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Colorado Marijuana shooting and what that means for your business

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The Colorado shooting that was ‘linked’ to marijuana infused edibles left us scratching our heads just as much as everyone else in the cannabis industry. Although regulations and laws have their place, the absurdity of shifting responsibility from the murderer to Gaia’s Garden LLC, is a clear example of what we will be seeing as our industry continues to grow.

This isn’t the first product liability case that has popped up in the news and this is new territory for cannabis pioneers. The courts do not have a history of case law and legal precedent to go off of which opens doors of opportunity for the sue-happy. Product liability cases are ranging from people getting ‘sick’ to unfortunate fatal cases such as the Colorado shooting and with increased media attention it is unlikely this band-wagon will slow down any time soon.

One common pattern that we are noticing in product liability cases is that if your business can be linked to the product in question, it will. This means that even if you are a grower and your flower has passed through the hands of processors, packagers, delivery and retailers… lawyers will look to sue everyone they can down the line. If this happens to your business, many questions will need to be answered. Did the label clearly list the amount of THC in the product; were there traces of inorganic ingredients in the product, were all of the ingredients in the product listed on the package. For the dispensary, what procedures did they follow to ensure the product was safe for consumption, was the product stored safely and securely? Is there any chance the product could have been tampered with? Trust me, we’re just getting started. It’s not a simple matter of whether or not THC could cause this type of behavior. The industry doesn’t have the stamp of approval from the FDA stating that products are safe for public consumption. The cannabis businesses in this case will now need to prove their products safe.

There are cases where the decision has to be made to withdraw a product. This can be an action to protect the business from others who’ve purchased the product and join in on the lawsuit. Even if you believe 100% that the product did not contribute to the accusation, others’ may file claims and the product will have to stand up to rigorous testing; all which can be devastating to the bank and the brand. Product withdrawal coverage is an option for cannabis operations and may be the best course of action as a precaution, or cost-saving measure.

Cover Cannabis specializes in product liability insurance for cannabis businesses. Our policies are typically written on standard ISO forms which include a duty to defend and settlement expenses for product related injuries. Contact us Today to find out more.