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Marijuana-related products raise liability concerns

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Marijuana-related products raise liability concerns

Marijuana-infused gummy bears anyone?

That is one of the so-called “edibles” in the marijuana industry that makes insuring its product liability risks particularly challenging, experts say.

The “high” that marijuana products produce in various forms could lead to mishaps that create liability issues for its manufacturers and retailers, they say.

Cannabis is like alcohol, where “you’ve got many dozens” of psychoactive ingredients, “many of them being marketed to a whole new crowd of people,” said Ian A. Stewart, a partner with Wilson Elser Moskowitz Edelman & Dicker L.L.P. in Los Angeles.

Possible claims could include mislabeling and misrepresentations about its psychological effect, he said.

“The onsite consumption risks are huge,” he said. In the “edibles” market, where marijuana is presented to be consumed like food, the effect is more intense than smoking, while also “most likely to be consumed by newbies, people without a history of smoking,” who are drawn to these products, he said.

Let’s say you have half a gummy bear and “nothing’s happening,” so you take some more, said John G. Clarke, senior vice president of marketing for Richmond, Virginia-based James River Insurance Co.

Two-and-a-half hours later, “you’re really, really high. The good news is that for most people, tomorrow morning you’re going to feel just fine,” which is not a problem — unless you are driving, he said.

There is also the issue of pesticides in marijuana’s growing phase, he said.

In addition, “there’s manufacturing issues, just like any other product being manufactured that’s ingested.” Product liability is the “scariest type” of marijuana claim because not only is it an issue of public safety, but if a claim is disputed it can lead to up to two years of litigation, and is most likely to put a company out of business, said Ronnie Cabral, cannabis group practice leader at San Francisco-based wholesale broker Crouse & Associates Insurance Services.

 

 

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