The Insurance Services Office, Inc. (ISO), which develops standard insurance policy forms for use by insurers, recently released its first cannabis-related endorsements (Cannabis Endorsements) to the business owner policy form. This new release provides five cannabis exclusion endorsements; two of the endorsements change property coverage for cannabis, and the other three endorsements change liability coverage for cannabis. As with any insurance policy or endorsement, understanding the specific language of these new cannabis endorsements is critical to any insured engaging in cannabis-related activity.

The ISO business owner policy is a package policy that provides a number of property and liability coverages for business owners. Historically, property loss of cannabis-related businesses was not "covered property" under the Property Not Covered provision of the form, which provides that covered property does not include "contraband, or property in the course of illegal transportation or trade." For decades under federal law, cannabis was effectively "contraband" for insurance purposes by statutes such as the 1937 Marihuana Tax Act and the 1970 Controlled Substances Act. The 2018 Farm Bill, however, changed the legal status of hemp, cannabis with a concentration of no more than 0.3% tetrahydrocannabinol (THC). Specifically, the Farm Bill amended the Controlled Substances Act and the Agricultural Marketing Act to remove hemp from regulation as a controlled substance.