Small businesses are the life blood of Arizona business, and every day the nearly 500,000 Arizona small businesses struggle to provide goods/services, pay employees, provide benefits and make a profit. It seems that more small businesses would benefit the Arizona economy.
Proposition 205, Regulation and Taxation of Marijuana, would legalize the sale of recreational marijuana in Arizona, which would bring many new small businesses into the marketplace. Although many of these new businesses would be small businesses, ASBA believes the potentially overwhelming risks and costs to existing small businesses in Arizona far outweigh ASBA’s support of these new small businesses.
The risks to small business include increased costs for workers’ compensation insurance, liability insurance, and litigation, and increase the difficulty in managing employees. Worst case scenario from these additional cost burdens might force a small business to close.
There are too many unknowns about recreational marijuana, both clinically and from the Colorado experiment. For example, unlike alcohol, no standard of impairment has been established medically, nor has one been adopted, albeit arbitrarily, in Colorado.
“Alcohol has a .08% blood alcohol content standard of impairment,” said Jack Lunsford, ASBA’s Interim CEO, “a standard which has scientific backing, is understandable, and has been adopted by everyone.”
The lack of an impairment standard for marijuana use makes it difficult for employers to determine if an employee is impaired on the job, or if an accident on the job was the result of recreational marijuana use then or from previous use. As a result, defending against potential employment claims by employees resulting from disciplinary action is tenuous at best.
“Small business employers who believe an employee is marijuana-impaired and takes an action against that employee will quickly become the target of legal action.” Lunsford said.
He further explained such legal action could disproportionately impact and harm small businesses that don’t have the financial resources larger businesses have to fight/litigate such cases, which could dramatically harm the small business and possibly lead to the businesses closing.
The Prop 205 measure would also dramatically increase small business worker’s compensation and liability insurance costs, because it will be difficult for insurance companies to rate the risks so premiums will increase to adjust for the unknown number or amounts of claims.
“It’s all about the potential increase of costs and regulations on small businesses,” Petra said. “Very simply, legalization of recreational marijuana would dramatically increase small business worker’s compensation and liability insurance costs.”
Compounding the legal matters for small business employers – likely increasing them – is Prop 205’s establishment of unwarranted and unfair job protections for employees who use marijuana compared to those using alcohol. Such protections create more difficulty in managing employees and could also increase job claim actions.
Certain employee job protections are necessary,” Lunsford explained, “like for safety. But these new protections have the potential to undermine other safety protections. Until all of the issues are ferreted out with regard to legalized marijuana, Arizona should not begin the experiment.”
Small businesses are burdened with regulations and they don’t need any additional rules and regulations foisted upon us making it more difficult for them to stay in business and grow, Lunsford said.
Nick Petra closed with the reminder that if Prop 205 passes this poorly written initiative is subject to Arizona’s Prop 108, which means the Legislature can’t change it unless to make it better.
“Now that’s scary,” Petra exclaimed! uu