abuse in the workplace. It’s a cost-effective measure that can increase workplace safety and productivity while lowering turnover, workplace injuries and absenteeism. There has been an exponential increase in the demand for drug screening services over the past 10 years.

Lynette Crow-Iverson is the owner of Conspire! in Colorado Springs, a company that provides pre-employment screening services for organizations to ensure they maintain safe and healthy work environments with a focus on industry compliance. As a third-party administrator for the Department of Transportation (DOT), the company prepares and monitors DOT’s drug-free policies. Conspire! also offers services such as wellness programs and DNA tests for those who want to know if they’re pre-disposed for disease.

Lynette answered questions about changes that have impacted her business since Colorado legalized marijuana in 2012.

Q: What business challenges and opportunities has your company experienced?

A: Legalization has made it difficult for employers to find and retain a quality workforce. At the same time, it has created an opportunity for us because we have more clients that are doing more testing, especially for safety-sensitive positions such as commercial driver’s license holders and other regulated positions. In addition to the traditional corporate setting, we’ve identified a variety of settings―including schools, drug court, and people receiving public assistance―where our services are needed. In response to this rapid industry growth, I have hired more employees, which has a positive impact on the economy and my business.

Q: What is the hardest thing that you deal with in your business?

A: It’s very difficult when a minor’s drug screen comes back positive. It keeps me up at night, thinking, “How can we do a better job of reaching our youth? How do we better educate parents and schools about the long-term effects of drugs?” That’s the hardest aspect of my job—worrying about ongoing societal ramifications. We offer training courses and seminars to help educate people and spread the word about the dangers of marijuana and other drug use; we can’t emphasize that enough in our schools.

Q: How do you strategize for continued growth?

A: We closely monitor industry trends, such as where legalization policies are headed, which states are likely to legalize next, and how the new presidential administration might impact legalization. We also remain keenly aware that marijuana is illegal at the federal level.

Q: As a company that helps other organizations hire a quality workforce, how do you ensure that you hire the right employees?

A: Hiring can be the most difficult part of managing a company. I’ve had the unfortunate experience of hiring people who were excellent employees for the first 90 days, and then changed their work habits once they became “permanent” employees. As a result, when I interview, I focus on soft skills—communication, teamwork, adaptability and conflict resolution. Learned skills can be taught, but work ethic and loyalty cannot be learned; they’re either ingrained in a person’s character―or not.

Read more about the burgeoning marijuana industry in an article by EO Seattle member Kevin Sullivan featured in our latest issue of Octane magazine.

Learn more about the Entrepreneurs’ Organization, the only global network exclusively for entrepreneurs. EO helps leading entrepreneurs learn and grow through peer-to-peer learning, once-in-a-lifetime experiences, and connections to experts.