Cannabis Farmer Gets over $1 Million Insurance Payout

By Kelsey Brugger @Santa Barbara Independent

One Carpinteria farmer won an insurance payout well in excess of $1 million after ashes from the Thomas Fire destroyed thousands of his plants. What was unusual was that the plants were marijuana.

As cannabis cultivators come out of the shadows, pot businesses are starting to operate like any other business — they have lawyers, accountants, bankers, and, more recently, insurance brokers.

Most of the Northern California cannabis farms scorched by last fall’s wildfires did not have insurance. They were forced to suffer huge losses. But now insurance brokers in Santa Barbara County are starting to tap into the once-illicit industry.

“A lot of this wasn’t insurable,” said Matt Porter, a vice president at Brown & Brown Insurance, one of the largest firms in the world, with offices in Goleta. But in the last several months Porter and his colleagues have won over area cannabis operators. They now have about 20 clients in Carpinteria and Lompoc, he said. They are expected to get up to $8 million in insurance claim payments for their Carpinteria clients.

While the recreational cannabis industry is legal in California, marijuana is a Schedule 1 drug under federal law. And an air of secrecy still exists. The market is still pulling itself up from underground. Porter joked he cannot cold-call cannabis farmers and say: “I want to sell you insurance. Tell me more about your marijuana operation.”

Just months before the Thomas Fire broke out, Porter had written the crop insurance policy for the Carpinteria cannabis grower. The policy included precise language —“change in atmospheric conditions” — that triggered the $1 million payout. The insurance carrier is based in London, England.

During the fire, the tiny white ash particles that suffocated the Santa Barbara area crept into the greenhouses, which have retractable roofs, Porter explained. When they sent a random sample of the plants to a lab for testing they came back with high levels of asbestos, lead, arsenic, and magnesium.

In the end, the farmers were able to get about market price for the damaged product. Market value of cannabis ranges from $1,000-$1,600 per pound and higher.

Crop insurance in general is a hard sell. It can be pricy, and farmers are known to run their business as cheaply as possible. In the 50 times he has presented crop insurance, only about 10 percent of growers decided to buy it, Porter said.

Now that cannabis businesses are legitimate under state law, they require insurance for workers compensation, buildings, and liability. “It’s not the Wild West,” he said.

For the crop insurance, the Carpinteria farmers paid $30,000 in premiums with a $25,000 deductible.

Because the payout was so huge the carrier has decided to no longer cover cannabis farmers. Porter said he is in talks with other carriers in Europe to fill the gap.

 

Posted in News, Noteworthy Cases

Sessions says US prosecutors won’t take on small-time marijuana cases

By Sadie Gurman
Associated Press

March 10, 2018

WASHINGTON — Federal prosecutors won’t take on small-time marijuana cases, despite the Justice Department’s decision to lift an Obama-era policy that discouraged US authorities from cracking down on the trade in states where the drug is legal, Attorney General Jeff Sessions said Saturday.

Federal law enforcement lacks the resources to take on ‘‘routine cases’’ and will continue to focus on drug gangs and larger conspiracies, Sessions said.

The comments come after the Trump administration in January threw the burgeoning marijuana legalization movement into uncertainty by reversing the largely hands-off approach that prevailed during the Obama administration, saying federal prosecutors should instead handle marijuana cases however they see fit.

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Posted in News

Jeff Sessions’ marijuana move will backfire

(CNN)Jeff Sessions announced Thursday that he is rescinding the Cole memo, which reflected the Department of Justice’s relatively passive policy under the Obama administration since August 2013 on enforcement of federal cannabis laws.

If Sessions intended to quell the enthusiasm of California’s cannabis business enthusiasts and government officials, he once again fell short.
Michael Chernis

Michael Chernis
Unlike announcements from the DOJ in past years threatening to ramp up federal enforcement of the cannabis laws, this announcement was met with little more than a yawn by cannabis businesses.
The harshest reaction came from local and state government officials — in California and in other states — who insisted that they were disappointed, concerned, and surprised by Sessions’ move.
Now, unlike in prior years, government officials in California and elsewhere are totally aligned with cannabis businesses in resisting the federal government’s threats.
Posted in Articles, Commentary, News

CLG Provides Public Comments to City of Los Angeles on Proposed Requirements

CLG Letter to City Council

Posted in Commentary, News, Rebuttal

The Big Fix

Please enjoy this article by Michael Chernis for MG Magazine.

 

Sept 2017 The Big Fix MG Magazine

Posted in Articles

L.A. Cannabis Industry Demands Full Business Licensing from City Council

The nation’s largest weed sector is ready to leave the grey market after years of fearing legal prosecution.

Friday 08/18/2017 by Madison Margolin // Merry Jane

On the steps of L.A. City Hall on Tuesday, dozens of cannabis industry activists gathered to fight for local licensing. At face value, the question at hand is simple, so simple some wonder why it’s even a question: in November, California citizens passed Proposition 64 to legalize marijuana — and an overwhelming majority of Angelenos voted for it. Then in March, 80 percent of L.A. voters passed Measure M, authorizing the city to establish a licensing, taxation, and regulatory structure for cannabis businesses. After that, cannabis industry representatives and concerned citizens gave input over months in public hearings as to how the city should regulate legal pot, repeatedly advocating for comprehensive permitting. Yet despite all those efforts, the latest draft regulations to come from the city council proposed to grant “limited immunity” to pot businesses, instead of issuing actual licenses.

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Posted in Articles, News