Hello all. I have two items in this issue’s article: Hemp/CBD issues and how to help your defense counsel when a suit is filed.
First off, everyone in the cannabis business knows that the hemp/CBD market has literally exploded since the Farm Bill was passed in 2018. Estimates are that 400,000+ acres have been planted and much of it has made its way into dispensaries as a legal and not advertised lethal plant.
We wrote about Delta-8 a couple of issues ago and warned cannabis businesses about this and other transformative plant altering that for now is legal but needs to be watched/supervised for likely side effects. 20 states are now monitoring this transformation from advertised harmless to dangerous.
The cannabis cultivation companies have an excess of hemp, and much will go to waste. But in searching local and national dispensaries’ products, KannaRiskManagement has discovered that in order to sell the excess crops, companies have been altering the genetic makeup of hemp to get customers high legally. Because the regulatory framework is still so vague, national chains have been reluctant to embrace CBD except with topicals. You, as brokers, must watch this development in your insured’s dispensary product mix, because there are plaintiff actions coming.
Second, a future issue for litigation in the cannabis field is who will qualify to be your insured’s “expert witness” given the newness of cannabis litigation. Oregon DOES NOT allow expert witness testimony: wow! How do your customers defend themselves in that state? The filed cases in Oregon are picking up steam weekly as the dangerous plaintiff bar gets more well‑informed.
California takes a more traditional approach and does allow experts, as do other jurisdictions. So, as the courts fill up with shark-infested-like plaintiff-filed cases, each state, because cannabis is still regulated state by state, will promulgate rules and regulations. The costs to your clients will be very high. Is there adequate — or even any — coverage for these fees?
The advantage of expert testimony has been proven over multiple decades. Having an expert well in advance of trial or discovery makes your client’s case to settle or fight. If there are clear and present dangers an expert witness can quantify the potential loss amount, determine the value of a business and avoid extensive courtroom costs. It is not too early for looking around at where your insured’s expert witnesses will come from. Just remember that we are only in the beginning of lengthy legal battles over cannabis: your insureds cannot have too much coverage and informing them about this will help when the case(s) comes in … as they will.
See you next time … be safe and well,