Massachusetts Recreational Insurance Requirements for Licensing

Massachusetts Recreational Insurance Requirements for Licensing

Commercial Liability and Product Liability Insurance LimitsWashington State Flag

The Massachusetts Cannabis Control Board is moving forward with the approval of 935 CMR 500.00 and includes commercial insurance.  Below are those important requirements:

Liability Insurance Coverage or Maintenance of Escrow (1) A Marijuana Establishment shall obtain and maintain general liability insurance coverage for no less than $1,000,000 per occurrence and $2,000,000 in aggregate, annually, and product liability insurance coverage for no less than $1,000,000 per occurrence and $2,000,000 in aggregate, annually, except as provided in 935 CMR 500.105(J)(2) or otherwise approved by the Commission. The deductible for each policy shall be no higher than $5,000 per occurrence.

This means procuring a commercial general liability policy with limits of $1,000,000 per occurrence and $2,000,000 per aggregate and product liability with limits of $1,000,000 per occurrence and $2,000,000 per aggregate.

What other insurance requirements exist in 935 CMR 500.00?

Licensees will need to purchase workers compensation insurance if they have employees.  The regulations does not indicate any other obligations such as naming the State of Massachusetts as an additional insured. 

What is the purpose of Commercial General Liability? 

This is a business insurance policy covering the premise or business location for liability, personal and advertising injury, and legal defense.  The State of Massachusetts has determined $1,000,000 per occurrence and $2,000,000 per aggregate will provide adequate protection from third party lawsuits. 

What is the purpose of Product Liability? 

Product liability is a type of insurance policy protecting a cannabis company from third party lawsuits.  An example would be a recreational marijuana customer becomes sick from a cannabis product bought at a store.  The customer files a lawsuit against the retail and possibly the manufacturer.  The State of Massachusetts has determined $1,000,000 per occurrence and $2,000,000 per aggregate will provide adequate protection from third party lawsuits. 

What does $1,000,000 per occurrence and $2,000,000 per aggregate mean? 

Per occurrence is the maximum amount paid primarily for bodily injury and property damage.  Per aggregate is the the maximum paid for multiple types of claims. 

How do I buy insurance to meet the requirements in Massachusetts? 

Please contact us. 

Colorado Universal THC Warning Symbols

Colorado Universal THC Warning Symbols

Colorado Marijuana Enforcement Division Rule on Warning Symbols for Packaging

The Colorado Marijuana Enforcement Division has released new rules for the adoption of single Colorado Warning LabelUniversal Symbol to be used in the packaging, labeling, and product markings on a variety of products. 

Dear Marijuana Industry Stakeholders:

Effective  immediately,  the  State  Licensing  Authority  adopts  a  single  Universal  Symbol  (“Single  Universal Symbol”) for packaging, labeling, and on‐product marking of medical and retail marijuana, concentrate,  and  product  (“Inventory”)  pursuant  to  the  Medical  Marijuana  Rules  and  Retail.

Marijuana Rules, 1 CCR 212‐1 and 1 CCR 212‐2.

From  extensive  stakeholder  engagement  through  prior  focus  group  and  rulemaking  meetings Warning Symbol Used in Colorado that facilitated  a  comprehensive  review  and  discussion  of  our  labeling  framework,  the  State  Licensing Authority committed to evaluating the application of one Universal Symbol to both medical and retail Inventory.

The State Licensing Authority’s adoption of a Single Universal Symbol is intended to further protect  public  health  and  safety  by  enhancing  consumers’  ability  to  identify  products  containing marijuana.  Further,  by  eliminating  distinctions  between  Universal  Symbols  for  medical  and  retail marijuana,  the  Single  Universal  Symbol  works  to  simplify  and  improve  compliance  regarding packaging, labeling, and product marking requirements.

 

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New Security Requirements for Colorado Outdoor Grows

New Security Requirements for Colorado Outdoor Grows

Crop Insurance Availability Likely to be Unaffected

The Colorado Marijuana Enforcement division recently issued Bulletin 18-02 security requirements for outdoor cultivation facilities.  The rule becomes effective on January 1, 2019 requiring these licensees to have specific fencing and lightning around their outdoor locations.  

Will this additional security cause any insurance carriers to consider insuring outdoor crops?  

Historically, the cannabis insurance companies have been reluctant offer crop insurance outside of an enclosed building.   Clearly, these measures will reduce the risk of theft, but will not address other issues such as damage from weather, pest infestation, and disease that could expose the carriers to unforeseen risks.    

We don’t anticipate any changes with our insurance carriers offering outdoor crop insurance as a result of these changes.   

Colorado Outdoor Cultivation Security Requirements

1. The entire Limited Access Area shall be surrounded by a fence that measures at least eight feet from the ground, constructed of at least six gauge or higher metal chain link fence or a similarly secure material but may not be wood. All support posts shall be steel and securely anchored;
2. All entry gates shall measure at least eight feet from the ground and shall be constructed of six gauge or higher metal chain link fence or a similarly secure material but may not be wood;
3. The fence shall obscure the Limited Access Area so that it is not easily viewed from outside the fence; and
4. The perimeter of the fence shall be surrounded with lights illuminating all sides of the fence for at least 20 feet from the fence. Such lights may be, but are not required to be, motion sensing.

Colorado Industry-Wide Bulletin 18-02

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Required or Not-Required? Washington Cannabis Law for Product Liability Insurance

Required or Not-Required? Washington Cannabis Law for Product Liability Insurance

Cannabis licensees in the State of Washington continue to question if they must by law purchase product liability insurance to be considered compliant.   Let’s be honest, the process of reading and understanding marijuana laws can be complicated and arduous process.   Just like reading an insurance policy.  

It is important to know the majority of cannabis oriented commercial general liability insurance policies exclude what is known as Products and Completed Operations.  Or, basically product liability coverage for your cannabis product.  To be more accurate, the coverage basically provides liability coverage for your work or your product occurring away from your premise.  As an example, if you’re a cannabis licensee selling flower to a retail store who then sells to a consumer, the original product is no longer located at the original licensee.  The products and completed operations is likely to provide coverage should a claim arise because of the product.

The Washington law is codified under WAC 314-5-082 Insurance Requirements.

WAC 314-55-082
Insurance requirements.
Marijuana licensees shall provide insurance coverage as set out in this section. The intent of the required insurance is to protect the consumer should there be any claims, suits, actions, costs, damages or expenses arising from any negligent or intentional act or omission of the marijuana licensees. Marijuana licensees shall furnish evidence in the form of a certificate of insurance satisfactory to the WSLCB that insurance, in the following kinds and minimum amounts, has been secured. Failure to provide proof of insurance, as required, may result in license cancellation.

(1) Commercial general liability insurance: The licensee shall at all times carry and maintain commercial general liability insurance and if necessary, commercial umbrella insurance for bodily injury and property damage arising out of licensed activities. This insurance shall cover such claims as may be caused by any act, omission, or negligence of the licensee or its officers, agents, representatives, assigns, or servants. The insurance shall also cover bodily injury, including disease, illness and death, and property damage arising out of the licensee’s premises/operations, products, and personal injury. The limits of liability insurance shall not be less than one million dollars.

(2) Insurance carrier rating: The insurance required in subsection (1) of this section shall be issued by an insurance company authorized to do business within the state of Washington. Insurance is to be placed with a carrier that has a rating of A – Class VII or better in the most recently published edition of Best’s Reports. If an insurer is not admitted, all insurance policies and procedures for issuing the insurance policies must comply with chapters 48.15 RCW and 284-15 WAC.

(3) Additional insured. The state and its employees, agents, and volunteers shall be named as an additional insured on all general liability, umbrella, and excess insurance policies. All policies shall be primary over any other valid and collectable insurance.

While it is clear, the statute states commercial general liability insurance or commercial umbrella insurance, it fails to express product liability insurance must be procured.  I wonder if the writers of this law recognized “products and completed operations” is excluded and must be purchased separately.  Probably not.  Most interestingly, the law does imply through Section 1 “bodily injury, including disease, illness and death…. arising out of the licensee’s premises, operations, products, and personal injury.”   The keywords “arising out of” and “products” would lead some to believe product liability insurance would be required.

As a result of the lack of clarity, we contacted the Washington Cannabis and Liquor Control Board seeking a statutory interpretation through email of WAC 314-5-082.   Below is the screen shot from the email response we received on August 15, 2016:

Washington Product Liability Insurance The Washington State Liquor and Cannabis Control Board indicated “The statutes do not require a marijuana business to have product liability insurance.”