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Cannabis Conundrum: Conflicting Laws Mean Ongoing Challenges for Oregon’s Senior Housing and Long Term Care Industry

Apologies to Law and Order: SVU, but in the federal criminal 
justice system, “Schedule I” based offenses are considered especially heinous. Under federal law, the manufacture, importation, possession, use and distribution of certain drugs and substances (and certain chemicals used to make drugs) is regulated by the Controlled Substances Act (CSA). Drugs and substances covered by the CSA fall into five Schedules, with Schedule I substances considered the most dangerous. Drugs or substances on Schedule I, as determined by the federal government, have a high potential for abuse, no currently accepted medical use in treatment in the U.S. or a lack of accepted safety for use under medical supervision. Examples of Schedule I drugs and substances include heroin, lysergic acid diethylamide (LSD), methamphetamine (ecstasy) and as of the date of this article, marijuana.

Under Oregon state law, subject to conditions and limitations, marijuana is lawful for both the medical treatment of certain debilitating medical conditions and, for persons over 21, personal use in non-public locations. Yet for residents in senior housing (i.e., assisted living and memory care facilities) and long term care (i.e., skilled nursing facilities), use of marijuana for medical treatment or legal social use is prohibited under the federal CSA.

This federal and state law conflict has created an ongoing dilemma for the senior housing and long term care (collectively, SH/LTC) industry. In return for providing services to facility residents, many long term care providers are paid by the Medicare federal health insurance program and the joint federal and state Medicaid program. Likewise, some senior housing providers receive Medicaid payments. SH/LTC providers that permit residents to possess or use marijuana at facilities where Medicare or Medicaid is a payment source risk potential federal sanctions, such as disqualification from participation in Medicare or Medicaid programs. In fact, the Social Security Act requires that any individual or entity convicted of a felony offense related to the unlawful manufacture, distribution, prescription or dispensing of a “controlled substance” (which includes marijuana) be excluded from participation in any federal health care programs, including Medicare and Medicaid.

Some providers view marijuana use as a resident rights issue and, reassured by U.S. Department of Justice (DOJ) guidelines, permit residents to possess and use marijuana for certain purposes at their facilities. However, such providers must also consider whether to take on the potential additional risk of storing and dispensing marijuana to certain residents. In Oregon, SH/LTC providers who do so risk inadvertently becoming a “Designated Primary Caregiver” under the Oregon Medical Marijuana Act. Such a designation carries duties that should give prudent SH/LTC providers pause.

Other SH/LTC providers take no solace from the DOJ’s focus on large commercial cannabis businesses, and instead rely on federal law (at least for now) to decide not to accommodate medical marijuana use nor permit recreational marijuana. These providers commonly impose a blanket ban on marijuana use and possession. Marijuana use in SH/LTC facilities raises other significant legal concerns too, such as compliance with ventilation and smoke-free workplace requirements.

Despite many states having laws in place for years that permit certain uses of marijuana, long term care providers do not have ironclad answers on how best to deal with the conflict. As of June 2016, the U.S. Drug Enforcement Administration is contemplating whether to reclassify marijuana as a Schedule II substance, meaning the CSA would recognize marijuana as having a currently accepted medical use, but still with a high potential for abuse (along with other Schedule II substances like oxycodone and morphine). Such a reclassification would likely create more new questions than clear answers for SH/LTC providers.

Oregon SH/LTC providers can reasonably expect that laws will eventually be passed that will clarify how they must or should respond to the federal/state marijuana law conflict. Until then, providers should continue to carefully consider the pros and cons of permitting marijuana in their facilities and closely monitor this ever-evolving area of law.


BrechtJJeff Brecht is Counsel to the Firm at Lane Powell where he is a member of the Long Term Care and Seniors Housing Team and Cannabis Practice Group. He can be reached at 503.778.2162 or This email address is being protected from spambots. You need JavaScript enabled to view it.

EngbloomJJulie M. Engbloom is a Shareholder at Lane Powell and Co-chairs the Firm’s Cannabis and Privacy and Data Security Practice Groups. She can be reached at 503.778.2183 or This email address is being protected from spambots. You need JavaScript enabled to view it.

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