For years, medical marijuana has proved to be a problem for workers’ compensation cases — no surprise there. With the legalization of recreational marijuana in several states, however, the stakes have gotten much more severe.
With any new industry, there are bound to be some legal and logistical kinks that need to be worked out. Clearly, the burgeoning recreational marijuana industry is no exception. In states like California, Oregon, Colorado, and Hawaii, legislators and business owners have been very busy hashing out the details.
This leaves insurance providers concerned, especially when it comes to employees at marijuana dispensaries. Since federal laws still declare marijuana to be an illegal drug, providing insurance to such workers could be viewed as abetting in a federal violation. Even as big data makes insurance and risk assessment more accessible and transparent than ever, such employees would be prohibited from acquiring it due to legal restrictions.
This interpretation of the law is having a severe impact on these employees. As a result of this fear, Hawaii Employers’ Mutual Insurance (the largest insurer in the island state) is cancelling all workers’ compensation insurance policies for employees at the seven marijuana dispensaries opening later this year. Furthermore, workers at these businesses will be financially unprotected from accidental injury in the workplace.
It is not a stretch to imagine that other insurance providers could retract plans for the very same reason. Employees at recently opened and soon-to-be-opened dispensaries are left uncertain as to whether or not they will have a safe work environment in the future.
Workers’ compensation is a necessary protection for workers in the US. Workers do not need to “buy into” this insurance, nor do they have to be employed for any length of time to become eligible; they are covered for as long as they work for the business. It is a protection that employers are expected to provide.
Failing to do so can lead to hefty legal fees, since workers’ comp insurance is usually mandated by state law — though this can vary by state and depending on the size of the business. Obviously, such fees could impact the viability of the recreational marijuana industry. This means that, while marijuana may be legal on a state level, consumers may find it difficult to obtain it. There is no question that legal channels of sale beat risky, unregulated transactions on city streets or on the dark web.
Contradicting federal and state laws are leaving insurance providers with their hands tied. They are leaving businesses in this new industry at risk. And, most importantly, they are leaving employees without workers’ compensation insurance. It will be difficult for recreational marijuana to gain a true foothold in the market until these uncertainties are resolved.
