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Director of National Intelligence Issues “Clarifying Guidance”: Cannabis, Cannabis Investments and US Security Clearances In light of the recent wave of states legalizing cannabis, the Director A federal agent, who worked a large portion of his almost 30 years as a federal employee with the Department of Homeland Security, was recently fired. The reason for termination: use of CBD oil. Isn’t CBD oil legal? In most cases, yes. However, federal agencies are lashing out at workers who use the product. CBD Following is recent guidance from the Office of the Director of National Intelligence addressing the impact of using marijuana or CBD-related products and

Director of National Intelligence Issues “Clarifying Guidance”: Cannabis, Cannabis Investments and US Security Clearances

In light of the recent wave of states legalizing cannabis, the Director of National Intelligence (DNI) recently released “Clarifying Guidance” on how the personal use of cannabis, hemp-derived cannabidiol (CBD) products, and investments in cannabis-related companies may impact an individual’s security clearance eligibility. As many readers of this blog know, the United States government grants security clearances to individuals who are employees of the US government, of US government contractors, or others involved in activities relating to the US government. Such clearances are a prerequisite to obtaining access to national security information. How much clarity the guidance provides is—like the area of law it governs—not entirely clear.

The short memorandum begins with a brief introductory reminder—violating federal laws “can raise concerns” regarding security clearance eligibility. Cannabis use is illegal under federal law, even when permitted under state law, and raises concerns about an individual’s willingness to abide by federal law under the national security directive governing issuance of a security clearance. The memo notes multiple times, however, that previous disregard of federal laws pertaining to marijuana is “relevant,” but not “determinative.” Agencies are required to employ a “whole-person concept.” Under this standard, agencies weigh a number of factors to determine security clearance eligibility, taking into account a holistic picture of the applicant.

The memo addresses three specific areas related to cannabis: (1) recreational use; (2) use of CBD products; and (3) investments in cannabis companies.

First, past recreational marijuana use is relevant but not determinative for security clearance eligibility and can be mitigated under the “whole-person” approach that guides clearance determinations. Specific behaviors are viewed in light of mitigating (as well as aggravating) factors. For past recreational marijuana use, these include frequency of use, the likelihood of recurrence, and whether the applicant signs an attestation or provides other support demonstrating that future use is unlikely. Although the guidance does not mention medical use of marijuana, it presumably applies to it, as well, as such use can also violate federal law even if permitted in certain states.

Second, the use of CBD products risks tripping up a holder of or an applicant for a security clearance. Although Congress legalized hemp and its derivatives such as CBD in 2018, use of products containing these substances could result in a positive drug test. Under the 2018 law, hemp and its derivatives must not contain more than 0.3 percent delta-9 tetrahydrocannabinol (THC)—the psychoactive ingredient in cannabis. Because THC is a naturally occurring substance in hemp plants, many hemp-derived products contain traces of THC, which could show up on a drug test. In addition, an individual inadvertently could purchase a product that exceeds the 0.3 percent THC limit. The guidance notes that there is no federal system for testing and certifying the percent of THC in hemp and CBD products. Many states impose such requirements, but those laws are not uniform and some products labeled as below 0.3 percent THC have tested much higher.

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A 2019 Department of Energy administrative appeal decision illustrates the risks in using CBD products. There, a security-cleared employee failed a marijuana test. In defending his clearance, he admitted using CBD oil for joint pain but believed the use was legal under federal law because the product was labeled as containing less than 0.3 percent THC. He had consulted with both his doctor on the health benefits and the medical staff at his place of employment on his employer’s drug policy. Five days after starting the oil at only half the recommended dose, he failed a random drug test and his clearance was suspended. His clearance was eventually reinstated based on his written promise never to use CBD-oil products again, but only after a lengthy unpaid leave and appeals process.

Finally, knowingly investing in a cannabis-related business is likewise verboten. The memo makes a distinction between “direct” and “indirect” investments and notes that divestment is a mitigating factor. Per the memo, direct investments indicate the investor knowingly is facilitating violations of federal law and therefore reflect poor judgment and an unwillingness to comply with the law. On the other hand, indirect investments, such as through a mutual fund traded on a US exchange, receive a presumption that the investor did not knowingly invest in a marijuana-related business. It remains unclear, though, how this presumption could apply to investments in mutual funds or ETFs that overtly focus on marijuana businesses, including such artfully tickerized offerings as AMREX, MJ, YOLO, POTX, CNBS, THCX, and TOKE.

Overall, the DNI’s guidance seems to raise the prospects of approval for security clearance applicants who previously have used marijuana or use hemp products with less than 0.3 percent THC, while reminding applicants that marijuana use remains illegal under federal law and discouraging investments in cannabis businesses.

One point is clear: for those interested in obtaining (or retaining) a security clearance, ceasing involvement with anything marijuana-related is a good idea. While an applicant’s past actions will not automatically disqualify her from obtaining a security clearance, the determination depends on an evaluation of the “whole person” in which ongoing use is a significant factor weighing against the clearance.

At Arnold & Porter, our attorneys regularly assist clients in navigating the sometimes opaque area of security clearance determinations and conflicting state and federal laws. For questions about security clearance applications and adjudications and related matters, please reach out to the authors or any of their colleagues in Arnold & Porter’s Government Contracts & National Security practice group.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

Federal agent loses job after using CBD for chronic pain

A federal agent, who worked a large portion of his almost 30 years as a federal employee with the Department of Homeland Security, was recently fired. The reason for termination: use of CBD oil.

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Isn’t CBD oil legal?

In most cases, yes. However, federal agencies are lashing out at workers who use the product. CBD products often contain tetrahydrocannabinol (THC). As a result, use of the product can trigger a positive drug test for use of marijuana.

Conventional drug testing cannot distinguish between THC from marijuana use or CBD products. This is because conventional testing generally shows that THC is present in the sample but does not provide information on the amount. As a result, those who have a very small amount, as found in CBD products, test positive in the same way those who are using marijuana, which has a much higher level of THC, would get a positive result.

What happens of a federal agent has a positive drug test?

Federal agencies generally have a no-tolerance policy when it comes to THC. Any presence of the amount in a sample, regardless of the quantity, could result in termination.

Is this a common problem?

A spokesperson for the Federal Law Enforcement Officers Association stated a “couple dozen” federal enforcement officers are having trouble due to use of CBD products. Data for other federal positions would likely indicate the issue is much larger.

What options are available for federal employees facing termination?

Those who find themselves facing an investigation, discipline and potential termination are wise to act to protect their interests. An attorney experienced in federal employment matters can review the situation and discuss your options.

Guidance Issued on Marijuana and Federal Employee Security Clearances

Following is recent guidance from the Office of the Director of National Intelligence addressing the impact of using marijuana or CBD-related products and investing in marijuana-related businesses where they are allowed by state law. (Note: The acronym SecEA means “Security Executive Agent”—that is, the Director of National Intelligence—and SEAD 4 refers to “Security Executive Agent Directive (SEAD) 4, National Security Adjudicative Guidelines.”)

Based on current federal law, I provide additional adjudicative guidance herein on three topics that have generated ongoing inquiries from federal agencies: 1) recency of recreational marijuana use; 2) use of cannabidiol (CBD) products such as CBD oils; and 3) investment by persons in marijuana-related businesses.

With regard to the first topic, agencies are instructed that prior recreational marijuana use by an individual may be relevant to adjudications but not determinative. The SecEA has provided direction in SEAD 4 to agencies that requires them to use a “whole-person concept.” This requires adjudicators to carefully weigh a number of variables in an individual’s life to determine whether that individual’s behavior raises a security concern, if at all, and whether that concern has been mitigated such that the individual may now receive a favorable adjudicative determination. Relevant mitigations include, but are not limited to, frequency of use and . whether the individual can demonstrate that future use is unlikely to recur, including by signing an attestation or other such appropriate mitigation. Additionally, in light of the long-standing federal law and policy prohibiting illegal drug use while occupying a sensitive position or holding a security clearance, agencies are encouraged to advise prospective national security workforce employees that they should refrain from any future marijuana use upon initiation of the national security vetting process, which commences once the individual signs the certification contained in the Standard Form 86 (SF-86), Questionnaire for National Security Positions.

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With respect to the use of CBD products, agencies should be aware that using these cannabis derivatives may be relevant to adjudications in accordance with SEAD 4. Although the passage of the Agricultural Improvement Act of2018 excluded hemp from the definition of marijuana within the Controlled Substances Act, products containing greater than a 0.3 percent concentration of delta-9 tetrahydrocannabinol (THC), a psychoactive ingredient in marijuana, do not meet the definition of “hemp.” Accordingly, products labeled as hemp-derived that contain greater than 0.3 percent THC continue to meet the legal definition of marijuana, and therefore remain illegal to use under federal law and policy. Additionally, agencies should be aware that the Federal Drug Administration does not certify levels of THC in CBD products, so the percentage of THC cannot be guaranteed, thus posing a concern pertaining to the use of a CBD product under federal law. Studies have shown that some CBD products exceed the 0.3 percent THC threshold for hemp, notwithstanding advertising labels (Reference F). Therefore, there is a risk that using these products may nonetheless cause sufficiently high levels of THC to result in a positive marijuana test under agency-administered employment or random drug testing programs. Should an individual test positive, they will be subject to an investigation under specific guidelines established by their home agency.

Finally, with regard to the topic of investments, agencies should note that an adjudicative determination for an individual’s eligibility for access to classified information or eligibility to hold a sensitive position may be impacted negatively should that individual knowingly and directly invest in stocks or business ventures that specifically pertain to marijuana growers and retailers while the cultivation and distribution of marijuana remains illegal under the Controlled Substances Act. Under SEAD 4′ s guidance for personal conduct (Reference B, Guideline E), a decision to invest in an activity, including a marijuana-related business, which the individual knows violates federal law could reflect questionable judgment and an unwillingness to comply with laws, rules, and regulations. That is, it is appropriate for adjudicative personnel to consider whether an individual is knowingly facilitating violations of the Controlled Substances Act by engaging in such investments. On the other hand, if the marijuana-related investment is not direct, such as an investment in a diversified mutual fund that is publicly-traded on a United States exchange, adjudicators should presume that individual did not knowingly invest in a marijuana-related business~ thus, the indirect investment should not be considered relevant to adjudications.

In some instances, the investment itself may be illegal, which is also relevant to SEAD 4′ s guidance for criminal conduct (Reference. B, Guideline J), which by its very nature calls into question an individual’s ability or willingness to comply with laws, rules, and regulations.

However, under the whole-person concept, any mitigating factors should be considered. For example, if an individual holds direct stock investments pertaining to marijuana growers and retailers, divestment of such activity or disassociation of such activity should be considered a mitigating factor when rendering an adjudicative decision.

Heads of agencies are expected to advise their prospective and current workforce to adhere to federal laws prohibiting marijuana use.

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