With an increasing number of states pursuing legalization to varying degrees, and New Jersey’s Governor-Elect expected to push for greater legalization in the Garden State financial institutions and other companies need to be aware of the private litigation risk and federal regulatory scrutiny in this area. For all employers, legalization presents challenges in creating and administering policies, particularly those related to disability issues, drug testing, and workplace injuries, and invites new theories for wrongfu termination claims. For financial institutions specifically, legalization creates unique challenges in Bank Secrecy Act/Anti-Money Laundering compliance, such as implementing a customer identification program (“CIP”), and filing suspicious activity reports (“SARS”). For any businesses involved in this new market, insurance coverage is a key consideration. When purchasing insurance, those businesses should carefully review applicable regulations and insurance policy language. Then, if and when a loss or claims occurs, those businesses should be ready to respond to certain coverage defenses their insurers may raise.

This presentation will address these challenges, explaining how legalized marijuana implicates the regulatory, employment, and insurance coverage arenas, and highlight techniques to protect against increased risk.