Workers’ compensation insurance is important in all industries, but traditionally workers in the cannabis and hemp industries have struggled with poor coverage. With the medical marijuana industry growing rapidly, businesses need to recognize the importance of workers’ compensation insurance and ensure that all their workers are covered.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance provides coverage for workers who are injured at work. It covers medical bills associated with the injury, as well as replacing wages and funding long-term rehabilitation. For workers who would face financial disaster if they were injured and no longer able to work, workers’ comp is vitally important.
Independent Contractors in the Cannabis and Hemp Industries
It is common in the cannabis and hemp industries to label workers as independent contractors. This designation has many benefits for employees, such as shielding them from tax withholding and unemployment taxes. However, it also means that workers do not receive compensation if they are injured at work.
The Legal Grey Zone
On a federal level, cannabis is still a Schedule I drug, even though some states have legalized it for medical or recreational purposes. This conflict between state and federal laws leaves marijuana businesses in a legal grey zone. Some insurance providers have refused cover to medical marijuana dispensaries due to concerns over criminal liability.
The Future of Workers’ Compensation Insurance in the Cannabis and Hemp Industries
As cannabis and hemp companies gain a firm legal footing and become more mainstream, they need to think about how they will provide workers’ compensation insurance to protect their employees. For now, this will probably mean going to a specialist insurance provider.