Federal COVID-19 Vaccine Mandate: What Cannabis Companies Should Know Ahead of Official Regulations
Photo courtesy Jushi

Federal COVID-19 Vaccine Mandate: What Cannabis Companies Should Know Ahead of Official Regulations

OSHA is expected to issue a rule in the coming weeks to implement the Biden administration’s requirement that all employers with more than 100 employees mandate vaccinations or weekly testing.

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October 20, 2021

Last month, President Joe Biden announced sweeping new COVID-19 vaccination requirements that will impact countless businesses and employees across the country, and the cannabis industry is no exception.

Biden said Sept. 9 that all employers with more than 100 employees must require their workers to be vaccinated or undergo COVID-19 testing weekly, as reported by AP News. The administration’s mandate also requires all executive branch employees and contractors who work with the federal government to be vaccinated, with no option for regular tests.

The Occupational Safety and Health Administration (OSHA) is expected to issue a rule in the coming weeks to implement the requirement for larger companies to mandate vaccinations or weekly COVID-19 testing.

“OSHA is going to draft that rule, and it’s what they call an ETS, an emergency temporary standard,” Ruth Rauls, partner at Saul Ewing Arnstein & Lehr, tells Cannabis Business Times and Cannabis Dispensary. “It allows them to put it into place without having a review and comment period, which is usually what happens. That ETS is going to come out sometime in the next couple of weeks, so there’s been a lot of speculation as to what that’s actually going to mean and all the questions that come along with it.”

OSHA sent a draft rule to the White House last week for review, Rauls says, but it is unclear when the rule will be approved and implemented. Once a formal regulation is issued, employers will have more guidance on what they need to do moving forward, and Rauls said cannabis companies are no different from businesses in other industries when it comes to compliance.

“The cannabis industry is … just like any other employer when they’re trying to manage this,” she says. “It’s looking at their employee base, where they’re working, and taking steps to make sure that … they’re complying with what OSHA says and that they’re providing a safe workplace for their employees. I think that’s the goal of everybody, and they just have to figure out how to get there and comply with this new rule.”

RELATED: How Should Cannabis Businesses Handle the COVID-19 Vaccine?

Rauls adds that cannabis companies—many of which were deemed “essential” in the early days of the pandemic—have been grappling with COVID-19 safety protocols for a while now, especially since the supply chain, from cultivators to processors to dispensaries, largely requires employees to work on-site and close to one another.

“I would say a lot of them probably have been dealing with some piece of it, and this is going to be a little bit more specific in terms of what they have to do,” she says.

Unanswered Questions

Rauls has heard many questions from Saul Ewing’s clients about the federal vaccine mandate, many of which she hopes will be answered by OSHA’s forthcoming rule.

First and foremost, many companies are wondering how they should calculate their total number of employees to determine if they have 100 or more, Rauls says.

Who will pay for the weekly testing for unvaccinated employees is another common concern, she adds.

“From all [the] indicators that we’ve seen, that cost is going to be most likely absorbed by the employer,” Rauls says. “I think something that people in the industry or employers generally should be looking at is, if we’re going to mandate vaccines or testing, what impact to our bottom line is weekly testing going to be if we have a significant number of employees who are not vaccinated, and how long can we bear that financial cost before we have to move to a complete mandate on the vaccination side? That’s definitely something I keep hearing a lot from clients in the space.”

Rauls recommends that companies find out exactly how many of their employees are vaccinated—and how many remain unvaccinated—to help them determine how the federal mandate will impact their operations.

“Just having an idea of where your employee population is in terms of vaccinated or not is always very, very important,” she says. “Once you have that, you can make a decision on how you want to move forward in terms of vaccines, testing, and [providing] education and … support to employees … and access to help assist with the process.”

Companies should have written policies in place to lay out the specific details of their COVID-19 vaccination and testing requirements, Rauls adds. These policies should cover how employers will collect proof of vaccination, how that information will be kept confidential and how testing will be conducted.

"Are we going to be providing the tests? Can they go get the tests? How are they going to turn in the results?” Rauls says. “Then, what happens if you’re not vaccinated and you have to take a test and you don’t turn in your results? Not a negative test or a positive test, but you just don’t do it—what are the repercussions for that? Is there going to be discipline, and what kind of discipline is it going to be? Laying that all out for employees so they have a clear understanding of what the guardrails are going forward is very, very important.”

Also important, she adds, is how companies will implement policies regarding COVID-19 vaccination and testing for customers and clients.

“When we’re talking about vendors and contractors that are providing services, the general school of thought is yes, you can require vaccination or testing,” Rauls says. “When we’re talking about customers, it’s really more of a state-by-state issue. … It’s really important to look at what the state rules are and what executive orders might be in place when we start talking about how we’re going to deal with customers and clients.”

Policies Already in Place

Jushi, a vertically integrated, multistate operator, implemented its COVID-19 vaccination policy about a month or so before Biden’s announcement, Nichole Upshaw, the company’s EVP of HR, tells Cannabis Business Times and Cannabis Dispensary.

Jushi has operations in California, Nevada, Ohio, Illinois, Virginia, Pennsylvania, Massachusetts, New York, Florida and Colorado, and maintains roughly 1,150 employees across its corporate, cultivation/processing and retail staff.

Over the past several months, Jushi has focused on educating its workforce about the COVID-19 vaccine, Upshaw says.

“Jushi, like many other cannabis companies, has pharmacists on staff,” she says. “We utilized them to educate our population and answer questions.”

Next, the company started incentivizing its employees to get vaccinated. Those who receive the first dose of the vaccine can receive a $35 Amazon gift card or a product from one of Jushi’s dispensaries. After the second dose, the same offer is extended again.

Upshaw says the incentive program “went a long way” in increasing the vaccination rate among Jushi’s workforce, and the company then decided to require its corporate staff to get the vaccine or undergo weekly COVID-19 testing.

Before the mandate, roughly 20% of Jushi’s corporate staff remained unvaccinated, and now that the requirement has been in effect for over a month, only 10% of corporate employees are opting for weekly testing over vaccination.

Jushi is not covering COVID-19 testing for the corporate employees who have opted to test instead of receiving the vaccine, Upshaw says, and although the company has not yet provided on-site vaccinations, she has researched ways to offer them.

“For our corporate staff, it’s just so few people who aren’t vaccinated that they wouldn’t come out and do that, and we’re pretty sure that wouldn’t be a motivator for those who are not vaccinated on our corporate staff,” she says. “Being in cannabis [with] the indoor facilities … regulated, having non-badged, non-employees on site to do vaccinations hasn’t seemed like a viable option for us at this point. But we do continue to keep an eye on what options are out there and … we would consider it, but it just hasn’t operationally been something we think we can do at this time.”

Photo courtesy of Jushi
Jushi requires its corporate staff to receive the COVID-19 vaccine or undergo weekly testing. The company incentivizes employees at its cultivation/processing and retail facilities by offering Amazon gift cards and items from the dispensaries to vaccinated workers.

Jushi has communications boards and TV screens at its retail locations where the company displays information about its COVID-19 policies. 

“Of course, our current staff knows what’s out there and what the policy is, but we also make sure in the recruiting process that we share what our policy is and then what incentives they can receive if they are already vaccinated or if they get vaccinated after they join us,” Upshaw says. “You never rely on one thing. … You share the message in as many ways as you can to make sure it reaches everyone.”

Upshaw adds that Jushi follows the law when it comes to medical exemptions from vaccine mandates. Although none of its employees have requested a medical exemption to date, the company has a reasonable accommodation form in place in case someone does.

“Then we saw the Biden announcement come out, and we’ve just been watching and waiting like everyone else,” Upshaw says. “Of course, we are forever rule followers in cannabis, so we will absolutely follow whatever rules are placed in front of us. If we were to assume it’s what Biden said, that’s exactly what we’ve done with the corporate staff. So, it wouldn’t be strange to us or unfamiliar since we’ve done that already.”

In the meantime, Jushi requires employees across all its facilities to wear masks, regularly wash their hands and maintain social distancing.

“We are still doing things that we know we can do to keep our employees safe and our customers and patients safe that shop with us,” Upshaw says. “We’re still abiding by all of those CDC guidelines that are established and not letting up.”

Potential Pitfalls

From legal challenges to difficulty sourcing COVID-19 tests for unvaccinated employees, Rauls says there are many potential pitfalls that companies should look out for when OSHA’s rule is released.

“There’s definitely going to be litigation about the ETS as a whole,” she says.

As of Sept. 16, 24 states were threatening legal action against the federal vaccine mandate, according to U.S. News & World Report.

On the business level, Rauls says courts have so far upheld employers’ rights to require vaccinations for their employees.

“The only decision that I’m aware of where the court said, ‘No, this isn’t OK’ was in New York, and that’s where they didn’t provide exceptions for medical or religious exemptions,” Rauls says. “[The court] said, ‘No, you can’t do that. You have to at least allow people to ask for that exemption if there’s a medical basis or there’s a religious exemption for it.’”

Aside from legal challenges, companies could also face a shortage of COVID-19 tests for their unvaccinated employees, who would be subject to weekly testing under the federal mandate.

“It’s going to be very difficult to source tests for employees once everybody’s employees have to start taking tests,” Rauls says. “I spoke with clients and a lot of times, it’s already an issue. As they’re trying to prepare, … they’re having a difficult time finding them already. I think that’s just a logistical issue that may wind up pushing more employers, including those in the cannabis space, to just require vaccination because it will eliminate all of the logistical concerns with the testing."