In a recent article in Forbes, "How The Coronavirus Pandemic Will Affect The Cannabis Industry," the author observes that "[c]annabis businesses have a difficult time getting standard insurance plans." Well, yes ... and no. While the commercial insurance options available to cannabis-related businesses may be may be more limited than options for other types of businesses, insurance IS still available for cannabis-related businesses. In fact, some states require cannabis-related businesses to have certain types of insurance in certain amounts. And, to be clear, that coverage is currently available for cannabis-related businesses. In fact, many of those businesses already have commercial general liability, product liability, property, and other policies. And, as with any other type of business, now is the time to check those policies. The availability of coverage will turn largely on the specific language in those polices. But, in light of the mounting costs of the current novel coronavirus outbreak, it is well worth cannabis-related businesses at least reviewing their policies and checking to see if they have any coverage. In other words, do not just assume that there is no coverage.
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The Three C's: Coronavirus, Cannabis, and Coverage
And of course, the impact on all of the employees in the sector cannot be understated. Cannabis businesses already have a difficult time getting standard insurance plans. This means most companies will not receive reimbursement for providing their employees additional paid time off or any other costs they may incur as a result of the pandemic, leaving many businesses with painful decisions about how to deal with employees that other businesses do not face. Exacerbating the problem, because cannabis remains illegal at the federal level, cannabis businesses will not qualify for assistance under the $850 million bailout package that looks set for passage by Congress. What was already shaping up to be a difficult year for cannabis businesses may soon morph into a full on catastrophe for business owners and employees alike.