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Guest Blog: Insurance Challenges for Cannabis Businesses

As the cannabis industry grows and business challenges proliferate, there are a variety of legal issues that are increasingly of interest to cannabis operators. Evoke Law specializes in trademark protection and brand licensing for the cannabis industry, and also offers a wide range of consumer protection legal services, including packaging and labeling compliance, recall plans, and counseling to avoid making impermissible product health claims. We also leverage our extensive network of diverse legal specialists to offer our clients information and resources that will bring additional overall value. Our first Guest Blog is by Jason Horst, Esq., Principle at Horst Counsel, on the topic of insurance. Cannabis companies keep hearing that they need to “cover up.” However, California’s regulations only require those holding distributor licenses to carry general liability insurance, and those regulations do not require non-distributor licensees to carry any liability insurance at all.  Nevertheless, many California cannabis operators are finding themselves subject to other requirements that they carry liability insurance. For example, some local jurisdictions have begun establishing their own insurance requirements. In November 2017, Los Angeles rolled out an ordinance requiring that every permitted cannabis operator in the City carry products liability insurance. Complying with these cannabis insurance requirements is both trickier and more fraught than it might appear, so it is critical for operators to be diligent on multiple levels. When it comes to local cannabis insurance provisions, it is important to understand that these requirements tend to vary significantly from jurisdiction to jurisdiction. Los Angeles requires all operators to carry products liability insurance, while Long Beach requires public liability insurance. The City of Coalinga has gone so...