Katchko, Vitiello & Karikomi, PC is heavily involved in California’s cannabis movement. What once was a rush to acquire storefront or warehouse space is now, for many, a rush for a state Adult-Use or Medicinal license of some form whether retail, cultivation, distribution, etc.
The effort and expense involved in this licensing effort has many industry lawyers and consultants asking, “what if something goes wrong?” More money is on the line and at risk now that there are licensing fees to pay and related costs to absorb. Since cannabis businesses suffer from the same sorts of insurable problems that affect regular businesses, they will need to protect themselves through comprehensive insurance coverage. For example, we are seeing more lawsuits than ever against cannabis businesses as legalization turns the corner. These lawsuits range from employment issues, to Proposition 65 cases, to product liability cases related to pesticide, and beyond.
Much of this exposure could be limited by acquiring the right sort of insurance. But until recently, insurance has been difficult to acquire for the proprietor of a cannabis business. California is seeking to change that.
California Insurance Commissioner Dave Jones agreed that “cannabis businesses need insurance coverage to help them recover when something goes wrong just as any other legalized business does.” “This first-of-its-kind Cannabis Business Owners Policy, or CannaBOP program, will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses.” The initiative first launched in November of 2017 and has now made major headway by providing policies for landlords and product recalls as recently as May 2018.
We are excited to continue to see pioneers in other industries make their way toward the cannabis space. We believe new insurance options will be well received.
By GianDominic Vitiello, June 5, 2018.