Types of Claims CBD Manufacturers Can Expect to Face

The cannabis industry, with all of its related products, exists in a strange state in the United States today.  Marijuana, the high-profile recreational drug, remains an illegal substance at the federal level.  However, it has been legalized in some states despite this ban.  Congress permitted the growing and sale of hemp, also a kind of cannabis plant, and companies are selling the derivative products at an astounding rate.  This is no different from CBD, which is growing in popularity nationwide. With this, CBD manufacturer claims are important to understand.

Examples of CBD Manufacturer Claims

Because of the close relationship CBD has to marijuana (and perhaps because of the closeness of time since it, too, was banned), insurance claims brought against CBD manufacturers have the potential to be devastating and leave very little room for error.

Claims Related to False Advertising

Unscrupulous business owners wanting to capitalize on the sudden popularity and still mysterious nature of CBD to most people go far beyond their rights in marketing their products.  CBD oil and other derivatives have been heralded as cures for Alzheimer’s, cancer, the coronavirus and more.  Obviously, CBD is subject to the same restrictions as any other medication or substance.  A false advertising insurance claim could bring down a business.  Even if the claim is unwarranted, there is a history in the industry of this sort of chicanery, so a savvy agent should prepare their clients.

Claims Related to State Law

The laws related to CBD manufacturers and cannabis, in general, vary from state to state.  What is legal in one state may not be legal in another – especially if the product in question has a higher content of THC than permitted by federal regulations (0.3%).  While a state like Colorado or California will permit more psychoactive products, others will not, and such products are illegal at the federal level.  So, there could be suits filed due to selling or producing products in an area that does not permit them.  Traveling across state lines with illegal substances (although legal in another state) is also a serious crime.  It is best to be careful, but also to be prepared to handle any unforeseen legal situations.

Claims Related to Medical Malpractice

CBD oil and similar products are, in many cases, sold as medical products, and therefore are subject to very strict regulations.  Claims related to negative reactions due to ingestible or topical CBD products are to be expected in this industry.  Because CBD is such a novel phenomenon, the testing of various products is not as proven and robust as others, so there is an open door for litigious clients.

That 0.3% limit on THC content once again is very important.  Many people will only try CBD because they are assured that there is no chance of psychoactive response.  If someone does experience such a reaction, there could be dire consequences, and the proper insurance must be in place to cover it.

About CannGen

For more information about our comprehensive insurance solutions for the cannabis, CBD, and hemp industries, please visit our website at www.canngenins.com or email marketing@canngenins.com.