What Florida medical marijuana businesses need to know

Medical marijuana has quickly become a lucrative industry in Florida since 2016, when Amendment 2 passed, which created Florida’s medical marijuana program. And there’s even more money to be made now with the passage of Florida Senate Bill 182, which allows smokable forms of marijuana. In fact, it’s predicted that by 2022, the medical marijuana industry in Florida will be worth $1.6 billion

The prospect of cashing in on the green might make you want to open a dispensary or manufacturing facility. But before you do, there are a number of things you should be aware of in order to protect your business, including current laws and what type of insurance your budding business will need.

The laws

Before Amendment 2 was passed, marijuana was only allowed to be taken in the form of oils, sprays, tinctures, edibles, and via vape. You could neither buy, nor smoke, marijuana.

In 2016, when voters passed the Florida Medical Marijuana Legalization Initiative, or Amendment 2, it legalized medical marijuana businesses and expanded the list of qualifying conditions a person can have to buy medical marijuana, including those involving mental health. 

In March 2019, Senate Bill 182 overturned the ban on smokable forms of medical marijuana. This bill  legalized the smoking of marijuana for adults, and  patients under age 18 who are diagnosed with a terminal illness, or who have a pediatrician who’s given a recommendation. The bill also permits patients to order a 35-day supply.

Staying in line

The U.S. Department of Justice is a little hostile toward the marijuana industry, so the best way to keep federal law enforcement away is to comply with state laws and adopt best practices. One great way to do that is by having insurance, which more states are requiring. 

If you plan on starting a dispensary, or already have one, pay special attention to Section 29 of the statutes. Medical marijuana patients are required to present an ID card along with a physician’s certification. Issues like establishing standards to ensure proper security, testing, inspection, labeling, record keeping, and overall safety are all detailed in full in the statute.

The Florida Department of Health Office of Medical Marijuana Use also offers complete information on current medical marijuana laws that is helpful for businesses. 

The Insurance you need for your marijuana business

Every business needs insurance, and a medical marijuana business is no different. It will need both first-party and third-party liability insurance. 

Your marijuana business will have its own unique issues, such as staying in legal compliance, mitigating customer claims, and transport. We have listed some other insurance policies you might need below. 

  • General liability: This insurance is highly recommended and will help you pay damages if someone physically hurts themselves on your premises, or sues for mental or emotional distress. Other issues like libel, slander, and false arrest also fall under this policy. 
  • Product liability: This is a subcategory of general liability that covers you if you’re found liable for a defective product that causes illness or unwanted side effects. This is a complicated and evolving issue in the marijuana industry because of the various types of licenses and combining of businesses. Any medical marijuana business that sells tangible products should consider this type of policy. 
  • Commercial property insurance: This insurance protects property – buildings, products, equipment, and personal property used in your business – from fire, theft, and natural disasters. Add-on coverage is also available for loss of income caused by any of these events. 
  • Crop insurance: If you are a cultivator, this protects your crops against both indoor and outdoor hazards like fire, soot, water, and temperature. It does not, however, protect against things like rot.
  • Employee protection liability: This insurance will protect your business from employee-related issues that include discrimination, wrongful firing, any type of harassment, and other problems. And if you have a dispensary, look at coverage from claims by third parties.
  • Workers’ compensation: This insurance covers employee workplace injuries, and is required by most states.
  • Commercial automobile: If you deliver your product to patients, this insurance will provide more coverage for the things covered by your personal policy. If you use your vehicle for business, you need a commercial policy.
  • Inland marine: This coverage is designed to protect valuable goods in transit. Marijuana is a delicate substance and makes a nice target for thieves. If you want to be on the safe side, take a closer look at inland marine.
  • Cyber insurance:  Many medical marijuana businesses are invested in technology. There are HIPAA regulations for dispensaries and other issues. Your company is legally required to protect data. A cyber insurance policy helps ease the risk of losses from hacking or data breaches.

Avante can help with your commercial insurance needs

We’ll make sure you have the right coverage to protect the business you’ve worked so hard to grow. Contact us to discuss your needs or request a free, no-obligation quote.

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.