TAMPA, FL – July 24, 2019 – Attorney Richard M. Blau, shareholder and chair of GrayRobinson’s alcohol beverage law, food law and cannabis industry law practice groups, provides insight on the lack of insurance within the cannabis industry in the mg Magazine article "The Cannabis Industry Is Thriving, So Why Isn’t It Insured?" The article discusses that despite all the positive momentum surrounding cannabis-related businesses (CRBs), insurers remain extremely reluctant to write policies aimed at protecting them from all manner of financial losses, including fire, theft, vandalism and product liability.
According to Blau, providers hesitate to get into the cannabis industry, for both fear of federal reprisal and because the disparity between state and federal law can wreak havoc on the enforcement of contracts between an insurer and its clients. For clarity, he notes a now-infamous 2012 Hawaii federal court ruling that said a homeowners’ insurance policy did not cover the theft of one woman’s marijuana plants for medicinal use – emphasizing that insurance companies operate in many different states, which means they arguably fall under federal jurisdiction. "The good news is courts are beginning to recognize we’re not living in the world of Reefer Madness anymore, and we now have an alternative line of cases where judges have ruled that as long as the claimant stayed within the scope of state law the insurance contract is valid and enforceable. But the split of judicial opinion needs to be reconciled, and the only way that’s going to happen is if marijuana is withdrawn from its Schedule I classification," he states.
View the full article here.