The flag of Hawaii flying above the bay in Honolulu, Hawaii.

Loren Javier

Insurance Provider Drops Hawaii Medical Cannabis Companies

The launch of Hawaii’s medical cannabis program faces more delays after the Hawaii Employers’ Mutual Insurance Company (HEMIC) announced last week it will stop providing workers compensation insurance to seven of the state’s eight licensed cannabis companies.

According to a KHON2 report, the development came without warning and poses a problem for the companies in question because state law requires cannabis companies to provide workers comp insurance to their employees.

The companies were given 30-day cancellation notices by their provider.

“HEMIC has received two outside legal opinions regarding its role in providing workers’ compensation coverage to Hawaii’s medical marijuana dispensaries. These legal opinions clearly acknowledge that HEMIC and its board of directors have potential exposure for criminal liability,” Marty Welch, HEMIC’s CEO, said in a statement.

“After receiving these legal opinions, the HEMIC board has voted unanimously to discontinue these policies and fully refund all premium payments to any dispensaries currently insured by us,” Welch said.

Hawaii’s Department of Health is investigating what this may mean for the immediate future of the program. In a statement issued by the department, officials admitted, “the next 30 days may be challenging if the affected dispensaries cannot obtain workers compensation coverage from an alternate insurance company.”

Hawaii’s medical cannabis dispensaries have faced a series of delays since the licensees were first announced last year.

Storefronts have yet to open — despite several of the state’s operators having already grown and harvested their first crop — because state officials have not yet issued testing lab licenses, and state law requires that all cannabis sold to patients must first undergo product safety tests.

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