A U.S. District Court Judge in Colorado ruled this month that legal marijuana is insurable under commercial property policies, according to Lexology.com.
The ruling came in a case in which the plaintiff, The Green Earth Wellness Center, which operates a medical cannabis dispensary and growing facility in Colorado Springs, sought claims under a commercial property and general liability insurance policy issued by the Atain Specialty Insurance Company.
The claim was filed after smoke and ash from a 2012 wildfire seeped through the growing site’s ventilation system and damaged plants as well as dried flower that was being prepared for sale.
Green Earth sought more than $200,000 for the plants and about $40,000 for the flower. Atain rejected the claim, arguing that the damaged property was federally illegal contraband, and also that the policy did not cover crops.
In her Feb. 17 decision, Judge Marcia Krieger ruled that the plants were not covered under a so-called “growing-crops exclusion,” but that because marijuana is legal in Colorado, the contraband exclusion was too ambiguous to be applied to the ruined flower. Therefore, Krieger said the claim for $40,000 must be tried in court, but instructed the parties to try and settle the issue in a May 10 “case management conference.”