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.