Insurance issues may kill medical pot in county

OneBeacon Insurance won’t protect against marijunana liability issues

County commissioners on Tuesday will consider a ban on medical marijuana facilities in unincorporated La Plata County.

Insurance problems prompted the reversal after the county has spent months working to develop its regulations for medical marijuana operations.

“They essentially told us we don’t have liability coverage for our medical marijuana regulatory activities,” La Plata County Attorney Sheryl Rogers said of the county’s insurance carrier, OneBeacon Insurance.

She said the insurance company cited conflicts between state and federal law, which classifies marijuana as an illegal drug, in explaining its refusal to cover the county’s related regulatory activities.

Other counties could find themselves in the same position with their coverage because the policy wording allowing OneBeacon to decline coverage is common in insurance policies, Rogers said.

“We were the first county to ask the question,” she said.

Commissioners will consider the marijuana facilities ban at their meeting at 10 a.m. Tuesday.

“It’s a hard recommendation to make,” Rogers said, adding that county officials know some local business owners will experience deep financial losses and some people could lose their jobs.

If approved, the ban will immediately halt issuance of new land-use permits and licenses for commercial growers and producers in the county. And the permits already issued to businesses in the county, including a new permit issued this week, will expire June 30. At that time, the medical marijuana businesses in the unincorporated areas will be forced to close.

The shutdown will affect dispensaries in Durango that are getting their products from suppliers in the unincorporated areas of the county. They’ll be forced to seek products elsewhere.

Commissioner Wally White said, “I am very unhappy with the current situation and do not want to see anyone put out of business.”

He feels the county’s insurance coverage shouldn’t be in jeopardy since they’re following state law. Everyone knew there were risks, from county officials to the business owners, he said, “but to have the situation unfold with such a technicality is very unsettling for us all.

“I sincerely hope we can find a positive solution for this.”

If approved next week, the medical marijuana operations ban would not affect primary caregivers. It also would not affect the single Durango-based grower, whose operation was “grand-fathered” before the city banned growing facilities, said Ron LeBlanc, city manager.

Rogers said she feels local patients’ needs can be met despite the ban, albeit in a less convenient way.

LeBlanc said the city is not affected by the problems the county is facing. The insurance company Durango uses, CIRSA, includes a pool of more than 200 cities and towns in Colorado and the company has “anticipated” and addressed medical marijuana issues. They’re defending and covering related claims, said LeBlanc, who also sits on CIRCA’s board of directors. The insurance is available only to cities and towns, he said. Counties cannot join the pool.

City councilors are not likely to provide a haven within city limits for growers and producers who are affected by a county ban, LeBlanc said. Lifting the city’s ban would create an array of problems to address, from public safety to zoning, he said.

“I doubt the council would be persuaded to open that up just because the county has an insurance problem,” LeBlanc said.

hscofield@durangoherald.com

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