This post was originally published on this site.
Wayne Margulies is a cannabis insurance specialist with HUB International, the largest privately owned insurance broker in the world. The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views or positions of NY Cannabis Insider.
Growers’ Showcases will be a great short-term fix for NYS cultivators sitting on tons of weed from last season’s grow. As reported yesterday in New York Cannabis Insider, showcase events will allow conditional cultivators to gather and sell their products.
The idea, as introduced by the Office of Cannabis Management, mandates that organizers get municipal approval first, and only host the events in cities and towns that did not opt out of adult-use cannabis retail.
With few details, OCM guidance and/or regulations, will these happen this year? Again, some good news has been dangled, but …
When the details and regulations are worked out and the green light given, will you be prepared to participate from an insurance perspective? I foresee the regulations demaning protections, not only for the showcase organizers, but for participating cultivators and consumers, as well.
To date, the OCM has released little-to-no regulations on insurance requirements, except the known, state-required workers compensation and disability coverages.
Whether it’s required or just sound risk-management practice, here’s what I think you can expect:
Organizers: There are three basic insurance protections most every business avails itself of – property, general liability and, if they sell a product, product liability.
Organizers considering showcases should be speaking with their legal advisors to draft contracts for participation. Every contract, agreement, lease, etc. in every business sector has a section stating the insurance requirements with minimum limits of protection. No organizer should consider holding such an event on their property or leased property without all of these protections in place, and requiring participating cultivators and dispensaries to prove they have these policies.
I also think the OCM may require event insurance, but if not, the organizers should consider it for something as basic as slip-and-fall protection. These events will be a big draw, and risk ensues.
Cultivators/Dispensaries/Processors: General liability and product liability policies are essential to satisfying contractual agreements to participate, with product liability being essential for anyone who sells a product.
Of even more importance – will you have enough time to secure these coverages? With approximately 280 licensed cultivators and 463 licensed adult-use dispensaries in New York State, it is in your best interest to not assume the few carriers who offer policies in the cannabis sector can accommodate or respond to a massive glut of submissions.
The simple solution – begin the process of completing the needed applications by selecting a cannabis insurance specialist broker who has the expertise to properly represent you to the marketplace.