Mainebiz

V O L . X X V I I I N O. X I I I J U N E 2 7 , 2 0 2 2 22 B U S I N E S S O F C A N N A B I S F O C U S B Y T O M Q U E N T I N B Y T O M Q U E N T I N H OW TO W hile the cannabis business may be booming in Maine, with differences in federal versus state laws it remains a challenging industry to navigate. Much attention is paid to issues related to banking, but insurance is another highly regulated space that poses unique complications. Here are several key consider- ations when insuring your cannabis business. Choose the right provider Not all insurance agencies are will- ing to entertain the risk of covering a cannabis business. ere are a num- ber of insurance carriers who focus exclusively on cannabis operators, and finding an agent who has relation- ships with those carriers is critical. A prudent first question would be to ask an agent which carrier they intend to place you with, and about that carrier's appetite for cannabis operators. Evaluate coverage At a minimum, every cannabis opera- tor should carry general liability, prod- uct liability and commercial property coverage. If the operator has employ- ees, worker's compensation should be included as well. Landlords often require minimum general liability limits and to be listed as additional insured on the tenant's policy. Many lease agreements obligate the tenant to insure the building on their commercial property policy in addition to their own contents. e hazards posed by cannabis cultivation and extraction result in increased com- mercial property premiums that build- ing owners do not want to be respon- sible for. Transferring risk to the tenant is a priority for landlords. Protect your leadership team Directors-and-officers liability insur- ance, called D&O coverage, is an increasingly sought-after line of cov- erage. However, once the minimum coverages are secured, cannabis opera- tors are often left with limited funds to purchase more insurance. As your business grows, you will likely welcome directors and officers into the fold, making strong D&O cover- age essential. Directors-and-officers coverage protects the individual assets of a business' directors and officers if they are personally sued for actual or alleged wrongful acts in managing the business. To obtain and retain top talent for the company's board and C-suite positions, cannabis operators need to have coverage in place so that candidates know their personal assets are protected. As the cannabis market in Maine and nationwide continues to mature, economic forces will make it more challenging to stay competitive. Perhaps the endgame for some can- nabis operators is not to become the next big player, but to be acquired by another entity. Any time there is M&A activity, there is always a risk that directors or officers may be sued for financially misrepresenting the company's assets. Almost every cannabis operator is exposed to some type of D&O risk. With higher premiums than non-can- nabis businesses, it is important to make sure you purchase a quality policy. Some insurance carriers willing to write D&O coverage for cannabis businesses will include exclusionary language in their policies which substantially limits the scope of coverage. is being the case, it is important to consult with a knowledgeable agent who understands the risks faced by cannabis companies and how policy language will or will not transfer those risks away from the company. Tom Q uent in is a licensed property and casualty insurance agent and Certif ied Insurance Counselor at Paquin & Carroll I n s u r a n c e i n B i d d e f o r d . Navigate federal and state laws to insure a cannabis business Whether you've been thinking of replacing or expanding your existing deck or if you're adding a new deck to your home or camp, Hammond Lumber Company has everything you need to get started right away. You'll find a variety of both wood and low-maintenance composite decking options, railings, posts, fasteners, and accessories from leading manufacturers. Hammond Lumber Company will be happy to guide you through your selection options for your deck project and create the right design—and we will even come out for a jobsite consultation if you'd like. Let us help you bring your vision to life this summer! Enjoy life outdoors on your new deck Auburn • Bangor • Bar Harbor • Belfast • Belgrade • Blue Hill • Boothbay Harbor Brunswick • Bucksport • Calais • Camden • Cherryfield • Damariscotta • Ellsworth Fairfield • Farmington • Greenville • Machias • Portland • Rockland • Skowhegan HammondLumber.com YOUR BUSINESS GROW START PROTECT WE DO BUSINESS LAW so that you can do business. C O U N S E L O R S A T L A W 2 0 7 - 9 4 7 - 4 5 0 1 • r u d m a n w i n c h e l l . c o m At a minimum, every cannabis operator should carry general liability, product liability and commercial property coverage. But expect higher premiums.

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