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Recently, Colorado House Bill 16-1211 was signed into law requiring medical and recreational marijuana transporters to hold a state issued licensed. Using company vehicles, these businesses provide transportation of cannabis product from licensees and may offer the ability to store product at their business location or distribution point.
As a condition of their license, a transporter must have insurance. The law is silent as to the type of insurance, but in our opinion the purchase of commercial automobile insurance would be a minimum requirement with possibly commercial liability and property insurance particularly if the licensee maintains a storage or distribution facility.
A question that should be raised is how will the cannabis product be insured or covered during transportation or storage? This will be a difficult issue to address through insurance as carriers offering commercial automobile or business property have avoided insuring the property of others when being transported or off premises.
Absent insurance coverage, the recreational and medical marijuana licensees will need to rely on established marijuana transporters to effectively and safely move their product. The contracts between the parties will be critical in determining the responsibilities of each side should the cannabis be damaged or stolen during transport.
If the contract offered by the marijuana transporter releases them of liability should the product be lost, damaged, or stolen during transportation or storage, the cannabis licensee will need to contemplate their business relationship and practices with the marijuana transporter.
Furthermore, it would be prudent the contract is reviewed by an attorney to determine the obligations, damages, and potential remedies should the marijuana transporter negligently transport product or hold for safekeeping.
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