In one of the most highly watched marijuana cases in the country, the Colorado Supreme Court ruled Monday morning that companies can fire employees for smoking pot—even if it’s off-duty and despite the drug being legal in the state.

The decision poses a major setback for legalization proponents, as it sets the precedent that state marijuana laws do not override federal law that declares the drug to be illegal.

“[Under] Colorado’s ‘lawful activities statute,’ the term ‘lawful’ refers only to those activities that are lawful under both state and federal law,” the court’s opinion reads. “[E]mployees who engage in an activity such as medical marijuana use that is permitted by state law but unlawful under federal law are not protected.”

The decision surrounds Brandon Coats, a 35-year-old quadriplegic who was fired by Dish Network Corp. after testing positive for tetrahydrocannabinol (THC)—the primary component found in marijuana.

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