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Cannabis Law

Our attorneys offer a full suite of legal services to assist our clients in navigating the complex and evolving landscape of the cannabis industry. Specifically, our firm’s understanding of the unique challenges of the industry allows us to defend lawsuits brought against cannabis industry defendants as well as evaluate coverage and defend lawsuits on behalf of industry insurers, agents and MGAs.

Insurance Coverage

We are familiar with the underwriting goals of industry insurers and MGAs, the policies drafted to reflect those goals and the unique risks inherent in the developing industry. We are experienced in analyzing coverage under cannabis policies as well as defending both breach of contract and bad faith lawsuits filed by insureds under cannabis policies.

We analyze coverage and defend claims under Commercial Property, including associated business interruption and cannabis CGL policies as well as cannabis related Management Liability/Professional Liability, Cyber and other claims made policies. The coverages analyzed include:

  • Property & Inland Marine: Fire, theft, water damage, and transport losses
  • Crop/Equipment: Claims involving mechanical failures or crop value loss
  • Cannabis Stock & Crime: Theft, employee dishonesty, and inventory loss
  • Duty to defend/coverage analysis under CGL or professional liability/claims made policies

Casualty

We deliver targeted, insurance-focused representation across a wide range of casualty claims, relevant to cannabis operations. We defend insureds for every general liability exposure, including:

  • CGL: Dispensary slip-and-falls, solvent explosions, and the myriad of accidental injuries associated with agricultural and commercial premises risks
  • Product Liability: Contamination, mislabeling, or accidental ingestion
  • Auto Liability: Accidents involving cannabis product delivery or transport
  • "Gram-Shop": Liability for providing cannabis to intoxicated patrons
  • Retail Accessory Risks: Injuries from broken glassware or accessories
  • Landlord Liability: Issues arising from leasing to cannabis businesses
  • Delivery Services: Claims tied to third-party logistics or on-demand delivery models

Management Liability/Employment

The cannabis industry is particularly susceptible to management liability and employment-related lawsuits due to its evolving legal and operational landscape. Common areas of litigation within these areas of law include:

  • Claims against company leaders: Stemming from their managerial choices
  • Wage and hour disputes: Misclassification of employees (exempt vs. non-exempt), failure to pay overtime, inaccurate timekeeping, and denial of breaks are common issues leading to lawsuits.
  • Discrimination and harassment: Employees bringing claims under Title VII and other anti-discrimination laws, alleging harassment and discrimination based on sex, race, and other protected characteristics.
  • Wrongful termination: Employees may claim wrongful termination based on various factors, including protesting discriminatory practices or exercising their rights related to cannabis use where protected by state law.
  • Retaliation: Employees who report workplace violations or engage in protected activities are also filing retaliation claims.

Professional Liability

Defending professional liability claims in the cannabis industry involves a combination of a history and experience defending a myriad of professional liability claims irrespective of the industry as well as an understanding of the unique risks for professionals servicing the cannabis industry. Our professional liability attorneys bring decades of experience defending professionals across many industries and are able to bring that experience to assist cannabis professionals including:

  • growers and cultivators
  • testing labs
  • consultants
  • accountants
  • architects
  • directors and officers
  • lawyers
  • MGAs/ independent adjusters
  • agents
  • software providers

Cyber / Data Breach

Cannabis operators must comply with rigorous cybersecurity standards to safeguard sensitive data and uphold both state and federal regulatory and privacy mandates. Because the cannabis supply chain relies heavily on digital tracking systems, cannabis-related businesses must deploy specialized software tools that secure inventory management and ensure accurate, compliant reporting, such as track and trace software that creates additional cyber vulnerabilities. Our Cyber team is available to quickly mobilize to mitigate the damage due to ransomware attacks and data-breaches.

Workers’ Compensation

Defending workers’ compensation claims in the cannabis industry requires navigating an evolving legal landscape. Our team focuses exclusively on representing insurers and employers in workplace injury and occupational hazard claims, while also offering proactive risk management strategies to help reduce exposure.

Cannabis Industry-Specific Risks and Exposures

  • Cultivation: Pesticide exposure, ergonomic strain; machinery accidents; electrical hazards
  • Manufacturing: Chemical exposure from extraction processes; industrial accidents involving heavy machinery
  • Retail and Distribution: Slip-and-falls; repetitive motion injuries; ergonomic strain; driver injuries

As the cannabis industry grows and regulations shift, our focused approach helps clients confidently manage workers’ compensation claims and minimize liability in this high-risk sector.

Health Care

While many states have legalized medical use of cannabis, it remains illegal under federal law. This dichotomy creates significant legal challenges for health care providers. We leverage our experience in helping clients navigate health care regulations such as HIPAA laws and patient privacy protections and apply it to the uniquely complex environment surrounding the cannabis industry. We defend clients against civil claims, including medical malpractice, and can assist health care providers – including physicians, dispensaries and clinics – to understand the evolving standards of care for cannabis as a therapeutic option, which can differ significantly from conventional treatments. This can include appropriate patient evaluations, dosage recommendations and documentation requirements within the framework of state medical cannabis programs. We are also well-equipped to address challenges related to informed consent.

Our Cannabis Law Practice serves clients from our 19 offices located throughout Pennsylvania, New Jersey, New York, Delaware, Florida, Ohio and Connecticut, and in neighboring jurisdictions in Maryland, West Virginia and Kentucky.

Results

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Defense Verdict on Behalf of Hospital and Emergency Department Doctors

We obtained a defense verdict on behalf of one of the Philadelphia region’s largest hospitals and two of its Emergency Department physicians after a six-day jury trial in a complex and extremely emotional case involving the death of 7-year-old child. Allegations of negligence surrounded the failure to admit and perform a urine drug screen on an 18-year-old who presented high on synthetic marijuana or K2. We argued that the doctors appropriately performed numerous exams, tested and monitored the patient until he achieved clinical sobriety. The patient was discharged, then 22 hours later smoked more K2 and within two hours strangled his 7-year-old sister to death. 

Thought Leadership

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New Jersey Law Journal

Marijuana Legalization and Workplace Risk: What New Jersey Employers Need to Know

May 21, 2026

While the legalization of recreational marijuana usage poses a risk of increased work-related accidents for younger workers, employers can work to curb this increase by investing in education, effective drug policies, and employee assistance programs.

Legal Update for Cannabis Law

Marijuana Reclassified: Preliminary Impacts on Homeowners Coverage Issues

April 27, 2026

On April 23, 2026, the United States Department of Justice and Drug Enforcement Administration announced an order reclassifying certain marijuana products from Schedule I to Schedule III under the Federal Controlled Substances Act. This move represents the most significant shift in federal cannabis policy in decades. While much of the public discussion thus far has focused on the tax and criminal implications of the change, there are more nuanced questions for insurers – particularly in the context of homeowners policies and the enforceability of exclusions for “controlled dangerous substances.” The Regulatory Shift For decades, marijuana was classified as a Schedule I drug under the Controlled Substances Act. That classification, on a tier reserved for substances with no accepted medical use and a high potential for abuse, aligned marijuana with substances like heroin, LSD and peyote. The April 2026 order altered that framework by recognizing that FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license will be reclassified in Schedule III of the Controlled Substances Act. This move indicates at least some level of federal recognition that state-licensed marijuana has accepted medical uses and a lower potential for abuse.  Importantly, the change is limited. The reclassification does not federally legalize marijuana, and recreational cannabis generally remains a Schedule I substance. This bifurcated treatment of medical versus recreational marijuana use will likely become central to future discussions, including insurance coverage litigation. Implications for Homeowners Policies Most standard homeowners policies contain exclusions for losses “arising out of” the use, sale, manufacture, delivery, transfer or possession of controlled substances, as defined by the Federal act. Notably, the standard “controlled substances” exclusion in policies specifically references cocaine, LSD, marijuana and narcotic drugs. The rescheduling of marijuana to Schedule III raises the key question of how or whether the “controlled substances” exclusion will continue to apply. At this point, the answer to this question appears to be that the provision will continue to preclude coverage for losses arising out of marijuana claims, since Schedule III substances remain “controlled substances” under federal law and marijuana remains listed, by name, in the exclusion. To be clear, the reclassification does not remove marijuana from the statutory framework; it merely places marijuana in a less restrictive category of the Controlled Substances Act. Moving forward, insurers will likely argue that the plain language of the exclusion means that the provision continues to apply. For their part, policyholders may begin to push back on that interpretation, particularly in jurisdictions like Pennsylvania and New Jersey, where legalized cannabis regimes are well-established. The argument will be that conduct authorized by state law, and now partially recognized at the federal level, should not trigger exclusions designed to address criminal or inherently hazardous activity. Ultimately, any coverage disputes will likely turn on traditional principles of policy interpretation: plain meaning, ambiguity, and the reasonable expectations of the insured. Courts in Pennsylvania and New Jersey, both of which have robust bodies of insurance coverage law, will play an important role in shaping how these disputes are resolved. Conclusion The move of FDA-approved drug products containing marijuana and medicinal marijuana products subject to a qualifying state-issued license to Schedule III is an important step in federal drug policy, but its immediate impact on homeowners insurance is limited. Simply put, marijuana remains a controlled substance, such that standard exclusions to homeowners policies should continue to apply. Moving forward, the most significant effects of the change in classification will emerge in close cases, particularly in states like New Jersey where recreational and medical marijuana is legal (at least to some degree) under state law. For now, the change creates more questions than answers. Those questions, which are likely to be centered on policy language, legality, and causation, are likely to shape the next wave of coverage litigation in this area.

Firm Highlights

Portrait of Carolyn Schweizer, with text below: Philadelphia Office Managing Attorney

News

Marshall Dennehey Names Carolyn Schweizer New Philadelphia Office Managing Attorney

Thought Leadership

Vendor Cyber Attack Compromises PII of More Than 3 Million Hunting and Fishing License Holders in Texas

The Texas Parks & Wildlife Department (TPWD) announced earlier this month that one of its vendors which handles the sale of state hunting and fishing licenses was the victim of a cybersecurity attack. The threat actor appears to have exfiltrated personal driver’s license information, passport numbers, email addresses, phone numbers and addresses of over 3 million hunting and fishing license holders.  The State Parks Department advised that the attack did not compromise social security numbers, dates of birth or financial information. Texas Cyber Command, the state’s new cybersecurity authority formed to protect critical infrastructure and coordinate threat responses across state and local government, reportedly assisted in detecting and containing the attack. TPWD has already set up free credit monitoring for those impacted through Kroll.  According to press reports, no specific group has yet been identified as the perpetrator of the theft. TPWD also advised that business has not been interrupted and license sales were continuing. This incident once again demonstrates that cybersecurity is only as strong as the weakest link in the supply chain. Businesses must prioritize security across their own environments and those of their vendors and contractors as well.

Event

Florida Insurance Fraud Education Committee (FIFEC)

Sean and Alex will present, "Life Care Plans: From Low Impact to Policy Limits," focusing on the history and expanding use of life care plans in litigation and their ability to transform low impact injury claims to disproportionate high value claims. By focusing on the limitations of life care planners, Florida's tort-reform on medical damages, and the Daubert standard, extraordinary life care plans with inflated future medical care recommendations can be defended.

Thought Leadership

Featured Conversations... Key Takeaways from A.M. Best’s Webinar on the Misuse Defense in Product Liability Claims, Featuring Michael Salvati

Michael Salvati, shareholder in our Philadelphia office, was a panelist for the April A.M. Best webinar, “The Misuse Defense: Strategic Approaches to Defending Product Liability Claims for Insurers.” During the program, Michael and his fellow panelists offered practical, jurisdiction‑specific guidance on how misuse and failure‑to‑warn theories intersect in modern product liability litigation. Michael emphasized the unique challenges these claims present—particularly in states like Pennsylvania, where evidentiary rules diverge sharply from those applied in many other jurisdictions. Failure to Warn as the “Flip Side” of Misuse Salvati explained that failure‑to‑warn allegations often arise as a direct counter to a misuse defense. As he noted, “If our misuse defense is that the plaintiff didn't use a product properly or safely, then the failure to warn claim is that we didn't tell them how to use it properly.” He emphasized that these claims can stem from either the absence of warnings or criticisms of existing warnings, such as insufficient specificity or lack of clarity about risks. Pennsylvania’s Unique Evidentiary Landscape One of Salvati’s most notable points was the stark difference in how Pennsylvania treats evidence of compliance with industry standards. He highlighted that Pennsylvania is “one of the only states…where that evidence is not admissible” in strict liability cases. Manufacturers cannot rely on compliance with ANSI, UL, ISO, or even federal safety standards to defend the product against a strict liability claim—because the focus is solely on the product itself, not the manufacturer’s conduct. Salvati acknowledged the challenge this creates for defense counsel and clients who expect such compliance to carry weight. Understanding the Three Defect Theories Salvati also walked through the three primary defect theories recognized in many jurisdictions: - Design defect – a flaw in the product’s intended design - Manufacturing defect – a deviation affecting a specific unit - Failure to warn – inadequate instructions or warnings He noted that warnings claims are increasingly significant and sometimes stand alone when design or manufacturing theories are weak. As he put it, plaintiffs often default to warnings claims because “the default position seems to be, ‘If I got hurt, there must be something wrong.’” Warranties and State‑by‑State Variations Salvati addressed how breach‑of‑warranty claims fit into the broader framework, explaining that implied warranties—such as merchantability—often overlap with strict liability in Pennsylvania. He emphasized the importance of understanding local nuances, as warranty law and admissibility rules vary widely across states. Looking Ahead: The Growing Importance of Warnings In his closing remarks, Salvati stressed that warnings should never be treated as an afterthought in product liability defense. He observed that warnings‑only claims are becoming more common and urged manufacturers and insurers to continually evaluate the clarity and completeness of their instructions and warnings. His takeaway: “We should always be talking about what are the instructions that come with our products…to bolster a misuse defense.” Listen to the complete webinar here: https://www3.ambest.com/conferences/events/eventregister.aspx?event_id=WEB1074.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Congratulations to our 2026 Florida Super Lawyers & Rising Stars: Elizabeth Ferguson, A.C. Nash, Taylor Naughton, Sophia Philor, Amara Rodriguez

News

Marshall Dennehey Announces 2026 Florida Super Lawyers & Florida Rising Stars

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Casey Alan Coyle Joins Marshall Dennehey's PA Appellate Practice as a Shareholder in Harrisburg and Philadelphia

News

Marshall Dennehey Expands Leading Pennsylvania Appellate Practice With Addition of Shareholder Casey Coyle

Thought Leadership

Legal Update for Special Education Law: Recent Positive Outcomes From the Group

Hearing Officer Confirms District Acted Appropriately Under IDEA and Section 504 William J. McPartland (Scranton) obtained a finding in favor of our client, a school district, on all issues following a due process hearing. The parent had filed a due process complaint alleging that the school district had breached its child find duty under the IDEA and Section 504, that the school district had discriminated against the student on the basis of disability in violation of Section 504, and that the school district had denied a free and appropriate public education to the student both by developing inadequate IEPs and via an actionable procedural violation.  Specifically, the student had received a Section 504 evaluation in October 2023, after a number of behavioral infractions culminating in a fight in September 2023, was identified as having anxiety and a sleep disorder, and received appropriate Section 504 accommodations. The student had never previously demonstrated signs of a learning disability, and the parent denied the school district permission to evaluate the student for special education needs in November 2023, and January 2024. The parent granted the district permission to evaluate the student in October 2024, after a private psychologist diagnosed the student with Attention Deficit Hyperactivity Disorder, possible Oppositional Defiance Disorder, a learning disorder, and anxiety. The school district issued a special education evaluation report in December 2024, finding that the student had an emotional disturbance and other health impairment, and an IEP providing an itinerant level of emotional support, as well as instruction in academics and social skills, was issued in January 2025, and amended in February, March, and April 2025. The student withdrew from the school district in April 2025, to attend a cyber charter school. The hearing officer determined that the school district had not violated its child find duty to the student in violation of either the IDEA or Section 504 where the district developed a Section 504 plan for the student within a month and a half of the parent’s first request for a Section 504 evaluation and where the parent repeatedly denied consent to conduct an IDEA evaluation of the student. The hearing officer noted that the student’s sporadic record of behavioral infractions prior to September 2023, did not suggest that the student had a disability prior to the parent’s initial request for an evaluation. The hearing officer further determined that no evidence had been produced to suggest that the student was discriminated against on the basis of disability in violation of Section 504. Additionally, the hearing officer determined that the IEP offered to the student was substantively adequate and that, to the extent the social and emotional programming offered by the school district was not received by the student, this resulted from the parent’s refusal to accept the same. The hearing officer finally determined that the school district did not commit an actionable procedural violation by delaying development of an IEP for the student where the parent repeatedly denied consent to evaluate the student. Court Dismisses Three of Four Claims Against School District Christopher J. Conrad and Daniel P. McGannon (Harrisburg) achieved a significant early victory on behalf of a school district client in. The team successfully obtained dismissal of three of the four claims asserted in the plaintiff’s amended complaint. The former district superintendent brought multiple claims arising out of his alleged “forced resignation,” including age discrimination under the ADEA, a Section 1983 Equal Protection claim, a Pennsylvania Whistleblower claim, and breach of contract. On behalf of the district, the defense team moved to dismiss the complaint in part, arguing: The plaintiff failed to plead sufficient facts to support a prima facie case of age discrimination. The equal protection claim was barred because the ADEA provides the exclusive federal remedy for age-based employment claims. The breach of contract claim could not stand because the underlying employment agreement had expired prior to the alleged breach. The court agreed, dismissing the ADEA, equal protection, and breach of contract claims in their entirety. As a result, only a single claim under the Pennsylvania Whistleblower Law remains pending. This outcome substantially narrows the scope of the litigation and positions the client for a more efficient defense moving forward.