Insurance defense law firms might want to explore marijuana panel counsel opportunities as the cannabis industry expands. Almost 50 million Americans used marijuana at least once in 2019, according to the CDC. Although it is illegal at the federal level, 37 states allow medical marijuana use and many have also have approved recreational use. The U.S. cannabis industry had $24 billion in sales in 2021, and is expected to grow to $70 billion by 2026.
Marijuana Panel Counsel Claims
Here are some types of insurance claims that might apply to marijuana panel counsel litigation matters:
- Employment practices liability (EPL). Workplace protections vary by state, and some cities have their own rules.
- Motor vehicle negligence for users driving under the influence.
- Premises liability for retail sales locations.
- Product liability.
- Trucking and commercial auto as product is transported.
- Workers’ compensation claims.
Retail locations open up a large number of potential claims situations. This includes everything from slip and fall claims to fire losses to security problems and even underage liability claims. Product liability can also be an issue because cannabis companies manufacture their own drug products. There may also be novel insurance claims that haven’t even hit the news yet.
All of this is underscored by the fact that the marijuana industry is growing quickly, leading to potentially more claims and litigation. Some law firms may choose to specialize in the area, both on the defense and plaintiff side.
Click on the link for an online summary of marijuana laws by state.
Five Largest Public Marijuana Businesses in the U.S.
Below is information on several of the largest publicly-held marijuana businesses in the U.S. by stock market capitalization. All of the companies are valued above $1 billion, and present a new and rapidly growing potential market for legal fees for the insurance defense bar.
- Green Thumb Industries
- Trulieve Cannabis
- Verano Holdings
- Cresco Labs
Most of the largest marijuana businesses in the U.S. are vertically integrated, including all of the companies listed above. This means that each corporation handles everything from growing marijuana to manufacturing and packaging the product to selling their “own” product to the end-user in retail stores. This is the opposite path that traditional drug manufacturers chose decades ago. But it means these marijuana businesses may be subject to more and/or different insurance issues than the branded and generic drug manufacturers.
Not surprisingly, there are also a very large number of private companies that are in the business or getting into it. They tend not to be as large as the public companies and, interestingly enough, they have largely decided to specialize on certain areas of the business rather than being vertically integrated. That doesn’t mean they don’t have insurance issues because they most certainly do. It just means they probably have fewer issues than the “big” guys do on average. However, these businesses probably represent a meaningful portion of the owner’s net worth as opposed to the public company investors. This means they may be more likely to insure for higher amounts and will negotiate differently in litigation. Unfortunately, information on the private marijuana companies can be difficult, if not impossible, to obtain.
So let’s look at the two largest publicly held marijuana companies in the U.S. by market capitalization. By studying these two in more detail one can get a better feel for how the business is now and how it may be in the future.
As this post is written, the largest marijuana business in the U.S., by market capitalization, is Curaleaf at $4.3 billion. Their sales have increased 20% over the last 12 months and company management expects that to continue.
Curaleaf’s headquarters is in Wakefield, Massachusetts. It currently has 134 local dispensaries (generally retail store-front locations) spread across 22 different states. They also have 26 different marijuana cultivation sites. Normally, one might think it a better business decision to have growing operations centralized and large. However, with marijuana laws the way they are now, many states require the product to actually be grown in-state.
The second largest marijuana business is Green Thumb Industries. They are headquartered in Chicago, as are three of the largest five marijuana businesses in the U.S. Green Thumb has 77 local dispensaries based in 15 different states. They also have 17 growing sites spread among various states.
Some of the interesting legal aspects to the business are that several states require the marijuana to be grown in-state and it also must be grown inside (in greenhouses or hydroponically in buildings). That actually is a much less efficient way to grow marijuana. Growing the plants inside is more expensive and the yield tends to be lower than marijuana grown “naturally” outside. However, it does make it easier to monitor and to police for the states.
Another quirk is that you must be 21 to purchase the products except in very special circumstances. Very strange in that most of the marijuana products come in simple powder form to be mixed in beverages, as gummy bears or ready for use in baking.
Insurance defense law firms may want to consider marijuana panel counsel opportunities in the future. It is growing very quickly and is very dynamic. We can help you if this is a direction you choose to pursue.
Insurance Defense Marketing Consultant for Law Firms
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Contact Margaret Grisdela, an insurance defense marketing consultant, at 561-266-1030 or via email. Connect with Margaret Grisdela on LinkedIn.
This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.