The battle to win marijuana grow licenses in states like Nevada have resulted in some very aggressive legal challenges. One such example in Las Vegas highlights the advantages of having cannabis D&O Liability Insurance coverage.
Michael and Robert Frey are joint owners with Verano Holdings of a 50,000 acre cannabis cultivation and processing facility in Nevada called Naturex which runs the Zen Leaf dispensaries in Las Vegas. Verano Holdings is one of the largest cannabis companies in the country with marijuana grow licenses in multiple states.
According to case filing, the Frey brothers are saying that they completed paperwork for additional grow licenses in Nevada and gave it to Verano to submit. Verano is accused of using the paperwork completed by the Frey brothers as a reference to then completing separate paperwork which they filed with Nevada to get their own licenses independent of the Frey brothers.
Verano CEO George Archos said the company is aware of the complaint but has not had an opportunity to review the claims.
“Based on what we know of the allegations, however, we do not believe the complaint has merit,” Archos said in a statement to the Las Vegas Review-Journal. “We intend to defend aggressively against these claims.”
“Defendants claimed the applications would be incomplete without locations specified in the application materials — albeit an incorrect analysis and unsubstantiated excuse proffered by Defendants — to which plaintiffs reasonably relied on such misrepresentation at the time,’’ the lawsuit states.
Verano “intentionally and maliciously usurped the opportunity available and belonging to Naturex and instead utilized the Naturex materials for its own entity defendant Lone Mountain to apply without including plaintiffs and without informing plaintiffs of defendants’ intended course of action,” the lawsuit states.
The actions of officers and directors of any company can lead to lawsuits that D&O Liability insurance is intended to protect a company from. Marijuana legalization is spreading fast and investors are clamoring to get a foot hold so they can prosper from the quickly growing industry. Finding the right sort of liability coverage in the cannabis can be tough though, so get in touch with David Rahn or Eric Rahn of S2S Insurance, your cannabis insurance specialists, to find out your alternatives.
https://www.s2sinsure.com/wp-content/uploads/2019/02/las-vegas-marijuana-dispensary-sues-verano-holdings-for-marijuana-grow-licenses.jpg333500Eric Rahnhttps://www.s2sinsure.com/wp-content/uploads/2019/04/logo.svgEric Rahn2019-02-21 13:54:092019-02-20 14:25:21Seeking State Marijuana Grow Licenses Highlights the Need for D&O Insurance
Opinions on the emerging cannabis industry are so numerous that they are beyond my ability to track them. Everyone is either claiming to be an authority on the business of legal marijuana, or are striving to become the authority. The truth is that nobody is a complete authority on legal cannabis. It is still too new of an industry, and the proof is how inconsistent the rules and regulations pertaining to marijuana/hemp/CBD vary from state-to-state, and within each state! One moment Michigan has a restricted medical marijuana program, the next moment they have legalized adult-use marijuana. How can anyone be an authority, when fragmented state and federal regulations continue to evolve?
You should all know by now the largest barrier to entry into this industry is the Schedule 1 status of cannabis. This particular legal barrier unavoidably looms in our background everyday. Attending B2B cannabis conferences, from smaller more intimate ones such as C-LAB events to massive conferences like MJBiz, I consistently listen to speakers, vendors and attendees bring up the same topics. All of these cannabis conferences serve to educate and communicate, but no matter where I go people still talk about banking restrictions, merchant service problems, taxes being too steep to turn a profit due to IRS Tax Code 280E, inability to engage in interstate commerce and all sorts of marketing challenges. For us of course, it is the barriers to suitable marijuana insurance policies that we focus on the most.
How long does it take for a state regulated body to be funded, staffed, implemented, grow and stabilize? Depending how fast current laws are adopted or changed, it will take a long time and a lot of discussions as to how the cannabis Industry, the federal government and the cannabis approved states will come together to implement best in classlicensing and regulations, product quality standards, taxation and enforcement. Through this evolution of an industry, we will witness successes and failures along the way.
Look at Massachusetts, voters legalized adult-use marijuana in 2016, and it took over two years for sales to begin with only two dispensaries allowed to open by December of 2018. Florida has multiple lawsuits filed over unconstitutional medical marijuana laws that do not match what voters approved in 2016. State laws are changing on a regular basis and have not even stabilized in states like Colorado and Washington which began selling adult-use cannabis in 2014 and medical marijuana well before that.
The evolving marijuana industry is full of so many financial and regulatory uncertainties that insurance policies for cannabis companies are not consistent from one carrier to another. Marijuana insurance companies like S2S Insurance Specialists have to stay current with many state and federal regulations. Federal prohibition continues to plague the cannabis insurance industry by preventing it from operating in a free market environment. These restrictions have made most big insurance companies reluctant to enter the cannabis market place, therefore we are restricted to a couple of surplus lines carriers.
Best practices in business are still evolving in the cannabis space. The time for cannabis entrepreneurs to build, scale and stabilize their businesses is now! We have all read and heard about the growth projections of the cannabis industry. Projections that cannabis will represent the next $20 billion industry are probably conservative. We will eventually rival the multi-billion dollar snack, alcohol and pharmaceutical industries. As companies scale up, management teams become the forefront of any successful operation.
Most professionals I have met have pivoted into the cannabis Industry from other specialized professions. Like myself, they see an opportunity to do something new and exciting. We need to bring the best of our skill sets to this very young and emerging industry. Come into this industry with your eyes wide open. The opportunities in cannabis are great, but the competition is fierce. It takes more than just a love of marijuana or the passion of wanting to see the social injustice of marijuana prohibition come to an end. It takes a strong understanding of the fundamentals of business. It takes organization and constant research to understand the next big trend or new state mandated rules.
As cannabis insurance specialists, David and I stay current on industry trends, data points, cannabis research and the full spectrum of the supply/distribution chain. The biggest problem we all face in this young emerging industry is the lack of credible and actionable data. Like most institutional markets, insurance relies heavily on the data acquired across the industry in order to rate, compare and assess risk. We also follow current industry news and insurance trends in cannabis.
The most recent industry change was the passing of the2018 Farm Bill. It allows for broad cultivation of hemp, not simply pilot programs for studying market interest in hemp-derived products. Its language clearly allows for the transfer of hemp-derived products across state lines for commercial use and other purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law.* Now that hemp will be descheduled, along with hemp derived CBD, hopefully insurance for these products will be more widely available and competitive. There is hope that states will offer state sponsored crop insurance for hemp growers.
Another big trend we are seeing is the need for companies to raise capital for future growth. Many cannabis companies are looking towards the Canadian stock exchanges such as the TSX, VSE and CSE to raise funding. When companies engage in selling shares of stock to the public, there is a greater need for Directors and Officers Liability insurance (D&O). A Directors and Officers Insurance policy protects you as a director or officer of the company if your actions negatively affect the company’s profitability or if the company is sued because of your actions. The policy will pay for legal damages and fees. D&O helps preserve the company’s cash flow against expensive legal bills. These sorts of risks will become even more apparent as the number of cannabis stocks continue to grow and the amount of active investors and traders diligently following these companies hope to capitalize on the market by challenging management and business development goals.
We continue to follow various insurance claims affecting the cannabis Industry. We are seeing claims in the product sector, D&O claims from shareholders, employment dismissal issues and crop/property claims due to the fires on the west coast. California’s gray market persisted for 20 years, but over the summer it became mandatory that any cannabis product intended for commercial sale undergo product safety testing by state certified labs. A Sacramento testing facility that had serviced the industry for years was just suspended for failing to test for 22 pesticides. The cannabis was distributed to California consumers and the recall will cost many companies in legal fees, fines and potentially their licenses while the state courts figure out who is at fault for the lost revenues. Stories like this will hopefully start to weed out the bad actors in the industry.
We highly recommend that management review their insurance policies, policy limits and deductibles every six month to make sure that as your business grows, you are maintaining adequate coverages. Many things change in the course of a year, it is important to constantly manage your risk assessments. S2S Insurance Specialists are dedicated to helping you insure, from seed to sale, all your cannabis, CBD and hemp insurance needs.
Reach out Eric Rahn and David Rahn to find the cannabis insurance policies that are most suitable for your company.
https://www.s2sinsure.com/wp-content/uploads/2018/12/hemp-field-3661214_960_720.jpg720960Eric Rahnhttps://www.s2sinsure.com/wp-content/uploads/2019/04/logo.svgEric Rahn2018-12-18 13:53:072018-12-18 14:08:39The Evolution of the Emerging Cannabis Industry
Cannabis business owners and managers wear multiple hats as they venture into the developing industry of cannabis. They have taken on the responsibility of growing their business which will not only impact them but anyone that has invested in their dream and shares in the successes and failures. Cannabis business owners have to make decisions that will increase revenue, market share, create exposure to new customers, improve customer service, and multiple other decisions that enhance the business. When decisions are made that harm the business, and therefore harm investors, someone must be held responsible for that harm. Those people who we hold responsible for making sound business decisions are the directors and officers of a company or corporation.
Elon Musk is an extreme example of how a CEO’s decision making can put him or her in the sites of disgruntled investors, or in the case of publicly traded companies, the SEC. The Securities and Exchange Commission protects investors and the markets which people invest their hard earned money into every day. Musk sent out at hasty tweet that millions of people saw (many of which who invest in his company’s stock) and it impacted the price of his stock. The problem with the tweet is that it was not true or completely accurate. It became public and again his company’s stock price was impacted in a negative way causing investors to lose money.
The Securities and Exchange Commission has sued Tesla CEO Elon Musk for securities fraud after his aborted attempt to take the company private earlier this summer. The complaint, filed in federal court in the Southern District of New York, shows that the SEC is seeking to ban Musk from being able to hold officer or director positions at publicly-traded companies, as well as any other damages the court feels are appropriate.
“Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions,” they write. “Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a “special purpose fund,” and had not confirmed support of Tesla’s investors for a potential going- private transaction.”
For cannabis business owners, Elon Musk’s situation is extreme but does show the impact directors and officers can have on a business. As your cannabis business grows and the value of your investors’ investments grow, each decision you make will be that much more scrutinized. Executives and higher level managers can protect the company and themselves by investing in Directors and Officers insurance. D&O insurance policies protect you as a director or officer of the company if your actions negatively affect the company’s profitability or if the company is sued because of your actions. The policy will pay for legal damages and fees. As always policy coverage limits do apply so talk with a cannabis insurance specialist like Eric Rahn of S2S Insurance today.
https://www.s2sinsure.com/wp-content/uploads/2018/10/104994086-RTX4RL3Z.1910x1000.jpg10001910Eric Rahnhttps://www.s2sinsure.com/wp-content/uploads/2019/04/logo.svgEric Rahn2018-10-10 18:28:072018-11-05 09:39:35What Cannabis Directors and Officers Can Learn From Elon Musk
The amount of new headlines popping up regularly about United States based marijuana companies going public on a Canadian exchange through reverse mergers is pretty common these days. More and more US based marijuana companies are entering the Canadian public markets to gain access to private equity and public capital markets. This year we have seen MedMen Enterprises, a very popular and quickly growing marijuana dispensary company primarily located in California and Las Vegas, go public through a reverse merger on the Canadian Securities Exchange or CSE. MJardin, a Colorado based marijuana company also went public through a Canadian reverse merger on the CSE and everyone is anticipating both Acreage Holdings and LivWell to do the same in the near future.
As often as you hear about reverse mergers they are not as simple as they may first seem and they are certainly not risk free. The appeal to entering an exchange traded equity market through a reverse merger is that it can be a quicker and less expensive way of going public than a traditional initial public offering or IPO. These US based cannabis companies find businesses trading on a Canadian exchange like the CSE, TSX or CNSX that are struggling financially for some reason, buy the majority of the shares of what would now be referred to as a shell company, and exchange the shares of the private company with shares of the shell company. While a reverse merger into a Canadian public company may be quicker and cost less than an IPO, it also comes with some additional risks that certain marijuana insurance policies can help define.
Canada’s marijuana industry is booming and expected to add another $5 billion in marijuana sales now that the Cannabis Act has been passed legalizing adult-use marijuana in Canada nationally. In fact, the commercial sale of adult-use cannabis is set to start on October 17th, 2018. Some other countries like Russia have condemned the legalization of cannabis in Canada saying that it violates international trade treaties. Recently the United States Customs and Border Protection Agency threatened to issue lifetime travel bans to the US for Canadian marijuana employees and investors. Here in the United States, marijuana is a Schedule 1 drug and authorities are suggesting that Canadians involved in the cannabis trade that are looking to enter into the US could proliferate the state legal marijuana industry here. Whether you agree with this stance or not, the financial risks to a marijuana business are still very real. How these cross border threats play out financially are still an unknown which is the very nature of risk and what marijuana insurance policies are for.
Cross border threats aside, there are inherent financial risks associated with reverse mergers no matter where they take place. Again, a shell company typically has financial troubles which is why they are targeted for the acquisition. What are those financial liabilities? Some companies that have moved forward with reverse mergers have missed certain debts and liabilities of the shell company, in particular in cases where the shell company was in the process of being sued. Perhaps an acquisition is exactly what the shell company needed to get out from under certain debts. Another risk could be that without holding periods, the investors in the shell company could dump their shares right after the acquisition causing the price of the company to fall rapidly.
These are only a few of the potential challenges that US based marijuana companies face by establishing themselves as a Canadian exchange traded company. Finding out how marijuana Directors and Officers Liability Insurance could help to financially protect you from the unforeseen only makes sense for a US based cannabis company that is considering going public in Canada. As a Canadian public company you must now comply with Canadian securities laws which adds an entirely new layer of compliance and liability to consider. Insurance for marijuana companies, such as Directors and Officers Insurance, is always a good idea and would certainly be good to have when going public in Canada through a reverse merger.
The elements of the unknown are heightened through reverse mergers, especially those that happen on an international exchange that will have rules that differ from US exchanges. That is why reaching out to S2S Insurance Specialists for hard to place marijuana insurance policies can be the solution you need. S2S Insurance Specialists focus on providing clients with this critical early stage insurance for complex cross border deals. Let us assist in guiding you through the minefield of issues required to obtain proper coverage. Here are some of the policies that your cannabis business can specifically benefit from before executing a reverse merger in Canada.
Directors and Officers Insurance (D&O Insurance for marijuana)
A D&O Insurance policy protects you as a director or officer of marijuana company of wrongful acts that negatively affect the company’s profitability. It will also protect you if the company is sued as a result of these wrongful acts. The policy also covers legal damages and fees. Excess Limit Coverage Policies are available as well. Company executives, newly appointed officers and a board of directors should want adequate D&O insurance in place prior to moving forward with a reverse merger. Investors should require that any company they are investing in must have D&O Insurance to protect their investments from wrongful acts by the directors and officers. Again, when it comes to reverse mergers, it takes a lot of due diligence to ensure that the shell company does not have some hidden liabilities. Regardless of whether a wrongful act was truly intended, the liability still falls to directors and officers.
Professional Liability Insurance for cannabis companies (PLI)
Who would be held accountable during a reverse merger if errors and omissions were discovered? As a cannabis accountant or attorney, those blames could be turned upon you. A PLI policy can cover traditional business professionals such as marijuana growers, trimmers but also marijuana accountants and lawyer.
Employers Practice Liability for a marijuana business
If any of your employees file a claim against you for discrimination including age, race, disability, sexual discrimination, wrongful termination or some other type of discrimination; Employers Practice Liability coverage protects you from these types of employee-related claims. When a reverse merger occurs with a Canadian shell company, it is likely that your marijuana business may retain some of the shell company’s employees familiar with Canadian security laws. It may be challenging to judge their particular state of mind after their company has been acquired and the threat of discrimination claims cannot be ignored.
S2S Insurance Specialists is an international insurance broker for the cannabis industry. We will help you find the hard to place cannabis insurance policies that will protect you when taking such a big step by going public. Find the D&O policies, PLI and Employers Practice Liability policies by contacting Eric Rahn of David Rahn, the marijuana insurance specialists.
https://www.s2sinsure.com/wp-content/uploads/2018/09/8715933906_961b77c60b_b.jpg6831024Eric Rahnhttps://www.s2sinsure.com/wp-content/uploads/2019/04/logo.svgEric Rahn2018-09-21 10:02:022018-11-05 09:39:35D&O Insurance For A Canadian Reverse Merger
As a member of the executive leadership team of an organization, there are certain responsibilities that fall under your umbrella whether they are explicitly stated or implied. As an owner of your business or even a board member of an organization, you are responsible for the management of your company’s affairs. That responsibility comes with the possibility of being sued if something is mishandled and leads to damage or injury. This is why we at S2S Insurance strongly urge business owners and managers to obtain directors and officers insurance. The cannabis industry is steadily growing as more and more states legalize cannabis. The growth of the industry requires more advanced risk management strategies due to the advanced risks that exist.
Companies large and small, public and private, for-profit and nonprofit all face director and officer (D&O) litigation risks. In a 2016 survey by Chubb, the average reported loss from a directors and officers judgment was $387,000. No matter how successful your cannabis related business is, the reality is that a substantial financial loss such as $387,000 could destroy your company instantly, or set you back to a point that may be difficult to recover from. If you are a director or officer at your organization, you could be sued for any number of reasons, including breach of fiduciary duty resulting in financial losses or even bankruptcy, fraud, failure to comply with workplace laws, lack of corporate governance to name a few. These suits can come from a variety of places including but not exclusive to employees, vendors, competitors, investors and of course customers.
A board member at GlaxoSmithkline is one of those being sued by the US state of Massachusetts over the US opioid addiction crisis.
The lawsuit seeks damages from 16 individuals, many of whom are members of the Sackler family, and Purdue.
“The Attorney General claims Purdue acted improperly by communicating with prescribers about scientific and medical information that FDA [the US Food and Drug Administration] has expressly considered and continues to approve,” it said.
In March a study by a federal agency found that opioid overdoses were up 30% over the previous year in the US, with Midwestern states having the highest jump in cases.
The Massachusetts lawsuit alleges that Purdue Pharma, the company behind the drug OxyContin, “created the [opioid] epidemic and profited from it through a web of illegal deceit”.
Ms Lewent was named in the lawsuit as one of those “who oversaw and engaged in a deadly, deceptive scheme to sell opioids in Massachusetts.”
No business owner wants to find him or herself in court dealing with a directors and officers law suit, but there are precautions every business owner can take to help protect him or her self and their business in these situations. It is critical that as a director or officer of your company you consider investing in D&O insurance. Directors and officers liability insurance protects your personal assets along with your spouse’s if you are sued for mishandling the management of your company. S2S Insurance specialist, Eric Rahn, states “don’t make the mistake of assuming you are protected under your general liability policy when it comes to D&O insurance.” You should always review your policy with one of the marijuana insurance specialists at S2S Insurance and your attorney. Contact us today and we can begin to assess your risk and provide options to help you maintain a successful business no matter what might occur down the road.
https://www.s2sinsure.com/wp-content/uploads/2018/08/102367736_oxycontin.jpg5761024Eric Rahnhttps://www.s2sinsure.com/wp-content/uploads/2019/04/logo.svgEric Rahn2018-09-01 13:15:442018-11-05 09:07:24Directors and Officers Insurance Integral In S2S Insurance Risk Management Strategy
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.
S2S Insurance provides director and officer insurance for CEO’s and other officers of your organization.
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.
S2S D&O insurance protects managing officers from business related law suits.
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.
Both the adult-use and medical marijuana industries are growing at an incredible pace. The massive push to normalize the consumption of marijuana, whether it is patients viewing cannabis as just another form of medication or adults seeing marijuana like alcohol, will eventually make the legal cannabis industry as mainstream as any other business industry. Bearing that in mind, cannabis businesses need to understand how to manage their risks appropriately. The risks inherent to the cannabis industry are the specialty of S2S Insurance Specialists. Financial risks for a company starts at the top, hence the creation of Directors and Officers Liability Insurance.
If you are taking outside investor funds from private equity sources, venture capital or friends and family, you need D&O Insurance. Directors and officers bear the most risks associated with owning a privately held, non-profit or publicly traded corporation. As the owner, director or officer of a cannabis business you may take on roles within the company that require providing professional advice or making difficult decisions. Any owner, director or officer in a management positions may be the focus of potential litigation.
All businesses are vulnerable to being sued by shareholders, customers, suppliers, employees or competitors. A recent Towers Watson survey showed that public, private, and non-profit companies all face directors and officers litigation risks. In fact, as the director or officer of a business that handles state legal marijuana, your challenges are more complex with the current State and federal banking, employment and transportation issues the that the cannabis industry faces..
Cannabis is still a Schedule 1 substance, which means it is listed on the Controlled Substance Act making it as illegal of a substance as exists on the federal level. Despite the fact that 30 states have legalized medical marijuana and nine states have either implemented an adult-use market or are in the process of setting one up, banks remain reluctant to accept funds from a cannabis company forcing cannabis business to operate on a cash-only basis. Working exclusively with cash makes filing taxes, especially with tax code 280E preventing marijuana business owners from writing off normal business expenses, difficult to simply organize expenses and income. Considering these additional challenges, Directors and Officers Liability Insurance for marijuana companies is that much more important. Staying organized is the key to having a successful cannabis business.
Directors and Officers (D&O) 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. It covers legal defense fees and settlements, and provides the standard indemnification provisions that hold officers harmless for losses due to their position at the company.
Some examples of insurable claims in the cannabis industry have resulted from various aspects of the operations. Let’s say a budtender is in the unfortunate circumstance of being on shift during a robbery or a cannabis trimmer hurts themselves due to faulty machinery. The care of cannabis plants during the cultivation process often involves highly sophisticated equipment, especially for indoor grows, and the preparation of cannabis concentrates can create intense fire hazards. The naming of cannabis strains is a sensitive issue as well. There is no standardized method of naming strains and recent lawsuits against the creators of Gorilla Glue and Girl Scout Cookies ended up in favor of the plaintiffs. The cannabis industry involves many financial hazards in all reality, which makes insurance for marijuana all the more important.
A director or officer could be sued for any of the following reasons:
Failing at their fiduciary responsibilities
Misrepresenting company assets
Using company funds inappropriately
Misrepresentations by the board of directors
Failure of the board of directors to take appropriate actions
Infighting between board members and shareholders
Not following the laws of the workplace
Stealing intellectual property or taking a competitor’s customers
Failure meet state and federal requirements
Not managing the company properly
Do not think for a moment that your company has to be generating millions of dollars each year for these financial risks to become a reality. According to a 2016 CHUBB survey, financial losses due to lawsuits for the above reasons ranged anywhere from $387,000 to $17 million. Needless to say, losses such as these would devastate most companies, especially a small cannabis business trying to find footing in this complex space. Unless of course that company has taken on the right sort liability insurance for cannabis.
S2S Insurance Specialists provides Director and Officers Liability Insurance for companies in both Canada and the United States. We cover Canadian cannabis businesses including public Canadian companies that are operating exclusively in Canada or in the United States as well. We also provide policies for private U.S. cannabis companies which includes startups and both emerging and mature companies. We write policies from US$1M to over US$25M+.
D&O Liability Insurance can also cover:
Employers Practices Liability – which protects an employer from a lawsuit filed by an employee for a wrongful act
Fiduciary/Crime – which covers an employer from a theft by an employee
Errors and Omissions – which covers General Counsel costs and other professional advice fees, especially for companies practicing in the medical marijuana space.
Directors and Officers Liability Insurance does not cover marijuana companies for any illegal acts.
It must be brought up since the cannabis industry is transitioning away from the illicit market. All cannabis companies must be operating with all of the state licenses and permits necessary to operate legally. Missing, not understanding or forgetting to go through the proper measures to receive a valid license from your state will never be excusable. Please take the time to make sure your cannabis business is setup properly with the state or any cannabis insurance coverage could become void.
Understanding the risks associated with owning a business that directly handles the marijuana plant or an ancillary business connected to the marijuana industry is the business of S2S Insurance Specialists. We are advocates for cannabis, but more importantly we are insurance professionals. Insurance for marijuana companies is essential. We want you to know that you can count on us to not only provide you with proper coverage but also in helping you understand the risks inherent in owning a marijuana company. Those risks start at the top with the directors and officers of a marijuana company. Liabilities exist everywhere in the cannabis industry, whether it is banking or merchant service issues, the Schedule 1 status of cannabis or the normal day-to-day risks of owning any company. Let us help you cover all of your bases and avoid financial setbacks to help you survive and flourish in this new incredible industry where there are no limits for where your company could go.
Contact us at S2S Insurance Insurance Specialist, www.s2sinsure.com or call 1-954-790-6604 and talk to Eric or David Rahn.
S2S Insurance Specialists LLC is an international insurance intermediary and brokerage firm, specializing in the placement of insurance and other risk insurance services to businesses operating in the Medical And Recreational Marijuana Industry.