Roll with it? Hawaii insurer pulls workers’ comp coverage from medical marijuana dispensaries

Plants grow at the home of Jeremy Nickle, in his backyard in Honolulu, Hawaii. Nickel, who owns Hawaiian Holy Smokes and is applying for a dispensary, grows a variety of strains and has a medical marijuana card. (AP Photo/Marina Riker) As reported by Howard Dashefsky on KHON2 on June 28, the business of selling medical marijuana in Hawaii just became more complicated. Insurance company Hawaii Employers’ Mutual Insurance Company (HEMIC) announced it will stop providing workers’ compensation insurance to seven of the eight businesses waiting for licenses to begin selling their product in dispensaries. This makes it even more difficult to start operating a medical marijuana dispensary because state law requires all companies to provide workers compensation for employees. The news came without warning, the report says. Thirty-day policy cancellation notices were sent after what HEMIC called a thorough legal evaluation of state and federal law regarding the production and sale of medical marijuana in Hawaii. Related: 5 developments impacting medical marijuana in workers’ compensation “HEMIC has received two outside legal opinions regarding its role in providing workers’ compensation coverage to Hawaii’s medical marijuana dispensaries. These legal opinions clearly acknowledge that HEMIC and its board of directors have potential exposure for criminal liability based on federal law applicable to marijuana businesses. After receiving these legal opinions, the HEMIC board has voted unanimously to discontinue these policies and fully refund all premium payments to any dispensaries currently insured by us,” HEMIC CEO Marty Welch said in a statement. “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. This is strictly a legal decision and in no way expresses any moral judgment on the use of marijuana nor in any way refutes the potential medicinal value of marijuana in the treatment of chronic pain or other medical conditions.” Statewide impact The state Department of Health says it is still looking into how this could affect the program. “The next 30 days may be challenging if the affected dispensaries cannot obtain workers compensation coverage from an alternate insurance company,” the department said in a statement. “The Department of Health will continue to work with all licensed dispensaries to determine if and how this change affects dispensaries’ businesses and what steps the dispensaries will take toward ensuring access to safe medical marijuana products for registered patients throughout the state.” HEMIC’s actions underscore the issues businesses across the U.S. are facing as states legalize marijuana for a variety of purposes while it remains a federal offense to possess or sell marijuana. Related: Insurance implications of legal marijuana: Questions continue to roll in This story was first reported on KHON2, Honolulu, Hawaii, by Howard Dashefsky. More information is available on KHON2’s website.


About John Fagan

John is a Jacksonville native who grew up on the First Coast. He graduated from Bishop Kenny High School in 1975 and went to college at Florida State University where he completed a 4-year program in 3 years. John graduated from the Florida State University College of Business in 1978 and went straight into Florida State University College of Law. While in law school, John earned a position on the prestigious Law Review Board serving as its Business Editor. As a law student, John studied in the Oxford program. He also interned with the Florida Legislature working in the Florida House of Representatives Criminal Justice Committee. John was admitted to the Florida Bar in 1981. John began his legal career as a law school intern in the State Attorney's Office in Jacksonville in 1981. After his internship, legendary State Attorney Ed Austin hired John as a full-time Assistant State Attorney for the Fourth Judicial Circuit (Clay, Duval, and Nassau Counties). As a prosecutor, John tried jury and non-jury trial on charges ranging from DUI to Murder. In 1983, John moved from the State Attorney's Office to begin his career in private practice. He has practiced law for 30 years on the First Coast. For the last 20 years, John and his family have made Clay County their home. John limits his practice to personal injury and disability cases. While there are many fine attorneys in Clay County, John is one of only a few Clay County attorneys who limit their practice to personal injury and disability cases. John takes pride in helping clients resolve injury claims in ways that avoid the stress, uncertainty, and the expense of unnecessary litigation. Professional Activities John is the past President of the Clay County Bar Association and has served on the Board of the Clay County Bar Association from 2009-2013. He is an active member of the Florida Bar, and the Federal Bar of the Middle and Southern Districts of Florida. He is also a member of the American Association of Justice, the Florida Association of Justice, the National Organization of Social Security Claimants' Representatives, and the National Organization of Veterans' Advocates. Service to the Community John is involved in the Clay County Community serving as a member and Director of the Rotary Club of Orange Park, of the Clay County Bar Association, and the Putnam County Bar Association.
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