CLM 2017 Annual Conference March 29-31, 2017 Nashville, TN How High? Insurance and Medical Marijuana in 2017 I. Introduction II. What is Marijuana? Cannabis is a Schedule I drug under both Florida law (Fla. Stat. 893.03(1)(c)7.) and Federal law (the Controlled Substances Act). Cannabis means al parts of any plant of the genus Cannabis, whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant or its seeds or resin. Fla. Stat. 893.02(3) Statistics on Use Marijuana is the most commonly used illicit drug in the United States. Over 104 million Americans over the age of 12 have tried marijuana at least once, and almost 17 million have used marijuana in the last month. The use of marijuana usually peaks in the late teens early twenties, and then declines in later years. In 2008, marijuana was reported in over 374,000 emergency department visits in the U.S., with about 13% involving people between the ages of 12 and 17. What is Medical Marijuana Medical Marijuana refers to the use of cannabis or marijuana, including constituents of cannabis, THC and other cannabinoids, as a physician recommended form of medicine or herbal therapy. It s use is intended for individuals with debilitating medical conditions as determined by a licensed physician. Allows caregivers to assist patients medical use of marijuana. The Department of Health shall register and regulate centers that produce and distribute medical marijuana for medical purposes and shall issue identification cards to patients and caregivers. Medicinal Use History of medical necessity as an affirmative defense. Elvy Musikka was a Florida woman with glaucoma who was arrested in 1988 for cultivating 6 cannabis plants. Musikka s physician was an ophthalmic researcher at Miami s famous Bascom-Palmer Eye Institute, and he testified that if 1
marijuana were legal I would have prescribed it for Elvy Musikka s medical use in the treatment of glaucoma. Musikka s physician also testified that she would go blind without marijuana. The court allowed her to introduce a common law medical necessity defense. Judge Mark E. Pollin wrote in his decision that, This is an intolerable, untenable legal situation. Unless legislators and regulators heed these urgent human needs and rapidly move to correct the anomaly arising from the absolute prohibition of marijuana which forces law abiding citizens into the streets and criminality to meet their legitimate medical needs, cases of this type will become increasingly common in coming years. There is a pressing need for a more compassionate, humane law which clearly discriminates between the criminal conduct of those who socially abuse chemicals and the legitimate medical needs of seriously ill patients whose welfare and very lives may depend on the prudent therapeutic use of those very same chemical substances. Later in 1988, Mussika would go on to become a federal marijuana patient as part of the FDA s Compassionate Investigational New Drug program. Side Effects Use of marijuana can cause dry mouth, nausea, vomiting, dry or red eyes, heart and blood pressure problems, lung problems, impaired mental functioning, headache, dizziness, numbness, panic reactions, hallucinations, flashbacks, depression, and sexual problems. Marijuana might cause rapid heartbeat, short-term high blood pressure. It might also increase the risk of having a heart attack. III. Legislation 2016 Title: Use of Marijuana for Debilitating Medical Conditions Debilitating Medical Condition means cancer, epilepsy glaucoma, positive status for [HIV/AIDS], post-traumatic stress disorder (PTSD), [ALS], Crohn s disease, Parkinson s disease, multiple sclerosis, or other debilitating medical conditions of the same kind or class as or comparable to those enumerated, and for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient. Medical use means the acquisition, possession, use, delivery, transfer, or administration of an amount of marijuana not in conflict with Department rules, or of related supplies by a qualifying patient or caregiver for use by the caregiver s designated qualifying patient for the treatment of a debilitating medical condition. Marijuana has the meaning given cannabis in Section 893.02(3), Florida Statutes (2014), and, in addition, Low-THC cannabis as defined in Section 381.986(1)(b), Florida Statutes (2014), shall also be included in the meaning of the term marijuana. A physician shall not be subject to criminal or civil liability or sanctions under Florida law solely for issuing a physician certification with reasonable care to a person diagnosed with a debilitating medical condition in compliance with this section. 2014 Title: Use of Marijuana for Certain Medical Conditions Debilitating Medical Condition means cancer, glaucoma, positive status for [HIV/AIDS], hepatitis C, [ALS], Crohn s disease, Parkinson s disease, multiple sclerosis or other conditions for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient. Medical use means the acquisition, possession, use, delivery, transfer, or administration of marijuana or related supplies by a qualifying patient or personal caregiver for use by a qualifying patient for the treatment of a debilitating medical condition. Marijuana has the meaning given cannabis in Section 893.02(3), Florida Statutes (2013). A physician licensed in Florida shall not be subject to criminal or civil liability or sanctions under Florida law for issuing a physician certification to a person diagnosed with a debilitating medical condition in a manner consistent with this section. 2
IV. (1st/3rd) BI/UM/PIP In Florida, a person is guilt of a DUI if he or she is driving under the influence of any controlled substance to the extent that the person s normal facilities are impaired. Fla. Stat. 316.293(1)(a). Such normal facilities include, but are not limited to, the ability to see, hear, walk, talk, judge distances, drive an automobile, make judgements, act in emergencies, and in general, normally perform the many mental and physical activities of daily life. Fla. Stat. 316.194(1). Any person operating a motor vehicle within Florida is deemed to have given his or her consent to submit to a urine and/or blood test for the purpose of detecting the presence of chemical and controlled substance. If a death or serious bodily injury results, a chemical test is required and an officer may use reasonable force if necessary to obtain a blood sample if the driver refuses. V. Property Damage/Burglary-Theft-Premises Residential HO3 Right to Access Fair Housing/Rental - Vandalism Will homeowners insurance cover medical marijuana under contents coverage if the marijuana is lost in a peril? Will insurance cover recreational (non-medical approved) marijuana under contents coverage if it is lost in a peril? Will insurance cover a claim if an accidental fire in the home is caused from using marijuana (medically or recreationally)? You don t think of the changing of status of marijuana in many states as having a real estate impact but it does. In the states where medical marijuana is decriminalized (and in Washington and Colorado, where it s decriminalized even for non-medical use), landlords and their rental agents have a disclosure issue on their hands. The landlord has to decide whether r not the rental property accommodates marijuana use, and if so, the rental agent has to be sure to adequately disclose the policy to prospective tenants. That s just one of the issues stemming from the changing legality of this controlled substance. Commercial - The insurance policy is a contract between the marijuana business and the insurance carrier issued on standard policy forms with contractual content typical for most industries. In other words, the insurance industry did not dramatically alter their policies just because a business is classified as medical or recreational marijuana. Depending on the insurance policy and carrier, the most significant difference between the CGL insurance policy issued to a medical and marijuana industry is the likelihood products and completed operations may have been excluded on the policy. This means no overage exists for liability associated with the selling, manufacturing and distribution of cannabis into the marketplace. Fortunately, this type of coverage can be secured through a separate policy. Separate coverage or Addendum comprehensive protection that could be associated with bodily injury, property damage, personal and advertising injury, and fire damage legal liability unless it has been specifically excluded in the policy. These policies are either occurrence or claims made basis with the former recognized as being more liberal toward its application of when a claim is to be recognized. Pertinent exclusions include contractual liability, workers compensation, damage to your product, and infringement of copyright or trademarks. 3
While no business is immune from risk, claims, or litigation, the highly competent marijuana companies seem to have les marijuana insurance claims or legal ramifications than most. The higher the competency level the more likely claims will be accidental or fortuitous in nature. The lower the competent operators tend to experience incidents that could have been avoided if they had used their 6 th sense. VI. Inland Marine Cargo - Transport There is likely exposure for product in-transit similar to that of scheduled narcotics. Further, at the current time, the market is not yet stable on public product costs nor experts to determine the quality of the product and value. Further mitigation duties, salvage cost, destruction procedures are not yet solidified. VII. General Liability Although there is testing for blood alcohol level, the level of use for marijuana is not readily testable by local law enforcement. Determination if someone is impaired comparative negligence remains a dispute, along with whether the testimony methods will meet the expert standards between states. VIII. Ethics for Lawyers on advice related to Marijuana Illinois Ethics Op 14-07(2014): Lawyers may advise and provide legal services to medical marijuana business clients and municipal clients even though federal law makes the sale illegal. Arizona Ethics Opinion 11-01: A lawyer may ethically counsel or assist a client in legal matters expressly permissible under the Arizona Medical Marijuana Act ( Act ), despite the fact that such conduct potentially may violate applicable federal law. Lawyers may do so only if: (1) at the time the advice or assistance is provided, no court decisions have held that the provisions of the Act relating to the client s proposed course of conduct are preempted, void or otherwise invalid; (2) the lawyer reasonably concludes that the client s activities or proposed activities comply fully with state law requirements; and (3) the lawyer advises the client regarding possible federal law implications of the proposed conduct if the lawyer is qualified to do so, or recommends that the client seek other legal counsel regarding those issues and appropriately limits the scope of the representation. Connecticut Informal Opinion 2013-02: Lawyers can advise clients regarding the requirements of state law and the rules and regulations of state agencies that regulate medical marijuana. The opinion states: At a minimum, a lawyer advising a client on Public Act 12-55 must inform the client of the conflict between the state and federal statues, and that the conflict exists regardless of whether federal authorities in Connecticut are or are not actively enforcing the federal statues. It is our opinion that lawyers may advise clients of the requirements of the Connecticut Palliative Use of Marijuana Act. Lawyers may not assist clients in conduct that is in violation of federal criminal law. Lawyers should carefully asses where the line is between those functions and not cross it. Colorado Ethics Opinion 124 (2012): This opinion concludes that a lawyer s medical use of marijuana in compliance with Colorado law does not, in and of itself, violate Colo. RPC 8.4(b).1 Rather, to 4
violate Colo. RPB 8.34(b), there must be additional evidence that the lawyer s conduct adversely implicated the lawyer s honesty, trustworthiness, or fitness as a lawyer in other respects. Colorado Judicial Ethics Opinion 2014-01 (2014): Judge may not personally use marijuana for either medical or recreational use because it remains a federal crime, though legal under state law. The Florida Bar Board of Governors (May 23, 2014) adopted the following policy regarding lawyer activity relating to medical marijuana: The Florida Bar will not prosecute a Florida Bar member solely for advising a client regarding the validity, scope, and meaning of Florida statutes regarding medical marijuana or for assisting a client in conduct that the lawyer reasonably believe is permitted by Florida statues, regulations, orders, and other state or local provisions implementing them, as long as the lawyer also advises the client regarding related federal law and policy. The Florida Bar Board of Governors will continue to monitor this issue as it develops. IX. Closing Recommendations Marijuana remains a Schedule 1 drug per the Controlled substances Act (CSA). As a Schedule I substance prohibits the assigning of a National Drug Code (NDC) or a procedure code to medical marijuana for billing purposes. Marijuana is not FDA-approved to treat any medical conditions or diseases. Workers compensation is not required to cover the cost of medical marijuana according to provisions in the legislation of several states, including Colorado, Michigan, Montana, Oregon and Vermont and is not approved in the Official Disability Guidelines (ODG), American College of Occupational and Environmental Medicine (ACOEM), or any of the state medical treatment guidelines and would be denied in utilization review, if recommended by a treating physician. 5