Cannabis plant. (Photo: Shutterstock)
As the billion-dollar cannabis industry continues to develop in the tri-state region and elsewhere, investors, cultivators, retailers, and various ancillary businesses are realizing the heightened risks associated with their operations. As such, various lines of insurance are being sought to protect against the common loss, damage, and liability generally presented with operating any business, no less, a cannabis-related business. Insurers and insureds alike, however, should be aware of the unique insurance challenges.
Although many states have legalized the use and possession of a derivative of cannabis known as marijuana, the federal government has not. Today, marijuana remains a Schedule I drug under the Controlled Substances Act ("CSA"). Due to the Schedule I classification, any "manufacturing, possession, sale or use of marijuana" is a federal crime. The conflict between federal and state cannabis laws cause significant issues with respect to criminal liability because in some states where the sale and use of cannabis are in compliance with state law, such activity may nevertheless violate the CSA.
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