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Benjamin D. Tievsky, counsel at Pillsbury Winthrop Shaw Pittman. (Photo: Courtesy photo.) Benjamin D. Tievsky, counsel at Pillsbury Winthrop Shaw Pittman. (Courtesy photo)

During the widespread unrest in the wake of the killing of George Floyd, looters appear to have specifically targeted cannabis dispensaries for theft and vandalism. It has been reported that 43 businesses in California and Oregon were essentially destroyed, as well as dispensaries in Boston and Chicago that had only recently opened. The Bay Area was particularly hard-hit, with industry sources reporting that nearly every pot retailer in Oakland was targeted, along with most dispensaries in San Francisco and Berkeley. Many of these businesses were already suffering from the economic impact of the COVID-19 pandemic—and may not have qualified for federal aid due to the federal illegality of marijuana—and they may now be teetering on the edge of financial ruin as a result of the recent wave of property damage, theft of inventory and cash, and further business interruption.

Fortunately, insurance coverage is potentially available to defray costs associated with these losses. Despite the historic difficulties faced by legal cannabis businesses in obtaining insurance—due to, among other factors, the reticence of insurers to underwrite the risk, and the industry’s lack of access to credit and other financial institutions—the situation has improved in recent years due to increased legalization of marijuana at the state level and the approval of cannabis-specific insurance products by regulators such as the California Department of Insurance. Thus, whether through California’s CannaBOP insurance program or otherwise, affected dispensaries may have coverage in place to respond to looting-related loss. While coverage will, of course, depend on the facts of the loss and specific language of an insured’s policy, generally speaking, the standard commercial property policy does not appear to contain exclusions or other limitations that present an absolute bar to coverage for these losses.

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