Medicinal cannabis presents unique issues in managed care

July 4, 2013

Medicinal cannabis, despite its emerging popularity, presents unique issues to managed care and hospital decision makers. Exactly how does a quasi-legal substance, which has existed outside the sphere of mainstream medicine, become integrated into a traditional hospital and managed care setting?

Medicinal cannabis, despite its emerging popularity, presents unique issues to managed care and hospital decision-makers. Exactly how does a quasi-legal substance, which has existed outside the sphere of mainstream medicine, become integrated into a traditional hospital and managed care setting?

Cultural Emergence of Medical Cannabis

Suddenly, medical cannabis is pervasive in certain areas of the United States. While it is far outside the scope of this article, some background on recent developments is necessary to understand how the plant’s medical components are used. There are different varieties of cannabis (popularly called “strains”) that are developed by cannabis growers to feature various characteristics. Hybrid and new strains are constantly emerging, touted as helpful to a particular ailment by the grower.

Unfortunately, the recent explosion of medical cannabis has led to abuses by some growers who use pesticides or scent oils to improve appeal of their cannabis. If medical cannabis is to be responsibly administered in a hospital or managed care setting, attention must be made to the strain and potency and adjusted according to a patient’s needs, and testing of cannabis for strength and mold/pesticides by third-party laboratories should be used to ensure safe and accurate dispensation.

As a quasi legal substance, in addition to the variables presented in the strains, potency, and method of ingestion, medical cannabis remains an outsider when it comes to mainstream hospital and managed care. The common method of ingestion-smoking-is not tolerated inside a hospital. Thus, developments in the method of ingestion of medical cannabis appear, in my opinion, to be a prerequisite to mainstream use of medical cannabis in a hospital setting.

Emergence of Medical Cannabis

Many proclaim that cannabis will be legal for medicinal and recreational purposes in the reasonably near future. In states allowing medical cannabis, patients seek various strains of cannabis reported to be effective for a particular ailment. Cannabis concentrates, such as hash oil and wax, are used in “smoke-free” devices without flame, creating a “vapor” that is inhaled. Medical cannabis patients have their own particular strains that they choose and develop a preferred method of ingesting the medicine.

If a hospital or care facility allows use of medical cannabis, it is unclear at this time how the variety and dosage of medical cannabis is determined. In California, the physician prescribes cannabis use, and the patient is on his or her own to determine what strain to use, how to ingest the medicine, and where to obtain it. Suggestions to patients that lead to selection of a patient’s preferred variety of medical cannabis are typically made by the dispensary staff, based upon the available varieties and reported experiences of other patients. Each strain of cannabis has distinct features (color, density, smell), and potency varies depending upon where the harvest was made on the plant (closer to top center “main cola” is typically stronger than lower branches on cannabis plants).

Federal Law

At this time, there is no question that the laws concerning medical cannabis are unsettled. Cannabis is illegal under federal law as a Schedule I controlled substance. Any person using cannabis for medical purposes is in violation of federal law. Many do not realize that there are ongoing federal prosecutions in California of dispensary operators and landowners, notwithstanding strict compliance with state law. It was once thought that the federal government would avert its eyes from medical cannabis use in compliance with state laws-a notion propagated by memoranda from the Department of Justice. Property owners risk forfeiture actions, and dispensary operators who are convicted are being sentenced to federal prison.

The viability of medical cannabis in mainstream medicine remains doubtful unless the federal approach is softened to permit use in compliance with state and local laws. The argument has been advanced that research into effectiveness of medical cannabis is hampered by the Schedule 1 classification of cannabis. Certain cities rely upon federal enforcement to assist their local agencies with property seizure and forfeiture, with a portion of the proceeds going back to the city. It would appear that the dichotomy between federal laws and the laws of states allowing use of cannabis are at odds and must be resolved before significant progress can be made toward sensible medical cannabis laws that do not place patients and caregivers at risk of federal prosecution.

State Law

State laws vary widely, but, in recent years, many states have passed laws allowing medical use of cannabis under a physician’s prescription. In my home jurisdiction, the California Supreme Court recently held that state medical cannabis laws do not override local county and cities from establishing their own ordinance schemes regulating use of medical cannabis within their municipalities (City of Riverside v. Inland Empire Patients Health and Wellness Center [May 6, 2013, S198638]). California state law provides immunity from certain state laws governing use of controlled substances if the qualified patient or caregiver has a prescription for use of medical cannabis from a licensed California physician. This does not guarantee that a patient will be able to obtain medical cannabis, or lawfully cultivate it, under local laws.

In August of 2008, California’s Governor Edmund G. Brown (then Attorney General Brown) promulgated “Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use.” The guidelines were an attempt to ensure the security and non-diversion of cannabis grown for medical use. The 2008 guidelines were designed to ensure that marijuana grown for medical purposes remains secure and does not find its way to non-patients or illicit markets, in addition to helping law enforcement agencies perform their duties effectively and help patients and primary caregivers understand how they may cultivate, transport, and use medical marijuana under California law. The 2008 guidelines also discuss establishment of cooperatives or collectives, operated in a non-profit manner, and procedures to follow to help ensure cannabis is not diverted to illicit markets. The 2008 guidelines have been reviewed and judicially ratified by several appellate courts.

Local Municipal Law

In California, there are several approaches taken by counties and cities concerning regulation of medical cannabis. It is important in California to recognize what ordinance framework a particular municipality has adopted. There are many cities and counties that have adopted a total ban of medical cannabis dispensaries. Each jurisdiction uses its inherent power to enact zoning and business regulation laws concerning the use of land and buildings.

Total Ban Approach

In some jurisdictions, any storage or cultivation of any quantity of medical cannabis is deemed a nuisance under municipal law, subjecting the dispensary and property owner to a nuisance abatement action. I represented a medical cannabis collective based in the City of Agoura Hills, where the right of the city to enact a total ban of all cannabis use, including personal use and home cultivation, was upheld by the Second District of the Court of Appeal (Conejo Wellness Center v. City of Agoura Hills [2013] 214 Cal. App. 4th 1534). In a “total ban” jurisdiction, use of cannabis at a hospital or managed care facility would subject the facility to closure via a nuisance abatement action.

Personal Use Only Approach

Some jurisdictions allow individuals to possess, cultivate, and use medical cannabis in limited quantities provided that they cultivate it themselves. Many localities have tacitly adopted this framework even though the letter of their municipal law states all use of cannabis is forbidden. In these jurisdictions, it is not possible to lawfully dispense or obtain medical cannabis, and use of cannabis at a hospital or managed care facility would subject the facility to prosecution as a nuisance.

Dispensary/Collective Ban Approach

For example, the City of Pomona banned medical marijuana dispensaries, but, by definition, a “medical marijuana dispensary” does not include a licensed clinic, health-care facility, residential care facility for people with chronic life-threatening illness or the elderly, or a residential hospice. Within this framework of local laws, permission is given to certain licensed facilities to provide medical cannabis to patients. However, there is no clear provision as to where and how medical cannabis is obtained by patients and caregivers. In some of these jurisdictions, the city code is silent as to personal use of medical cannabis, presumably allowing it so long as it is otherwise lawfully obtained.


The emergence of medical cannabis as an alternative to mainstream medicine cannot be denied. Yet, a hospital or managed care facility may place itself at risk of legal prosecution, or possibly even federal intervention, for obtaining the medicine and administering or dispensing it to a patient. The inconsistent patchwork of state laws cannot succeed without cooperation from the federal government by way of a stand-down of prosecuting medical cannabis use by those abiding by state and local laws.



Mr Hodge

Mr Hodge is a California civil litigation attorney whose 20-year practice includes representation of businesses, landowners, and individuals related to medical cannabis, including state/local compliance, land use and zoning, landlord/tenant issues, and property matters.