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Judge Orders Insurance Company to Cover Medical Cannabis

Judge Orders Insurance Company to Cover Medical Cannabis

Could this mark a change in the way that medical Cannabis is used and paid for?

Andrew Watson had been using medical cannabis to ease the neuropathic pain he continued to experience after a rehabilitating work-related accident at the Lumberyard he was contracted too. His unfortunate accident occurred in 2008, and in 2014, Mr. Watson had been using modest amounts of Marijuana as a method of prescribed pain relief. However, after this point, Watson could no longer afford to pay for the substance and had to stop his treatment. At rates of approximately $475 for an ounce of cannabis, the cost implications are huge – Who could realistically sustain this level of payment for an ongoing medical condition without some form of financial aid?

Watson was instead using a form of opiate that was found to have a lot of side effects. Part of his testimony, in fact, stated that “the effects of marijuana, in many ways, are not as debilitating as the effects of the Percocet”.

Cannabis was deemed to be a more effective and less harmful option.

Due to the circumstance this left Watson in, he had no option but to seek legal action to try and gain reimbursement for his prescription costs, and to gain insurance cover for future Cannabis prescriptions as part of the states controlled program. He could no longer continue to use opiates as a form of treatment.

He testified that the current opiates prescribed were ineffective and had a great many adverse effects. Furthermore, it was noted that Marijuana gave him the most effective form of treatment, and Watson’s use was extremely controlled, cautious and mature – It was out of necessity that he used Cannabis, and to deny this court ruling would have a detrimental effect on his quality of life and future prospects.

A decisive ruling that has far-reaching implications for the medical use of cannabis.

This week, the court case was finalized and a decisive decision was made in Mr. Watson’s favor. An unnamed insurance company would be responsible for the ongoing payment of his medical cannabis and he would also receive back payments for the amounts he had previously purchased on prescription.

This decision is believed to be the first of its kind and the gravity of its implications are huge. Firstly, this court case will bring to the forefront of the legal community the complex issues surrounding the use of medical cannabis – What is deemed an appropriate level of use? Why are opiates still prescribed when Marijuana has a better track record? Who should pay for prescriptions that are required in direct relation to a work accident or unavoidable medical condition?

Furthermore, this New Jersey court ruling has great ramifications for insurance companies and could potentially save them millions in medical costs. If Cannabis becomes prevalent as a method of prescribed pain relief, this could mean money is saved on expensive alternative medicines and pharmaceuticals as a result. Could Marijuana replace traditional forms of medicine when used in moderate amounts and in a controlled manner?

Finally, this decision could raise questions about the sanctioned state Marijuana program and the types of illness, disease, and ailments that it is used to treat. Currently, there is a very small list of disorders and conditions that are covered such as epilepsy, glaucoma and some forms of cancer. Is this list appropriate? Could Cannabis be used in other legitimate medical scenarios? Only time will tell, but Mr. Watson’s court case has surely given cause for concern.

Cannabis entrepreneur denied life insurance policy

Cannabis entrepreneur denied life insurance policy

Derek Peterson, Chairman and CEO of the publicly-traded company Terra Tech Corp, was denied a life insurance policy based on his affiliation with the cannabis industry.

A letter was sent to Peterson by Mutual of Omaha, notifying him that “we cannot accept premium[s] from individuals or entities who are associated with the marijuana industry.”

The letter from Mutual of Omaha to Derek Peterson, denying him life insurance coverage. The letter from Mutual of Omaha to Derek Peterson, denying him life insurance coverage.

The letter, dated June 13th, contains significant grammatical errors that affect the meaning of the response, such as, “WE ARE REGULATED BY THE AGENCIES OF THE,” which calls into question the reasoning behind their decisions, whether it be a fear of a specific government threat or simply an excuse.

“This was to get some additional coverage for me personally, my family,” said Peterson. “On a personal level, to have something like this happen, where I can’t get protection for my family … it just seems ridiculous and archaic at this point.”

On his application, Peterson stated that he uses marijuana, in accordance with Mutual of Omaha’s policies that require an applicant to disclose any and all relevant information regarding the health of the insured.

Peterson’s entrepreneurship within the cannabis industry includes retail businesses in Oakland, California and Nevada, as well as a significant medical cannabis growing operation in Oakland. Due to Terra Tech Corp’s status as a publicly traded company (TRTC), Peterson has experience working with the SEC and other government entities. Access to banking services has been notoriously difficult for employees of the cannabis industry, but obtaining life insurance policies has not been a known issue until now.

While 25 states have legalized medical cannabis and four have legalized recreational cannabis, federal prohibition has kept large financial institutions from interacting with cannabis businesses and individuals. While banks may be attempting to protect their reputation, the results of denying these services have been deadly.

Financial expert Julie Hill of the University of Alabama School of Law points out that “knowingly engag[ing] in a monetary transaction in criminally derived property of value greater than $10,000.”

“These and other laws make it very risky to accept any money that you know comes from a marijuana business, regardless of whether you are a bank,” she said. “This is one account that probably won’t make them much money, yet it could potentially be a really large headache,” she said. “It’s easier to say ‘No, thank you’ than to try to figure out if it would actually cause negative repercussions.”

While the Senate has been making strides in allowing cannabis business to access financial services, banks are self-regulated and are legally allowed to create their own policies, even if they are based on reputational concerns.

kristin kloc
Photo credit: Terra Tech Corp

Colorado Court Rules Marijuana Plants Insurable

Colorado Court Rules Marijuana Plants Insurable

In what may be a landmark case for the future of marijuana dispensaries across the nation, a Colorado judge ruled that damages to a Colorado Springs’ dispensaries finished product may result in an insurance claim for $40,000.

The case, which pits dispensary The Green Earth Wellness Center, LLC vs. the Atain Specialty Insurance Company stems from a wildfire near the Green Earth Wellness center that caused extensive damage to both the dispensaries’ growing and harvested crops.

Green Earth originally sought over $200,000 in damage to its mothers and clones (still in bloom) and another $40,000 in “damage to buds and flowers.” Green Earth’s claim is based on the following premise:

“Smoke and ash from a wildfire overwhelmed its ventilation system and intruded into its growing operation, causing damage to Green Earth’s marijuana plants.”

Smoke, ash, and heat can cause severe damage to plants in bloom, rendering them essentially worthless and un-usable. Hence, Green Earth lost a lot of money because of a circumstance they could not control.

When the insurance company Atain rejected the dispensary’s claim, Green Earth swiftly filed a lawsuit that stated both its growing and harvested buds qualified as “stock”. Since “stock” was covered on the insurance plan, they sought reimbursement for all of the damages.

The Colorado District Court threw out the $200,000 claim on the mothers and clones, refusing to qualify those plants as “stock”. Instead, the Court maintained that these plants were excluded by Green Earth’s policy and rejected the notion that crops need to grow outdoors in dirt to be considered crops.

However, the Court ruled that the agreement between the parties did in fact cover for harvested, dried plants ready for sale. Thus, the Court ordered that Green Earth’s breach of contract claim for the $40,000 in damage to its harvested marijuana buds and flowers must be tried.

Stay tuned and look out for an update as this trial comes to fruition. The result, which sounds as if it will favor Green Earth, could tip the legal scales on many more cases like this in the industry’s future.

Bernie Canter

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