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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...
So Your State Legalized Marijuana…

So Your State Legalized Marijuana…

Election 2016 was a banner year for those in the cannabis industry. On November 8, 2016 four states approved or legalized marijuana for recreational use (California, Maine, Massachusetts and Nevada) and four states approved or legalized for medical use (Arkansas, Florida, Montana and North Dakota). If you plan to open a cannabis-related business when the laws take effect, it is important to know the laws and be in compliance with state and local regulations.  Hayes Brokers can also help, by providing risk management and insurance policies for your new business. Insurance for marijuana-related businesses isn’t all that different from other businesses, but there are a few key things to note before you buy. The Basics Whether you rent or purchase a location to set up shop, it is important to cover all the bases. Liability: Also known as slip-and-fall coverage, liability insurance provides legal protection to your business in the event of bodily injury or damage to property of others while visitors are on your premises. Nearly every landlord will require this coverage and may require higher limits due to the nature of your business. The landlord may also require that he be named as an additional insured on your policy. Property: This coverage reimburses a business for damage or loss of property due to covered causes of loss. This will include building, contents, stock, furnishings, equipment and other items, depending on what is included in the policy coverage form, as determined by you and your insurance broker. Auto: A minimum of hired and nonowned auto liability insurance should be included in your insurance portfolio. If your business provides...
Marijuana and Your Workplace

Marijuana and Your Workplace

It has been 4 years since cannabis was first legalized for recreational use in Colorado and Washington, followed shortly by Alaska and Oregon. In that time, the insurance industry has learned a lot about how cannabis usage affects business insurance in those states. Questions about employee rights, the legality of drug testing post-hire and other human resources issues should always be handled by an experienced human resources (HR) professional or qualified labor attorney.  While Hayes Brokers are not legal professionals, we can advise on the insurance aspects of cannabis use in the workplace. Here is how marijuana usage on the job may affect your insurance policies and premiums: Can You Get Insured or Bonded? As the legalization of marijuana continues across the country, insurance companies may begin to include questions about drug free programs and marijuana usage on applications as part of the underwriting process. A strict company policy on these issues will make these questions easier to answer. An employer’s main concern should be providing a safe work environment that also allows for the completion of projects in a timely manner. Recreational marijuana usage by employees may affect a company’s ability to do so. Failure to perform as required by contractual obligations may result in your bonding company nonrenewing your bonds. Finding replacement bonds when nonrenewed for this reason may not be possible, or may come at increased cost. Large or frequent claims may result in nonrenewals or declinations of coverage by liability insurance companies, as well. Impaired employees can contribute to both of these, costing employers in increased insurance premiums for anywhere from 3-5 years from the...
The Future of Marijuana Insurance

The Future of Marijuana Insurance

In just a few short months, the last of those Lloyds of London cannabis industry insurance policies will roll off the books and into history. What does that mean for the future of marijuana insurance? What does it mean for your policies? Profitability vs. The Political Machine When Lloyds left the industry, many thought it was due to high numbers of claims or revenue losses on their policies. However, the market position for Lloyds was a good one, and by all accounts the book of business was profitable. So why leave? The company line was that Lloyds was exiting until the cannabis industry was legalized on a federal level. Of course, a major insurance syndicate pulling out of the market is indicative of some strong backstage political machinations on both sides. Who Will Replace Lloyds? Of course, Lloyds wasn’t the only insurer to provide policies to cannabis growers and distributors, but it was certainly the largest. Other insurers familiar to the industry are stepping up to take on the policies being nonrenewed by Lloyds. They aren’t the only ones. New insurers are entering the marketpace, eager to get their fair share of the policies being nonrenewed. They are also looking to take on new business being created by the increasing legality of cannabis across the country. Unfortunately, more insurers and more competition for business isn’t driving down the premium. In fact, the opposite is true.  Those businesses who lost their Lloyds policies know what you are probably going to find out soon – premiums are going up.  Here’s a good reason why: The Industry Is Maturing As the legal...