Cannabis remains one of the fastest growing industries with no signs of slowing down. According to a recent article in Forbes Magazine, the legal cannabis market is poised to grow 20-30% per year to the tune of $50 billion by 2026.With great opportunity comes numerous risks. Claims and lawsuits against cannabis businesses are increasing in frequency and magnitude. As an insurance broker who specializes in the cannabis industry and works with a wide variety of cannabis, hemp and CBD businesses in every state where cannabis laws are established, our recent analysis has unveiled the top five insurances your cannabis business needs in 2022.
General liability is the most essential coverage your business needs to protect you from a variety of claims including personal injury, bodily harm, property damage and other situations that may arise including slander, libel, copyright infringement and more.
Since general liability is not always required to obtain a cannabis license, many businesses are tempted to forgo the expense. This is one of the biggest mistakes you can make as one single lawsuit has the potential to cripple your business. With a comprehensive, cannabis-specific general liability insurance policy in place, your insurance company, not you, will pay medical expenses and property damage claims from third parties, in addition to hefty legal fees and fines.
If you own a dispensary, grow operation, warehouse, testing facility or any other type of cannabis business with inventory, you need to protect your assets from potential loss or damage. Property & casualty (P&C) insurance safeguards your business against common and costly perils such as a fire, lightning, explosion/implosion, and even less common – but still possible – risks like riots, strikes and terrorism.
P&C insurance not only pays for damages to your business property resulting from a covered loss but it also covers the contents within your place of business, including office furniture, computers, inventory and other assets essential to your business operations. There are policies that will also provide the funds required to keep your business afloat until the damages from the loss are repaired. Any cannabis business with a physical property and location(s) should have a comprehensive property and casualty P&C policy in place.
Product Liability/Product Recall
Recently, we’ve seen a dramatic influx of product liability claims, and in particular, product recalls. Lawsuits have ranged from a single plaintiff seeking damages for personal injuries to class action lawsuits where a defective product is tied to an entire group of claimants.
As a cannabis business owner, you can be sued for any damage resulting from products that cause harm to others, this includes false advertising, mislabeled or defective products. No matter where you are in the supply chain, your business could be held liable. The process of defending litigation or reaching a settlement agreement can completely drain a company’s resources. You’ll have to deal with regulatory compliance, producing and distributing product warnings, recalling products, claim investigation, product testing and additional risk assessment.
Product liability insurance is often overlooked, especially by small to mid-size businesses. However, your cannabis business needs this type of coverage if you sell any goods or products that end up in the hands of the public. In fact, your business may be contractually obligated to have product liability insurance. One such lawsuit is enough to fold a business due to costly legal fees and fines, as well reputation damage beyond repair.
Product liability insurance is designed to protect your cannabis company from claims that can happen anywhere along the supply chain, including product contamination, mislabeled products, false advertising or defective products. With proper coverage, your insurance company will pay for damages and legal expenses if you are sued, up to your policy limits. Your product liability policy will also cover any medical expenses for those who are harmed by your business. Making sure your insurance policy includes product liability insurance should be a top priority in 2022.
Cyber Defense/Data Breach Insurance
Cyber fraud and data breaches are two of the greatest risks facing cannabis companies in 2022. With so much cash pouring into the space, cannabis businesses of all sizes are bulls-eye targets for cybercriminals. Even the smallest of cannabis businesses are at risk of data breaches because they are part of a larger interconnected network of seed to sale vendors. These types of crimes can have detrimental effects on your business in numerous ways. In the case of a data breach resulting in the disclosure of a third party’s private information, the third party could sue your business. The SEC could also find your company negligent in cyber fraud cases and impose significant fines.
By forgoing cyber defense & data breach insurance, your business will be solely responsible for expensive legal bills, significant revenue losses and hefty fines and penalties from regulators. Cyber defense & data breach insurance is a must-have coverage in 2022, and beyond, to protect your business from cybercrimes.
Directors & Officers Insurance
If you are looking to secure venture capital or funding from investors in 2022, and/or attract and retain qualified leadership, you need directors & officers (D&O) Insurance. D&O protects corporate directors and officers, as well as their spouses and estates, from being personally liable in the event your company is sued by investors, employees, vendors, competitors, customers, or other parties, for actual or alleged wrongful acts in managing the company. In the event of litigation, your D&O insurance will cover legal fees, fines, settlements and other expensive costs.
D&O is often the most overlooked coverage because many cannabis businesses are independently run, and no one foresees the potential for operational failures and mismanagement. However, businesses with any sort of vision for growth should make D&O a top priority. It not only protects your current executives and board members but is critical in attracting leading talent in the space, as well as drawing in new investors to scale up your business. In fact, we’re seeing more prospective investors and board members requiring D&O insurance prior to engaging with a company to ensure they are fully protected in the event of litigation.
When it comes to mitigating risk in this business, the stakes are sky high. Cannabis companies that have not incorporated risk management into their business/operational plans will need to in 2022. It all boils down to the THREE P’s: being “Proactive, Prepared and Protected.”
Original Post: cannabisindustryjournal.com
A Toast to Cannabis Beverages, a Growing Market Segment
Even if you don’t know much about cannabis pop culture, people are probably familiar with the phrase, “puff, puff, pass.”’But what if the future of cannabis is really more like “sip, sip, sip“? That’s what has everyone from the largest cannabis companies to the most mainstream beverage companies buzzing.
Soft drinks, beer, juice, tea, coffee and bottled waters are major categories of the beverage industry, valued at approximately $1.5 trillion globally and $150 billion in the U.S. It’s no secret beverage companies have long eyed the next big growth opportunity in the cannabis market. Beverage makers, large and small, are now experimenting ‒ some even bringing to market ‒ cannabis-infused drinks in each of these categories.
Pepsi Co. created a hemp-infused energy drink; Canopy Growth introduced a top selling CBD drink, Quatreau, and the company is backed by beverage industry leader Constellation Brands. Meanwhile, Molson Coors revealed a cannabis-infused beverage line with Truss, and Boston Beer developed cannabis-infused beverages in Canada. Jones Soda recently announced its launch of a line of cannabis-infused sodas under the name Mary Jones. These are just a few of the major beverage industry names adding cannabis drinks to their product lines.
That’s not to mention the established cannabis beverage brands and market leaders such as BellRock Brands, Keef, Evergreen Herbal, CannaCraft and CANN, or infusion technologies companies like Vertosa and mainstream beverage packagers such as Zukerman Honickman.
When will you be able to go to a bar, restaurant, concert venue or lounge and drink your cannabis? Maybe sooner than you think.
Right now, several states are formulating plans to launch adult-use markets, with New York and New Jersey figuring prominently. And with more mature state markets contemplating venues such as lounges, many are pushing for expanded access to beverages. Internationally, Canadian regulators have taken notice of the segment and recently issued regulations on cannabis beverages.
It’s the mainstreaming of cannabis.
Companies are betting big that consumers who choose not to consume cannabis because of perceived social stigmas or fear of getting “too high” from highly concentrated THC products, or who simply don’t want to smoke or vape a product, can find an alternative in cannabis beverages. Cannabis beverages offer consumers an option to microdose and are often more socially acceptable and user-friendly ways to consume cannabis.
It makes sense given larger trends. Consumers who are health-conscious are less likely to smoke anything, let alone cannabis, and are looking for alternatives in their lifestyle choices ‒ and for a relatable product experience that doesn’t ruin the next day.
Think of it this way: Cannabis beverages are to high-THC cannabis products such as vapes, butter and shatter what beer and wine are to high-proof alcohol products such as tequila, vodka and gin. Consequently, just as the lower alcohol content of beer and wine makes those drinks more appealing to more people for more situations, cannabis drinks can reach a larger consumer base than traditional cannabis products.
However, for cannabis beverages to meet their growth potential, a number of things need to happen according to industry experts.
First is the harmonization of state requirements on labeling, testing and packaging and the regulatory acceptance of beverages as a form factor play a role. If regulations are not harmonized, it will impact the cannabis beverage companies’ ability to scale. Second, cannabis beverages need their own separate regulations. Too often, cannabis beverages are shoe-horned into edibles when they are different and distinct product offerings. Third, opportunities for on-site consumption are critical to mainstreaming cannabis beverages.
And, cannabis is still federally illegal. Therefore, many beverage giants are approaching and entering the industry cautiously. Alcohol companies have largely been quicker to jump into the fray than traditional, nonalcoholic beverage brands. It is illegal to combine alcohol and cannabis in the United States, however, so the cannabis-infused market consists of water-based drinks.
Due to national prohibition, beverage companies bringing cannabis into their portfolio are largely operating under state-by-state laws and a varied regulatory environment – catering to states with adult-use cannabis programs. This patchwork of regulation impacts business operations from advertising and marketing to packaging, labeling and even dosing instructions. For most companies, the cost of doing business increases in this operating environment as laws vary across state lines.
When federal prohibition ends, a policy priority for the industry and regulators will be to reconcile the regulatory environments and state-by-state differences. We’re also likely to see the industry come together and advocate for responsible consumption, standard policies and best practices. Expect massive public service campaigns and industry and trade groups coming together to educate the public and policymakers on smart, responsible use of infused cannabis beverages.
Today’s federal cannabis prohibition is also why some manufacturers are embracing CBD-only drinks. Sales of CBD drinks (federally legal as they are derived from hemp versus the psychoactive component of THC) are expected to hit $2.5 billion and are available in places where cannabis is not legal yet.
Meanwhile, THC-infused beverages will account for $1 billion in U.S. sales by 2025, according to Brightfield Group. While not a huge part of the pie in relation to the $24 billion cannabis industry, cannabis infused beverages are one of the fastest growing segments.
So don’t be surprised if sometime soon you see a cannabis drink for sale. Companies are betting big and it might just be time to imbibe.
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Source Here: cannabisindustryjournal.com
It’s OK If Some Families Aren’t Ready to Go Maskless, CHOP Doctor Says
As COVID-19 cases continue to drop, most restrictions, including indoor mask mandates have been lifted throughout the Philadelphia region. But some families, particularly those with young children who are not eligible to be vaccinated, may have concerns about protecting their children.
Dr. Julia Shaklee Sammons, a physician in the division of infectious diseases at Children’s Hospital of Philadelphia, detailed why it is an appropriate time to drop mask mandates. She also acknowledged that some people may not feel comfortable going maskless.
“We are seeing some of the lowest levels of COVID-19 disease activity and hospitalizations to date,” Sammons said during a media briefing Monday. “At my own institution, we have seen test positivity decline from a peak of over 40% at the height of the omicron surge to now around 2%.”
Sammons, who is also an assistant vice president in CHOP’s Office of Preparedness, Prevention and Response, said this trend is expected to continue over the next several months. She also noted that the region is at a different point than when the pandemic began two years ago – vaccinations and natural infections have built a much higher level of collective immunity.
“And finally we are also seeing differences in the virus,” she said. “While we expect that new variants will emerge, what we saw with the most recent omicron variant is that while it was more contagious, it was less virulent. I can say as a pediatrician, we saw a large number of children infected with the omicron variant – many more than we had seen in other stages of the pandemic – but many were presenting with clinical syndromes that are very similar to the ones that we see year after year during peak respiratory virus season due to viruses such influenza and respiratory syncytial virus.
“These syndromes are things like croup and bronchiolitis, so for us, these were all signs we are beginning to move to another stage of the pandemic.”
Though the conditions are right in certain places to start lifting mask mandates, Sammons said that some communities may be slower to lift COVID-19 restrictions and that mandates might need to be reinstated if case counts and hospitalization rates spike again.
“Even with lower cases numbers, some individuals may not be ready to unmask yet and that is OK,” Sammons said.
In areas without mandates, going maskless becomes a personal decision that families must make based on their risk tolerance, especially for parents of unvaccinated children or those who are immunocompromised.
Because it remains a fluid situation, Sammons recommended parents consult guidance from local public health officials and the Centers for Disease Control and Prevention to get a better sense of the level of COVID-19 transmission in their areas.
She also encouraged anyone who has not been vaccinated to do so, noting it takes time to get to the highest level of immunity. Pfizer’s COVID-19 vaccine has not yet been authorized for children under age 5, but Sammons said it may happen as early as April.
Source Here: phillyvoice.com
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