Fed Fears Force Hawaii Insurer to Drop Clients at Last Second

According to an Associated Press story reported in Marijuana Business Daily, "Hawaii’s largest workers’ compensation insurer is canceling insurance policies for seven medical marijuana dispensaries preparing to open this summer."

The Hawaii Employers’ Mutual Insurance Co. (HEMIC) decided it was concerned over criminal liability since cannabis is illegal at the federal level. "...Its board of directors unanimously agreed to the decision after two independent legal opinions determined HEMIC would have “potential exposure for criminal liability” based on federal law."

So HEMC notified the seven dispensaries this week that their policies will be canceled in 30 days and premiums refunded, the Honolulu Star-Advertiser reported.

Which makes the timing of the move is at best unfortunate. As the Star-Advertiser article continues to explain: "Hawaii law requires companies to provide workers’ compensation insurance that covers medical expenses and loss income for employees who are injured on the job" and therefore, the HEMIC move essentially puts the dispensaries out of business just days or weeks before their scheduled opening.

Cannabis has been illegal at the federal level since the 1970's, and arguably since the 1930's. Recent federal maneuvering including The Cole Memo and the Rohrbacher-Farr Amendment have clouded the issue of whether a state can make its own laws ("states rights") without federal interference. Few companies want to get into the crosshairs of that battle.

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