Cannabis Product Liability Can Save Your Cannabis Related Business

Marijuana advocates have been championing the benefits of cannabis for decades. As cannabis and marijuana related products come more into the mainstream, greater attention is being paid to the effects these products have on people. Prior to legalization if a person smoked a bad strain of weed, they would find a new dealer or take a long break before going back to the same person that provided the bad weed. There was little if any recourse if the product purchased on the street had unwanted effects. Now that states have taken the initiative to legalize marijuana in various formats across the country new remedies have been made available to those negatively impacted by the products they now purchase legally.

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Cannabis product liability insurance could be the difference between saving your cannabis related business or having to close your doors. As a business owner, you can be sued by others for any damage resulting from the negligence of your business products that cause harm to others such as a defective product. This is a far cry from the days of just finding a new dealer. Product liability insurance pays for your damages and legal expenses if you are sued, and will also pay for medical fees of others who are harmed by your business.

Drug recalls do not happen often, but they do happen. These are a few of the worst:

Baycol – After four years on the market this drug, prescribed to patients with high cholesterol, was recalled by Bayer, its manufacturer. The drug reportedly caused more than 100,000 deaths and was connected to a muscle disorder that caused the kidneys to clog with protein from dying or dead muscle tissue. Vioxx – Manufactured by Merck, the recall of this arthritis pain reliever was one of the largest prescription recalls in history. As many as 140,000 people suffered from heart attacks or strokes after taking this drug. Bextra – Created to treat arthritis and other inflammation in the body, this drug was recalled by Pfizer after it was on the market for one year. It was associated with an increased risk of heart attack and stroke in some patients and was also found to cause a fatal skin condition.

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The financial impact of a cannabis product liability suit reaches beyond damages and medical bills. This type of scenario can lead to a product recall, product inventory may have to be removed from shelves, and all of this comes at the expense of the cannabis business owner. Anytime there is conversation about damages and liability, there must be a conversation about attorneys and legal fees. While every business owner works to avoid these situations, they do occur and they can be very costly. Many if not all of these expenses and costs can be covered by a cannabis product liability insurance policy, but understand that policy limits do apply. It is important to review your policy with an experienced insurance agent and your attorney. Contact S2S Insurance today to review your risk management options.


Cannabis Employer’s Protection When Disaster Strikes

Every cannabis business owner should aim to maintain a safe and discrimination free working environment. Another good business practice is to fire employees for just cause, such as poor performance, an action irreparable to the business, or lack of trust based upon documented evidence. Even with the best policies and intentions in place, a fired employee may not agree with the reason for termination and they may opt to take action. Depending on the situation the employee could sue for wrongful termination based on any number of types of discrimination. In situations like this, marijuana business owners must have cannabis employer’s protection liability insurance.

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At any time an employee could file a claim against you for discrimination including age, race, disability, sexual discrimination, wrongful termination, or some other type of discrimination. Traditional businesses and industries have been navigating these issues for as long as they have been in business and the same is true for the marijuana industry. Marijuana related businesses are not immune to charges of discrimination or wrongful termination. Any business that has multiple employees runs the risk of being sued by that employee at some point in time during or after the working relationship.

A cannabis company fired an employee due to her cancer diagnosis, alleges a new lawsuit. Pamela Johnston, formerly senior vice president of strategy and special projects for Electrum Partners, is suing the company and its founder Leslie Bocskor for wrongful termination in a lawsuit filed last week in the U.S. District Court for the Southern District of New York.

“Electrum and Mr. Bocskor fired Ms. Johnston because she was suffering from cancer,” reads the complaint. “They also fired Ms. Johnston because she had reported intra-company sexual activity that posed a risk to the company – activity undertaken by Electrum executives that Electrum did not want to address.”


Electrum Partners is a consulting firm that specializes in the cannabis industry. The lawsuit alleges that the company violated New York City Human Rights Law in her termination and is seeking damages from lost wages, back-pay, pain and suffering, and more.

s2s insurance, cannabis employer's protection, weed industry, cannabis businessEvery employer wants happy employees that can work for them forever as a big happy family, but unfortunately that is not always the case. If there is a bad break up and the employee ends up filing a suit, marijuana business owners can protect their businesses with cannabis employer’s protection liability insurance. A claim for discrimination or wrongful termination could include depositions, file and record requests, court proceedings, damage awards, punitive damages, and legal fees. Even an unsuccessful claim against an employer could be time consuming and costly to defend. Cannabis employer’s protection liability insurance would pay the cost of the entire claim up to the policy limit. While no policy can insure against time lost or other collateral damage caused by a discrimination claim, the right policy can reduce the damage by covering the financial loss if such a claim is filed. A business owner should always work closely with an experienced insurance agent when determining the right risk management strategy for their 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.

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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.

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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.