As the legal cannabis industry continues gaining momentum as one of the fastest growing markets in the US, cannabis businesses are now facing certain challenges that comes with their new place in the world. Claims and lawsuits against cannabis businesses are cropping up more and more for issues ranging from inadequate warning labels, presence of pesticide residues in products, to unsafe handling practices during the manufacturing process. Unlike 20 years ago, if someone gets sick from ingesting a defective cannabis product, he or she now has legal recourse.
It may be a surprise that it’s not just the growers and manufacturers who are held liable for defective products – retailers are also at risk. If a consumer purchases a defective product from a retailer and becomes ill, that dispensary owner can be held liable, even if there was no prior knowledge of defects in the product. The rationale behind imposing liability on dispensary owners is that it will pressure them to vet manufacturers they do business with more carefully and only work with businesses that have a proven track record of making high quality, safe products. While states tend to favor those who had no part in the manufacturing of a defective product, there is still risk of liability.
According to Nick DiNicola, Principal at CBZ Insurance Services, there are a few things dispensary owners can do to protect themselves.
“Because dispensaries are dealing directly with the consumer, it is hugely important to understand who their suppliers are and how they do business,” said DiNicola. “Also, dispensary staff need to communicate clearly with consumers about dosages and the risks associated with the products. Most importantly, these businesses need to protect themselves with insurance specific to their operations.”
The takeaway here is that cannabis dispensary owners should not assume they cannot be held liable for defects in the cannabis products on their shelves. The bottom line is that the best defense is a good insurance policy.
CBZ Insurance Services is dedicated to the cannabis industry and has a long history of helping businesses get the right coverage for their operations. Complete an inquiry and within 48 hours you will receive a quote and an application to start protecting your future. Please call (415) 941-7635 for immediate service.