Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (2024)

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Jeremy Berke

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (1)

  • Editor's note: This article was published in 2019. Click here for the latest on Wall Street's drug-testing policies.
  • Sixty-five percent of adults in the US support legalizing marijuana at the federal level, according to recent polls.
  • Amid the rapidly changing social climate, Wall Street banks are reevaluating their policies on testing new hires for marijuana use.
  • Marijuana is becoming a multi-billion industry in the US, and it's clear that banks want a piece of it.
  • Sign up for our new cannabis newsletter Cultivated here.

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Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (4)

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Editor's note: This article was published in 2019. Click here for the latest on Wall Street's drug-testing policies.

Attitudes around marijuana use are changing rapidly in the US, and the largest banks are no exception.

A recent CBS News poll shows that 65% of adults in the US support legalizing marijuana at the federal level, including 56% of Republicans. To put that in perspective, only 45% of adults responded that marijuana should be legalized when CBS asked the same question in 2013.

Given the public shift on marijuana, it's natural that some of the country's largest and most prestigious employers are reevaluating their policy on testing job applicants and recent hires for a substance that is now legal for recreational consumption in ten states and Canada. Business Insider previously reported that Citigroup is reevaluating its drug testing policy in light of the changing social climate around marijuana use.

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New York City Council passed a bill in April that bars employers in the city from forcing job applicants — outside "safety-sensitive" industries like law enforcement and construction — to take drug tests for marijuana use. Many of the largest banks are either headquartered or at least have large presences in New York, meaning that this shift will likely affect them. The law goes into effect in May of next year.

Eric Ruden, an employment expert at the law firm Duane Morris's New York office, told Business Insider that in his view, many banks will have to update their policies to comply with the new rule.

Read more: Citigroup is reevaluating its policy on testing job applicants for marijuana use as Wall Street banks weigh whether to work with the $75 billion cannabis industry

There is a caveat, however, as Ruden pointed out. The rule only prevents banks from drug testing new job applicants — not existing employees. "[S]o if an employer drug tests for marijuana as a condition of a promotion, the employer is not required to change its policy," said Ruden.

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"With expanded illicit use of marijuana and the possibility of legalization for recreational use in the future, New York City employers should consider whether it makes sense to test for marijuana going forward," said Ruden.

Legal marijuana is also set to be a gigantic market for investment banks who make lots of money advising on M&A and public offerings, especially as the cannabis industry enters a wave of consolidation as scrappy startups turn into public companies with multi-billion valuations, all jockeying for market share.

Though momentum for legal marijuana has slowed in New York — Albany failed to pass a bill legalizing the drug this year — many of the biggest investment banks are slowly dipping their toes in the water by advising existing clients on how to find the upside of the marijuana legalization wave. They're getting acquainted with a brand-new industry that some Wall Street analysts say will become a $194 billion global industry by 2030. CBD alone is predicted to be a $16 billion industry by 2025.

Still, there are numerous roadblocks to doing business in the cannabis industry, namely that it's still considered an illegal, Schedule I drug by the US federal government.

That's put banks in an awkward position, where they risk getting prosecuted under federal money laundering laws for working with companies that cultivate or distribute THC-containing products in the US. Some smaller banks, however, have pushed in to fill the gap as the largest banks have been unwilling to take the risk.

Business Insider asked six of the largest banks about their policies on testing job applicants and recent hires for marijuana use. If you're on the job hunt, you'll want to read on.

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Goldman Sachs does drug test new hires though marijuana is not part of the test, a spokesperson said.

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (5)

A spokesperson for Goldman Sachs told Business Insider that while the bank does drug test new hires, the screening process does not include marijuana.

The spokesperson declined to comment further regarding the specifics of the bank's drug testing policy.

Goldman, for its part, was instrumental in one of the biggest deals in the cannabis industry to date. The bank advised Constellation Brands, an existing client, on the Corona maker's $4 billion purchase of an equity stake in Canadian marijuana cultivator Canopy growth.

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Morgan Stanley does not test employees for marijuana use.

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (6)

A Morgan Stanley spokesperson told Business Insider that the bank does not test employees or job applicants for marijuana use.

The spokesperson added that the policy has not changed in the last few years, despite the increasing support for marijuana legalization in the US.

Though a few Morgan Stanley alumni have decamped to the cannabis industry, the bank has not advised on or provided financing on any deals in the sector as of this month.

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Citigroup is reevaluating its policy on testing job applicants for marijuana use, a spokesperson said.

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (7)

Citigroup is reevaluating its policy on screening job applicants for marijuana use as more Wall Street banks weigh whether to work with the industry, a representative confirmed to Business Insider.

The person pointed to the changing social climate around marijuana legalization as the reason.Thirty-three states now have laws allowing some form of legal access to marijuana.

The Citi representative confirmed to Business Insider that while Citi still tests all job applicants for marijuana use, it had held discussions over whether to change the policy in recent months.

Citi has also held talks in recent weeks about how closely it should work with cannabis companiesor clients in other industries who want a loan to invest in the marijuana market, as Business Insider previously reported.

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JP Morgan Chase declined to discuss its drug testing policies with Business Insider. The bank has advised existing clients on cannabis deals, however.

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (8)

Neil Hall/Reuters

A spokesperson for JP Morgan Chase declined to comment to Business Insider regarding this story.

A document obtained by Business Insider shows that JP Morgan does urine test all of its supplier's employees, at the supplier's expense at a Substance Abuse Mental Health Service Administration (SAMHSA) certified site.

JPMorgan, however, is starting to make inroads into the cannabis industry. The bankprovided financing to Altria Groupfor its purchase of a minority stake in Canadian pot producer Cronos Group last year.

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Wells Fargo doesn't drug test new hires, a spokesperson said.

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (9)

Wells Fargo doesn't drug test as a condition of getting hired by the bank but has a zero tolerance policy for substances, a spokesperson told Business Insider.

"We have no tolerance for illegal drugs, including marijuana," the spokesperson said. "Our Drug Free Workplace Policy has remained consistent over the past several years in the midst of many state changes regarding legalizing marijuana (medical or recreational) and the company continues to recognize it as an illegal substance under federal law so it is prohibited in the workplace."

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Bank of America does not do pre-employment drug testing

Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (10)

REUTERS/Shannon Stapleton

A spokesperson for Bank of America told Business Insider that the bank does not do pre-employment drug testing. The bank hasn't changed its policy recently.

Bank of America recently initiated coverage on a number of Canadian cannabis stocks, including Canopy Growth, Aurora Cannabis, Hexo Corp, and Cronos Group. The bank also provided financing to Constellation on the Corona maker's $4 billion purchase of an equity stake in Canadian marijuana cultivator Canopy growth.

Read next

Goldman Sachs Wall Street Banks

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Some Wall Street firms are reevaluating policies for drug testing employees. Here’s where the biggest banks stand on testing workers for marijuana use. (2024)

FAQs

Do well over half of all US companies use drug tests to screen applicants? ›

More recent surveys of workplace drug testing indicate that between 50 and 75 percent of medium and large organizations now test current or prospective employees for drugs (American Management Association, 1992; Axel, 1990; Hayghe, 1991).

What percentage of US companies drug test? ›

Between 2020 and 2021, the percentage of companies that conduct lab-based urine tests decreased from 89% to 85%. Due to new legislation, nearly 10% of employees planned to remove marijuana from drug testing panels in 2021. Only 1.5% of job postings in the US mentioned a mandatory pre-employment drug test.

Does Bank of America do pre-employment drug testing? ›

A spokesperson for Bank of America confirmed that the firm does not test new hires or current employees for drug use.

What is required for the drug tests of public employees to be justified? ›

A: If an employer believes they have reasonable grounds or suspicion that justifies a drug test, they can perform a drug test. They cannot perform one randomly, and all employees must be given notice that a drug test will be performed.

What jobs are least likely to drug test? ›

What are high-paying jobs that don't drug test? High-paying jobs that don't drug test include IT consulting, computer animation, and mobile applications development. Film producers, interior designers, and real estate agents also don't typically have to undergo drug tests and usually earn high salaries.

How accurate are employee drug tests? ›

Urine tests aren't 100% accurate. Rarely, test results incorrectly show traces of drugs you didn't take. This can be due to foods you've eaten, lab errors, or over-the-counter medications. If you have a prescription for any medications, make sure you tell the collector and the lab.

What industry drug tests the most? ›

Throughout the top 50 metropolitan areas in the US, government positions were the most common jobs to require a pre-employment drug test. Healthcare and hospitals came in second with nearly 1,500 fewer jobs requiring pre-employment drug tests. Manufacturing was third, in spite of the dangerous nature of the job.

Why are people against drug testing in the workplace? ›

Critics of drug-testing programs argue that employees have a basic right to privacy. Employers cannot intrude on this privacy without serious cause and in a manner that is reasonable. Routine and random drug testing, they claim, clearly violates an employee's right to privacy.

How common is it to fail a drug test? ›

Of more than 7 million drug tests administered to potential employees and analyzed by Quest Diagnostic Labs in 2015, positive pre-employment tests clock in at roughly 4.2 percent. Once someone has been hired, that rate jumps to 5.5 percent.

Does Wells Fargo drug test new hires? ›

Wells Fargo doesn't typically drug test as a condition of getting hired by the bank but does have a zero-tolerance policy for substances. Wells Fargo has a drug-free workplace policy.

What kind of drug test is most common for pre-employment? ›

Urinalysis – A urine test is the most common form of pre-employment drug testing and is typically conducted once a conditional offer of employment has been sent.

Does JPMorgan Chase drug test? ›

JPMORGAN CHASE & CO.

Testing must be performed at a Substance Abuse Mental Health Service Administration (SAMHSA) certified laboratory. If the preliminary screening is a positive result, a confirmation test - Gas Chromatography/Mass Spectroscopy (GC/MS) - must be performed.

Is a urine test unconstitutional? ›

In most cases, courts have ruled that urine testing involves a search and seizure within the meaning of the Fourth Amendment. Nevertheless, courts have generally held that individualized reasonable suspicion rather than probable cause is necessary to conduct a search.

Do drug tests violate the 4th Amendment? ›

The Fourth Amendment. The public-private distinction is important because drug testing normally involves the taking and examination of material from a person's body that is not normally exposed to public scrutiny and so is considered a search under the Fourth Amendment to the U.S. Constitution.

What is our 4th Amendment right? ›

The Constitution, through the Fourth Amendment, protects people from unreasonable searches and seizures by the government. The Fourth Amendment, however, is not a guarantee against all searches and seizures, but only those that are deemed unreasonable under the law.

What is the most common employment drug screen? ›

Urinalysis – A urine test is the most common form of pre-employment drug testing and is typically conducted once a conditional offer of employment has been sent.

What is the difference between a drug test and a drug screening? ›

Drug screening and drug testing differ in terms of methodology, accuracy, cost, and time required for results. Methodology: Drug screening is usually performed with a rapid 5-panel urine or saliva test, whereas drug testing methods include the more comprehensive 10-panel urine, blood, or hair follicle tests.

Do most companies use a 10-panel drug test? ›

While 10-panel drug tests are most commonly used by employers, you may want to order a test for personal reasons.

What happens if I fail a drug screening for a job? ›

In general, if a job is contingent upon passing a drug test, a failed drug test can disqualify a candidate from the position. However, employers must follow the proper procedures when rescinding an employment offer or terminating an employee to remain compliant with federal and state regulations.

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