So you’ve made the leap into becoming a cannabis entrepreneur, you’ve put together a business plan, you have a location, you have your merchandise, and you’ve secured investors. Next step is risk management. Everything previously mentioned took time and effort, but also puts you and your other marijuana directors and officers in the cross hairs of exposure for being sued. At S2S Insurance we specialize in this area of insurance and strongly suggest for our cannabis business owners to carry a D&O insurance policy. As an owner, director or officer in a management role, you and your officers will have to make decisions that impact your company and/or your investors. If those decisions impact someone down the line the wrong way, those in charge of making decisions become the target of litigation.
Any business is susceptible to being sued by shareholders, customers, employees, or competitors. As your supply chain becomes more complex, the potential for law suits increase. Mix in the variables that come with marijuana’s legal status among states and the federal government and the situation only becomes more difficult to navigate. While individual states have legalized cannabis in some form or fashion, it is still a schedule 1 drug in the eyes of the DEA and the federal government. This status means that there are few standards set and ample opportunity for courts in every state to shape public policy around litigation outcomes.
An early Uber investor, Benchmark Capital, is suing former Uber CEO Travis Kalanick over claims he committed fraud in 2016, according to a lawsuit filed on Thursday in Delaware Chancery Court.
Uber has been in the spotlight after reports of pervasive gender discrimination and sexual harassment at the company. The ride-hailing giant is also being sued by Waymo, Google’s sister company, over claims it stole intellectual property to advance its autonomous-car development.
Five of Uber’s major investors forced Kalanick to step down in late June. Benchmark was reportedly one of the loudest voices calling for his removal.
At S2S Insurance we analyze where the cannabis business owner is vulnerable across all aspects of their business. Marijuana directors and officers liability insurance protects the personal assets of directors, officers and their spouses in the event they are personally sued by employees, vendors, competitors, investors, customers or other parties for acts while managing a company. The coverage also includes legal fees, damage awards, settlements, and provides protection holding officers harmless for losses due to their position within the organization. It is the responsibility of S2S Insurance to understand the risks associated with running a cannabis related business, and also combine that information with our knowledge of how insurance works best for our clients. As always, policy limits do apply and we always suggest reviewing your policy with one of our qualified specialists at S2S Insurance, and a qualified attorney.