Insurance: What to Know for Your Cannabis Business in NJ

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The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMM Act) allows the New Jersey Cannabis Regulatory Commission to create rules to govern the availability of cannabis in the state of New Jersey. The conditional cannabis business license application regulations authorized by this law state that all applicants for a conditional and annual cannabis business license must provide the commission with a plan to obtain “liability insurance coverage.” appropriate for the proposed cannabis business ”. See NJAC 17: 30-17 (b) (12); NJAC 17: 30-7.3 (b) (6). With cannabis remaining an illegal and illegal activity at the federal level, forcing insurance companies to summarily dismiss claims, cannabis companies now find themselves in a difficult position to comply with both regulations.

In particular, the regulations do not attempt to conceal the fact that everything that is authorized in this law is still illegal at the federal level. As the regulations state in a subsection titled “Analysis of Federal Standards” on the second page of the document, “the Controlled Substances Act, 21 USC Sections 801 et seq., Prohibits the cultivation, distribution, and possession of marijuana , for whatever reason, regardless of state law. 21 USC Sections 841 et seq. … Therefore, the new rules will conflict with federal law. The paragraph further specifies that “members of the regulated community who engage in activities contemplated by the law could incur federal civil and criminal liability”.


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