These comments are about some of the issues facing the title: What might happen to crops?
At an earlier date, 1998, Oregon legalized medical cannabis. As a progressive state, there were many legalities in the law to protect the buyers from what can be described as pollens, molds and certainly pesticides. Several private firms entered the state to assist the growers in adhering to the law. Local officials had put into effect a first look program of all crops being forced to pass tests, but in a publicly run laboratory which we all know was underfunded and understaffed with people who really did not know cannabis crop issues related to purity.
A now well-known company had an indoor grow which produced cannabis at a huge discount. Most of the outdoor farms failed the state’s testing standards, especially for pine tree or grass pollen. Customers who suffer from allergy sensitivity to these items would suffer greatly, maybe even pass away, if they inhaled them. Outdoor farms, even at that early date, used extraction firms to filter out impurities which produced a clean cannabis product. But the issue for insurers remained: what are the liabilities if the former scenario is present?
When recreational cannabis was licensed in January 2017, several private companies came on board for cleaning crops. Apparently, most of these new entrants did not really understand Oregon’s strict requirements. In that first year of recreational there was an unusual amount of rain in Oregon which produced a host of new issues surrounding the crops, which were suffering from new “bugs” like mold, mildew and a new variant of pollen. The grow community soon realized their danger, put up money for extensive lobbying and got Oregon’s strict testing standards removed. What would be the rights of an injured or poisoned consumer now? Would insurance carriers respond and cover their insureds who violated the once protective law?
Even after 2017 this issue has remained on the table and much of the Oregon crop remains a liability for the public. As in many states, most of Oregon’s mom-and-pop farms went out of business: lacking solid insurance protection and existing customers like distributors of cannabis. Fortunately, there are now bigger and more law-abiding companies in the canna industry, but the insurance industry still lacks the subtle intelligence and underwriting experience to weed out offenders. There are a few lawsuits pending on this issue, but none have settled. Duty to defend has become a prominent topic not only in Oregon but the entire cannabis community. Damages are difficult to assess because most people do survive the negative effects of toxic inhalation with contaminated product.
The lesson here, not only in Oregon but ALL states where rec and med canna are grown, is to have a rigorous examination/testing lab, public or private, required, going to ALL grows and regularly checking for problem plant ingredients. At some point people will die from an infestation. The final issue is: will your insurance company protect you by policy provisions or run the other way? And when will there be standards for all cannabis businesses? Time will tell … more on this is in this issue. Have a great holiday season from Kanna Risk Management!