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The Future of Insurance for Vaping

The Future of Insurance for Vaping

Vaping has increased in popularity over the years due to its attractiveness as an alternative for smokers and an alternative vehicle for cannabis consumption. However, recent events in the news have both consumers and suppliers on edge.  In The News Deaths due to alleged vaping-related illnesses are popping up all over the country. These deaths are being attributed to everything from the flavored oils being used to a chemical used in cheap vape pens. Still others blame black-market cartridges containing THC. These incidents spurred some legislators on state levels and the national level to introduce bills calling for banning of vaping and e-cigarettes in whole or in part. Not Illegal Yet As of now, vaping and e-cigarettes are still legal and may be sold by businesses and used by individuals. That may not change anytime soon. What may change? The age at which consumers may purchase and use these products, how the products are made, and how they may be used.  How Will Your Insurance Be Affected? If you own a cannabis business or smoke shop that deals with vaping pens and/or e-cigarettes, there is no cause for alarm just yet. As long as these products remain legal and your business is selling legal products within the confines of the law, your insurance will not be affected. To be certain your coverage isn’t affected, be sure that you know where all of your stock comes from. Always use reputable vendors, and don’t stock products that might have shady origins. One thing to consider, if you don’t have it already, is products liability insurance. It is important to note that...
Work Comp Exemptions for Marijuana Businesses

Work Comp Exemptions for Marijuana Businesses

As the marijuana business landscape continues to change in California, so do the insurance rules. In many cases, what you don’t know could actually save you money. Nonprofit vs. For Profit With the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in January 2018, adult-use cannabis businesses now have a choice. These businesses may now be organized as non-profit or for-profit. There are advantages and disadvantages to both types of business formats. If you are still deciding which is right or your business, a great article on the pros and cons of each can be found here. Whether you are just starting out or thinking about converting your business from non-profit to for-profit status, you should know that status affects your workers’ compensation insurance. What Does Work Comp Have To Do With It? As you are aware, workers’ compensation insurance is based on the number of employees and their payroll. The more employees you have, the higher your payroll and the higher your insurance premium will be. Non-profit businesses must report all payroll, even for owners and officers. This is an added expense when for-profit businesses can exclude owners and officers from coverage. There are caps for payroll for the following: Executive Officers, Partners, Individual Employers and Members of a Limited Liability Company. The minimum reported payroll for included officers is $52,900 and the maximum is $133,900. However, even those amounts can have a significant impact on the Workers Compensation premium. Have You Made the Change? If your cannabis business has converted from non-profit status to for-profit status, you should be aware that the status...
Cannabis Insurance Get-Started Guide

Cannabis Insurance Get-Started Guide

The new year brings new opportunities in many parts of the country where cannabis has finally been legalized. Whether it was medical, recreational, or both, the ability to legally sell and obtain marijuana has many dreaming of starting new businesses. Finding a location and product suppliers are important. Getting the proper licensing is a must. Learn all you can about the business before you get started. And don’t forget about insurance. Hayes Brokers has been insuring cannabis businesses since 1996, when it all began in California. In fact, we wrote the book on it. Now, we can insure cannabis operations in every state where it is legal. Here’s how we can help you. Liability Insurance for Cannabis Businesses If you own a retail operation such as a dispensary, you’re going to need general liability insurance. Your landlord may require it, but even if you don’t have a landlord, this coverage will protect you in many other ways.   Premises liability will protect against the odd bodily injury (slip and fall) claim made by customers and visitors. It will also protect against property damage claims by those same visitors. This coverage works like prepaid legal. Should someone threaten to sue for bodily injury or property damage, the coverage will provide legal representation for your business. If your business is found liable, the policy will pay the claim (indemnify you) up to the policy limit. This is the most important coverage you can purchase as a business owner. One thing not covered under most standard Commercial General Liability policies for cannabis businesses is products liability insurance. This coverage can and should...
Trump Administration Reigniting War On Cannabis?

Trump Administration Reigniting War On Cannabis?

The high times, they are a-changin’. Or perhaps not. In 2014, then-President Obama quietly “ended the war on marijuana” by instructing federal officials to stand down from raiding cannabis operations in those states that had voted for legalization. In December 2015, he also signed a budget bill that included language that all but legalized medical marijuana on the federal level, specifically prohibiting the banning of federal funds being used by veterans for medical marijuana treatment in state-approved programs. That all may be changing. It has recently been reported that Attorney General Jeff Sessions plans to reverse the previous directive, granting the federal government the right to reignite the war on cannabis. Will this have an effect on your business and the cannabis insurance industry? Probably not. Here’s why. States Aren’t Going To Take It In those states where marijuana has been legalized, the industry is big business, creating significant income for business owners and tax coffers. Those states won’t take federal interference lightly. In fact, California Attorney General Xavier Beccera has vowed to “vigorously enforce our state’s laws and protect our state’s interests.” Colorado Attorney General Cynthia Coffman (now a candidate for governor) made similar statements. Also of note: 12-year-old Alexis Bortell is taking on Mr. Sessions. The preteen will have her day in court February 14, suing the federal government for her right to continue to access cannabis treatment for a seizure disorder. Money Talks It was widely reported after the Sessions memo came to light that cannabis industry investors were running scared. Forbes said just the opposite, quoting investors who noted that the directive didn’t really change...
California Newly Updated Cannabis Regulations

California Newly Updated Cannabis Regulations

Recreational cannabis use (also known as adult use) went into effect in California on January 1, 2018. State lawmakers and insurance regulators are still working to hammer out the details of how distribution will be regulated and what insurance will be required. Here is what you need to know with regard to the insurance side at this time (please note that these regulations could change at any time): Bonds An applicant for a distributor license will be required to show proof of surety bond in the amount of at least $5,000 payable to the State of California. This bond is to ensure payment for the destruction of any cannabis goods that may be necessitated by a violation of the Adult Use of Marijuana Act or any regulations adopted thereunder. At this time there is no paperwork associated with this bond requirement or the type of bond required (other than surety). We will advise as soon as this requirement has been finalized. Insurance Per the Bureau of Cannabis Control Emergency Regulation Text, the following insurance will be required for distributor licenses: General Liability: A distributor licensee must maintain at all times a commercial general liability insurance policy in an amount no less than $1,000,000 per occurrence and $2,000,000 in the aggregate. The State of California MUST be named as an additional insured on this policy. The State requires a 10-day notice of cancellation provision. A canceled policy will result in license revocation. Auto Insurance: Any distributor who will be or is distributing cannabis goods must provide to the Bureau of Cannabis Control proof of insurance for each vehicle and trailer...