Cannabis Liability Insurance is a must for any business operating in the marijuana space. Marijuana Liability Insurance provides protection against damages resulting from negligence caused by your business products or services. It does not matter if you are a marijuana dispensary, cannabis cultivator, marijuana doctor or any other cannabis support business. Cannabis Liability Insurance pays for damages and legal expenses if you are sued up to your policy limits. Marijuana Liability Insurance pays for medical expenses of others who are harmed by your business.  Negligence and mishandling in quality control of your cannabis grow and marijuana products can result in many issues like mold, mildew, and bacterial exposure. Defective marijuana paraphernalia is also a risk that can cause harm to your customers and to your business.

Cannabis Product Liability Threatens Cannabis Industry

The United States market share in the cannabis industry is currently estimated to be near $6.3 billion with double digit annual compound growth as marijuana is legalized across the globe. While the industry is undoubtedly growing, investors and cannabis business owners need to be cautious according to Fortune Magazine, Nov. 7, 2017. What should and does have business owners concerned is cannabis product liability. A better way to state the issue is, what will the cannabis business owner be required to pay for, if a product they produce or sell is found to be defective? As the industry grows, the profits grow, the risks grow as well. As production increases and the regulations adjust to cannabis legalization, the pool of risk only expands for the marijuana business owner.

S2S Insurance, cannabis business product liability, who insures cannabis business, marijuana

Due to cannabis’s Schedule 1 designation by the DEA, even more is at risk. The Comprehensive Drug Abuse Prevention and Control Act of 1970 prohibits the manufacturing of marijuana, distribution, dispensation and possession and lists the plant next to heroin as a Schedule 1 controlled substance having “a high potential for abuse,” 21 U.S.C. Sections 801, Et. Seq (1970) (Controlled Substance Act). Thus, claims may be brought against anyone in the marijuana industry’s supply chain touching the item prior to sale to the consumer; i.e., anyone planting, cultivating, harvesting, processing/extracting, testing, packaging, disposing, transporting and dispensing marijuana.

Officials said they are investigating the possibility of food-borne illnesses stemming from the restaurant in the suburb of Columbus, but have not pinpointed the source of the problem. Results from test were pending, the health department said.

The restaurant was shut down on Monday after an investigation was launched, but it’s expected to reopen Tuesday afternoon.

“Our protocols identified a handful of illness reports at one restaurant in Powell. … We acted quickly and closed this single restaurant out of an abundance of caution and we are working with the local health officials to reopen this restaurant as soon as possible,” said Laurie Schalow, a spokeswoman for Chipotle.

S2S Insurance, cannabis product liability, marijuana insurance, dispensary insurance

Every year defective products cause bodily harm, property damage, production stoppages. The process of defending litigation or even coming up with a settlement agreement can completely drain a company’s resources. When dealing with cannabis product liability suits, businesses will also have to deal with regulatory compliance, producing and distributing product warnings, recalling products, claim investigation, product testing and additional risk assessment. Where there is a cannabis product liability suit there will be attorneys, experts, and possibly consultants that can all get very expensive very quickly. Lawsuits can range from a single plaintiff seeking damages for personal injuries to class action law suits where a defective product is tied to an entire group of claimants. Even the most standard cannabis product liability claim could financially crush any cannabis business owner that is not prepared with the proper risk management strategy. At S2S Insurance we have a team of professionals ready to help develop a risk management strategy for your marijuana related business. All policies are subject to claim limits and it is critical that business owners review their policy with not only their agent, but also a licensed attorney.