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Hash Oil Headaches

Hash Oil Headaches

As new industries arise, old problems can resurface and cause a lot of headaches for employers. The most common one for employers right now is employee status. Who is considered an employee? How can you provide work for someone without being responsible for workers compensation premiums for them, especially if the work is high risk?

Uber has been grappling with the independent contractor vs. employee issue for a few years now. The cannabis industry is just beginning to have the same problems and it all boils down to hash oil.

What’s the Problem?

When produced commercially, hash oil can be expensive. Cannabis operations may find it cheaper to hire someone to make the hash oil for them using the butane extraction process, or purchase it from a local “manufacturer”.

This independent contractor may be working out of his or her own home, or in a makeshift facility, such as a shed, near the cannabis dispensary. The butane process is dangerous, and without proper venting and proper equipment, explosions can happen. These explosions cause property damage as well as injury to the independent contractor.

How Is This Your Problem?

It may seem like a cut-and-dried issue: you hired an independent contractor, so his injuries are his problem, not yours. Unfortunately, it isn’t that simple.

Like in the case of California Uber drivers suing for employee status to cover on-the-job injuries, independent hash oil contractors are contacting law firms looking for someone to pay their medical bills. That someone will most likely end up being you.

You may have an employment contract with someone signifying he is an independent contractor, but that contract isn’t the final say. In most states the Department of Labor makes the final decision on employment status, and that may not come until after a claim has been made.

What You can Do To Protect Yourself

The best ways to protect yourself are these:

  • Engage in a risk management analysis with your insurance broker about all aspects of your operations, even those where you use independent contractors.
  • Purchase workers compensation insurance.
  • Provide a clean, safe, healthy work environment for all employees, even independent contractors.

You may think you are saving money by hiring an independent contractor, but a high risk job like hash oil extraction may end up costing you more money in medical bills and legal fees than you may be prepared to pay. A qualified insurance broker with experience in marijuana operations can help you understand all of your options.


  1. 5 Things You Need to Know About Insuring Your Business - […] members and even volunteers could be considered as employees. Independent contractors like your hash oil extractor may also be…

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