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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

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. 

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

News

John J. Hare Featured in Pennsylvania & Delaware Super Lawyers Magazine

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

News

Christina Gonzales To Speak at the Women of Color Roundtable at DRI’s Diversity and Inclusion Seminar

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.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Thought Leadership

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

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.

Event

29th Annual FDLA Florida Liability Claims Conference

Jim and Erica will team up to present, "Supporting the Next Generation: Connecting with Associates." This panel-style presentation will explore communication best practices from the perspective of a senior shareholder and newer associate. The discussion will focus on the communication styles of different generations and effective strategies to avoid communication breakdowns. Topics to be discussed include the hiring process, perceptions of defense work among newer lawyers, work-life balance issues after hiring, and mentoring.

graphic with Maria Granaudo photo text announces she has joined the firm as a shareholder in the Health Care Dept.

News

Maria R. Granaudo Joins Marshall Dennehey’s Wilmington Office As a Shareholder in the Health Care Department