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Workers’ comp insurer drops Hawaii marijuana dispensary clients


Hawaii’s largest workers’ compensation insurer has dropped seven medical marijuana dispensary clients over concerns about criminal liability.

Hawaii Employers’ Mutual Insurance Co. (HEMIC) canceled policies for the seven dispensaries, which were scheduled to open soon, because marijuana is considered illegal by the federal government, according to a report by the Honolulu Star-Advertiser.

HEMIC notified the businesses last week that their policies would be cancelled at the end of July after two independent legal opinions found that the insurer could have “potential exposure to criminal liability.”

The names of the affected dispensaries were not released by HEMIC. An eighth dispensary is not covered by HEMIC.

“Due to state and federal vagaries surrounding this new business at the time these applications were initially submitted to us, workers’ compensation policies were issued to these businesses in the normal course of insurance operations,” HEMIC CEO Marty Welch said in a release. “While we regret that this decision necessitates new workers’ compensation coverage options for the dispensaries, it was imperative that the HEMIC board take swift action in accordance with its fiduciary responsibilities.”

Hawaii legalized medical cannabis in 2000, according to the Star-Advertiser. However, there was no legal way to obtain it until 2015, when a new law allowed the state to issue eight licenses, each of which allowed for the opening of two production facilities and two dispensaries.

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