Doug Banfelder, Author at Arizona Medical Marijuana Law

About Doug Banfelder

Commercial Insurance Specialist, Mediator, Motorcyclist.

Legislative Attacks on Arizona’s Medical Marijuana Act

Its often been said that “Arizona is never more in danger than while the Legislature is in session.” And as if to prove the old adage true, our august representatives are scheming to scuttle the Will of the People once more as regards medical marijuana. Given that this is Medical Marijuana (activism) Week, now seems an appropriate time to review what we’re up against:

A chilling effect on recommending doctors? HB 2035, sponsored by Legislative District (“LD”) 10 Representative Kimberly Yee (R), aims to do just that by threatening to charge physicians with “unprofessional conduct” if they recommend MMJ for anything other than an “accepted medical purpose.” Accepted under whose definition? It doesn’t say.

Rep Matt Heinz, LD 29 (D), a practicing family doctor, characterizes Yee’s bill as a “solution in search of a problem.” Not surprisingly, its support runs along party lines, so it looks likely to go to the Governor for signing.

Another bill would prohibit community college or university students, faculty and staff from using or even carrying their medicine on campus. HB 2349 by Representative Amanda Reeve (R) of LD 6 maintains that patients exercising their rights under the Arizona Medical Marijuana Act puts these institutions at risk of losing their federal funding. Nevermind that no such threat has been made, much less carried out, against educational institutions in any other medical marijuana state.

Saving the worst for last, the boldest attack upon both the spirit and letter of Prop 203 is HB 2350; it was also run by Rep. Reeve. Note the past tense; the langauge of this particular outrage has since been replaced by another, totally unrelated bill – a funny bit of legislative business known as a “strike all amendment,” aka “striker.” Strikers are a regular part of the process (although if more Arizonans knew about the practice they might well force and end to it).

HB 2350 sought to prohibit the “transfer of anything of value” in exchange for cannabis, thereby eliminating the “reasonable reimbursement” clause relied upon by caregivers – which would certainly cause problems for dispensaries as well. Fortunately, this bill is no longer active, but understand that nothing is ever really and truly dead at the Lege…

Both Reeve bills almost certainly foul the Voter Protection Act of 1998, designed to provide a sturdy firewall against legislative mischief. The VPA requires that a 2/3 majority (of both the House and Senate) support the measure, which, given the lopsided nature of our legislature, is not a high hurdle. The other salient criterion, however, does protect that which the People have said they wanted: any bill amending a voter-approved initiative must further the purposes of the measure – a test House Bills 2349 and 2350 clearly fail.

So the campus prohibition bill, although likely to clear the legislative process and land on Brewer’s desk, is contrary to Arizona Constitution Article IV, Part 1, Sec. 1 – but it’ll take legal action to place the $64,000 question before a judge. I hope someone with sufficiently deep pockets comes forward to press the case.

Advocacy: Americans For Safe Access (ASA) has some suggestions for this week’s advocacy activities. I suggest placing an emphasis on the Arizona Legislature as well, for as former Speaker of the House Tip O’Neill counseled, “all politics is local.”

Doug Banfelder is a commercial insurance agent specializing in the medical marijuana industry. Reach him at [email protected]; www.PremierDispensaryInsurance.com or 480-315-9051

By Doug Banfelder|2015-04-06T18:53:11-07:00February 12th, 2012|AZ Legislation, Stories & Articles|Comments Off

Prop 203 – Know Your Opponents

Keep AZ Drug-Free recently announced its intent to place a Prop 203 repeal measure on the ballot next November. Following the ancient wisdom of “know(ing) thy enemy”, advocates should learn who belongs to this group in order to effectively fight the effort to reinstate prohibition. Do these members have a vested interest in making nearly fifteen thousand peaceful Arizonans into criminals, or are they merely well-meaning individuals under the influence of seventy years of anti-cannabis propaganda?

For our purposes, two other good questions are: who among them simply doesn’t (yet) understand the many palliative benefits of marijuana? And, is it possible that at least some of them might favorably respond to a more-informed perspective? Based on my experience with various elected officials and other opinion leaders, the answer is “yes”. So, if you know any of these folks, see if you can meet with them to break through the myths and misinformation that have fostered their bias.

Helpfully, the Keep AZ Drug Free website (www.keepazdrugfree.com) provides the names of the organization’s members. Below are the “Steering” and “Advisory” committee members, along with “Law Enforcement” and “Political Leaders”. Visit the website to see lists of “Community Leaders” and “Concerned Citizens”.

Leaders Against 203

Steering Committee:

Carolyn Short, retired lawyer — KeepAZDrugFree Chairman
Steven A. Betts, former CEO of SunCor Development
Michael J. Bidwill, President of the Arizona Cardinals
Paul K. Charlton, former U.S. Attorney, now a partner with Gallagher & Kennedy
Jerry Colangelo, Chairman of USA Basketball
Ed Gogek, M.D., clinical psychiatrist and addiction recovery specialist
Doug Hebert, ex-DEA agent, now with The Partnership for a Drug-Free America
Michael K. Kennedy, Chairman of the Super Bowl Host Committee
David P. Kimball III, partner with Gallagher & Kennedy
Debbie Moak, founder of notMYkid, a nonprofit organization
Len Munsil, lawyer and former gubernatorial candidate
Steve Twist, corporate general counsel, former Chief Asst. Attorney General of AZ
Darrell D. Wadas, M.D., Director of Medicine at Banner Good Samaritan Hospital

Advisory Committee:

Claren Scott, former news anchor
Jessica Smith, director of SADD/Arizona
Leland Fairbanks, M.D., family practitioner and smoke-free workplace advocate
Alex Romero, board member of Drug Watch International
Susan Engle, high school guidance counselor
Dr. Mark Rohde, clinical psychologist and substance abuse specialist
Peg Kimball, community activist
Sean McMaster, political consultant
Eric Wnuck, former Congressional candidate

Law Enforcement

Joe Arpaio, Maricopa County Sheriff
Arizona Association of Chiefs of Police
Rick Romley, Maricopa County Attorney
Sheila Polk, Yavapai County Attorney
Barbara LaWall, Pima County Attorney
Brad Carlyon, Navajo County Attorney
Alberto Gutier, Governor’s Office of Highway Safety
Roger Vanderpool, Former Director of the Arizona Department of Public Safety

Political Leaders:

Governor Jan Brewer
Attorney General Terry Goddard
US Senator John McCain (AZ)
US Senator Jon Kyl (AZ)
US Congressman John Shadegg (AZ-3)
Superintendent of Public Instruction, Tom Horne (Candidate for Attorney General)
State Senator Steve Pierce (LD-1)
State Senator Sylvia Allen (LD-5)
State Representative and House Majority Whip Andy Tobin (LD-1)
State Senator Jack Harper (LD-4)
State Senator Russell Pearce (LD-18)
State Representative Cecil Ash (LD-18)
State Representative Thayer Verschoor (LD-18)
State Senator Amanda Aguirre (LD-24)
David Schweikert, Candidate for Congress (AZ-5)
Ben Quayle, Candidate for Congress (AZ-3)
Candidate for Maricopa County Attorney Bill Montgomery
Pinal County Supervisor, Bryan Martyn
Jo Kelleher, Democratic Party Vice Chairwoman & Former LD-1 Senate Candidate
Rick Gray, LD-9 House Candidate
Bob Donahue, LD-1 Senate Candidate
Lindsay Bell, LD-1 House Candidate
Karen Fann, LD-1 House Candidate and former Chino Valley Mayor
Eric Sheats, Former LD-4 House Candidate
Prescott Winslow, LD-5 Candidate for State House
Michael Coskun, Former LD-7 House Candidate
Dr. Ray Mahoubi, Former LD-8 House Candidate
Ben Arredondo, State House Candidate in LD-17
Jim Waring, Former State Senator
Deb Gullett, Former State Representative
Clark Silver, Candidate for Agua Fria School Board
Jon Jensen, Former Candidate for Congressional District One
Jay Schlum, Mayor of Fountain Hills

By Doug Banfelder|2015-04-06T18:52:32-07:00November 6th, 2011|Miscellaneous|Comments Off

The Radical Minority

[The following was the basis for Doug Banfelder’s comments at last week’s Prop 203 Solidarity meeting.]

Medical Marijuana – Supported by the Majority, Under Attack by a Radical Minority

Who here feels like a Radical Tonight?! Its easy to feel that way while we’re under attack – but consider this – We are Actually the MAJORITY!

Tonight as we meet we face an organized, energized opposition. U.S. Attorneys have been unleashed by the DOJ, dispensaries raided, letters threatening legal action against property owners, and IRS harassment of dispensaries is escalating, despite the good faith efforts of most canna businesses to comply with often ambiguous state laws, or, as with the IRS, rules that are blatantly discriminatory and unjust. That’s radical!

At the state and local level, anyone engaged in the production or distribution end of medical marijuana is feeling the heat. Governor Brewer and Attorney General Horne’s federal suit for a declaratory judgement is certain to be dismissed, but the intended result, confusion, has been achieved. That’s radical!

We’ve all heard reports that local police seemingly don’t know which parts of the AMMA remain in place, putting patients at risk. Caregivers must either grow in their homes or in commercial buildings, making them subject to the not altogether unfounded fears of building owners concerned that their property may be seized. County Attorneys seek every opportunity to keep the prohibition machine in place, stubbornly continuing the failed “tough on crime” approach. That’s radical!

Why is all this going on? The only logical answer can be this: our opponents know that we are winning the public debate, and that our success WILL bring about the end of marijuana prohibition. Consider: 25% of the American people live in states that have approved Medical Marijuana laws; we have an unprecedented level of support in the United States Congress, with three bills recently introduced; and, a Gallup poll just revealed that a majority of Americans, for the first time ever, support the full legalization of cannabis. And, as a MAJORITY of Arizonans voted to approve Prop 203 last November proves, WE are NOT the radical ones!

No, we are the MAJORITY. This means the best way to fight back is from WITHIN the system. It’s how Prop 203 got passed, right? So then how do we get from here to where we want to be? Several things have to happen, and starting RIGHT NOW is not too soon.

Lets begin by agreeing that our opponents are a RADICAL MINORITY, and that we are part of a MAJORITY that approved Prop 203.

Second, we all must be registered to vote and know who our State Representatives are. Every legislative district has two members of the House and one Senator.

Third, all of us, especially those patients who are able, need to contact their legislators and say “I’m a medical marijuana patient/caregiver/businessperson, and I request (not “ask”) that you support continued patient access to the medicine that works best for me/my patients.”

It does not matter that legislators cannot undo Prop 203 (due to the Voter Protection Act); we need to understand that so far, their opinions have been formed by conversations with people like Drug Free AZ leaders Carolyn Short and addiction psychiatrist Edward Gogek – a minority of prohibitionist RADICALS who want to make AZ patients into criminals!

Always keep in mind that lobbyists and business interests drive the dialogue at the legislature. And that the legislature CAN kill 203 with “death by a thousand cuts.” Remember Rep. Steve Farley’s bill from last session to tax MMJ 300%? We must eliminate that kind of threat by letting our House and Senate members know how we feel NOW, BEFORE they run bad bills that put us on the defense. They respond to pressure, so it is up to ALL of us, THE MAJORITY, here in this room tonight!

We know the awesome powers of cannabis; we know that History is on OUR side; and we know that by committing to pulling together, we will win this public policy debate over the RADICAL MINORITY who oppose WE the MAJORITY.

So let’s act like the MAJORITY we ARE by getting all Prop 203 supporters registered to vote, contacting our Representatives, and working together to overcome the Governor and AG’s attacks – we CAN have America’s BEST MMJ program, guarantee patient access to medicine, create business opportunity for growers, property owners and dispensary operators and earn the respect we deserve as a MAJORITY of everyday Arizonans supporting medical marijuana.

By Doug Banfelder|2011-11-01T07:09:30-07:00October 30th, 2011|Stories & Articles|Comments Off

Protecting Prop 203 – With Success Comes Danger

Nearly a year after being approved by voters, the Arizona Medical Marijuana Act has proven popular with patients, yet much of the Act remains on rocky legal ground.

Six active lawsuits confirm early predictions that such a significant social policy change would engender substantial court action. What wasn’t known was how patients, caregivers and the business community serving these individuals would respond when the State once again attempted to scuttle the will of the voters.

In January of this year Attorney General Tom Horne offered anti-Prop 203 leader Carolyn Short a gift: he could disembowel significant portions of the Act by pitting Arizona’s new law against the Department of Justice, the Drug Enforcement Administration, and last but not least, the Controlled Substance Act of 1970, Nixon’s reaction to the social unrest being fomented by the era’s youth – and still the underpinning of Federal law. Once Governor Jan Brewer finally browbeat Arizona Department of Health Services Director Will Humble into being the State’s Plaintiff, Horne petitioned the federal court for a “Declaratory Judgement” stating that the Act did or did not conflict with federal statutue – which of course it does, as it has in every state with a medical marijuana law.

Horne had to know his abuse of the judicial system wouldn’t yield a favorable ruling, but he also knew this: the suit would create confusion and doubt about the Act, weakening public support for a ballot initiative that won by only the slimmest of margins. This would buy opponents time to create a “sky is falling” narrative, dutifully reported by an obedient press: that “medical” marijuana is a sham, a cover for what in actuality is a recreational users program; that dispensaries would attract crime and blight to neighborhoods; that cartels would move in under the guise of being legal dispensaries; and, that medicating patients would cause trouble in the workplace, etc, etc ad nauseum.

This storyline failed during the 2010 election cycle, but could now have the effect sought by opponents. Why? Because due to the Act’s passage and the government’s failure to fully stop its implementation, there are patients legally using marijuana for medicinal purposes, patients and caregivers cultivating crops, and compassion clubs and collectives opening up across the State to provide patients with access to the medicine they voted for – all activities in which just a few wrong steps, misjudgements, foolish or criminal acts might be enough to turn the tide of public opinion towards the opponent’s desired goal – repeal of the Act.

Unsurprisingly, some regretable incidents have occurred. The press, rarely missing an opportunity to cast MMJ in a bad light, reports each incident with just enough objectivity to mask its underlying Reefer Madness bias, confirming the worst fears of opponents while stirring doubt among casual supporters of Prop 203 last November.

So,we have a hostile government (with the Legisature reconvening in January), media outlets continually sensationalizing the subject, and well-connected private citizens whose overriding life goal is re-criminalizing personal behaviors we’ve just determined should be legal.

What is IN our favor is significant, if utilized with direction and purpose. Raw assets include 13,000+ patients and caregivers, whose numbers grow daily; responsible business owners whose fledgling enterprises are starting to bear fruit; a nationwide network of supporting advocates who have been down this same rough road; and, the knowledge that a majority of Arizonans from across the political spectrum support the right of patients to have this medicine if they so choose.

Next: An actionable plan for advocates.

[Note] Although many know me as an insurance agent providing coverage for compassion clubs and grows, in a former life I worked ten years for an elected official. My political experience also includes advising local and state candidates and non-profit lobbying. From these experiences I learned that even underdogs can win – but only if they are in the game.

Doug Banfelder is a commercial insurance specialist. Reach him at 480-315-9051, [email protected], or at www.PremierDispensaryInsurance.com

By Doug Banfelder|2011-10-05T06:49:24-07:00October 2nd, 2011|AZ Marijuana Law Lawsuits, Stories & Articles|1 Comment

Protecting Prop 203 – What Will It Take?

Recently I wrote that if you are in the MMJ field, you are also, by default, in politics, for nothing is more political than medical marijuana. Whether you a true believer in cannabis or entered the industry just to make a buck, you have a vested interest in helping to protect the Arizona Medical Marijuana Act against the attacks that are sure to come in 2012.

In a multi-part series over the next few weeks I will describe the challenges facing Arizona’s MMJ movement, offer a list of achievable goals, and suggest proactive steps community members can take, either individually or in groups, in order to reach those goals. Our success depends upon our efforts.

Doug Banfelder is a commercial insurance specialist with Premier Southwest Insurance Group, ranked a Top-Twentyfive Brokerage by Phoenix Business Journal in 2009, 2010, and 2011.
www.PremierDispensaryInsurance.com

By Doug Banfelder|2012-01-14T16:51:51-07:00September 18th, 2011|Miscellaneous|Comments Off

In the MMJ Biz? Congratulations, you’re in Politics, too!

Medical Marijuana is a remarkable mashup of public policy, hardball politics and popular culture. These characteristics make it rewarding, challenging, sometimes scary and oftentimes frustrating – and it will be so for the foreseeable future.

Those close to the issue, either as patients or businesspeople, know very well how political it all is. We have seen that what the ballot box giveth, elected officials gone rogue can quickly take away. Clearly, anti-Prop 203 leaders Carolyn Short, Edward Gogek, et al won’t rest until the Arizona Medical Marijuana Act is undone, with many observers expecting a repeal effort aimed at the November 2012 ballot.

And yet… the clinics are open, patients and caregivers are getting cards, and many of the businesses that sprang up (or adapted) to serve the envisioned dispensaries hang on, determined to outlast prohibitionists’ efforts to create doubt among the public via governmental meddling and slanted media coverage.

So what should be our response? The answer is simple, but not easy. What’s needed is a proactive grassroots strategy: registering voters, lobbying State and local elected officials, targeted, well-crafted public relations campaigns, and more, all with the goal of moving public acceptance well beyond original Prop 203 levels. It can be done.

By Doug Banfelder|2012-01-14T16:53:02-07:00September 5th, 2011|Miscellaneous|Comments Off

The Truth About Medical Marijuana

The Arizona Republic has apparently decided not to print this rebuttal to “addiction psychiatrist” and marijuana prohibitionist Ed Gogek’s “My Turn” editorial that appeared in the paper on 8/4/11.

In an effort to sow the seeds of public confusion, marijuana prohibitionist Edward Gogek employs tired rhetoric about “drug abusers” and “recreational use” (My Turn, August 4) while conveniently ignoring the truth about medical marijuana and the patients who benefit from it.

First, he complains that most medical marijuana (“MMJ”) patients cite pain as their reason for seeking a state card. Yes, pain is the predominant ailment cited, but what does this prove? Many experience the “aches and pains” of advancing age – and almost 40% of MMJ patients are over fifty.

Might it be that people suffering from daily pain simply prefer a natural herbal remedy to those manufactured in a lab? If one can choose between a drug with pleasant side affects verses those with adverse consequences, which is the more logical choice?

Mr. Gogek also makes much of the fact that most MMJ patients are men, while women generally claim pain more often to their doctors. To strengthen his thesis he adds the assertion that substance abuse is primarily a male disorder, and concludes that since more men than woman are currently Arizona MMJ patients, they must be using marijuana for purely recreational reasons.

Consider, however, the political and legal status of Arizona’s Medical Marijuana Act: confusion reigns, thanks in part to the Governor and Attorney General’s federal lawsuit (to which federal lawyers have recently responded by filing a motion to dismiss for lack of legal merit) and generally negative local media coverage.

Is it really any surprise that qualifying women patients have not come forward in their true number, when seeking a patient card more resembles an act of defiance than the exercise of a perfectly legal right?

Prohibitionists such as Mr. Gogek want Arizona to go back to criminalizing these citizens and restricting their pain relief choices to expensive, addictive, synthetic medications. This is the conditioned response of someone under the influence of seventy years of anti-marijuana propaganda.

The failed, expensive and hypocritical “War on Drugs” incarcerates peaceful citizens at heavy social cost. Breaking up families and causing productive wage earners to lose their jobs simply for seeking relief from pain or other ailments is neither fair nor wise public policy.

The general public clearly understands this. Currently, twenty-five percent of Americans live in a state with medical marijuana programs, with more and more states considering such legislation.

Those who doubt that marijuana has medicinal value should speak with a patient; the range of conditions marijuana helps patients manage is truly astonishing, and must be why the pharmaceutical industry now has over fifty researchers attempting to isolate the plants’ active ingredients.

Attorney General Tom Horne has estimated that Arizona’s medical marijuana industry could generate $40 million annually in taxes; others say that it could be significantly more. The public supports adding a reasonable sales tax to medical marijuana. Arizona could certainly use the funds, and should allow patients their choice of medicine as provided by passage of the Arizona Medical Marijuana Act.

Mr. Gogek could then return his focus to treating abusers of hard drugs such as methamphetamine, heroin, cocaine, oxycontin, hydrocodone and percocet. Medical Marijuana is a safe alternative to many over-prescribed pain relievers; as such, it should be welcomed by those professing an interest in saving people from the ravages of drug abuse.

The Protect Arizona Patients Coalition urges the Arizona Republic to report objectively on the issue of medical marijuana. To do so requires only that its reporters talk with MMJ patients and their doctors. Many of our members would welcome that opportunity.

By Doug Banfelder|2012-01-14T16:53:13-07:00August 11th, 2011|Miscellaneous|Comments Off

Home Grows Void Homeowners Insurance

Considering growing your own? Many are, especially since the Governor’s lawsuit has put the dispensary process on hold.

What most don’t realize, however, is that growing marijuana inside your home or attached garage voids your homeowners insurance. There is not ONE carrier who will approve such activity.

No big deal, unless you have a claim – burglary, injured guest, fire, broken window, hail damage… if your carrier finds a grow, kiss your claim goodbye.

I had a quote request from a fellow who had leased a storefront for his dispensary; the cultivation plan included growing in his large home basement. Great security, lots of space, controlled environment, and no lease payment – all good. Except that none of my carriers, even the MMJ specialty firm, would go near this particular combination of risks.

I don’t like to tell people bad news. Ed Rosenthal’s coming to town and everyone is excited, and the hydroponics stores are thrilled. But… a better plan, and feasible at least for caregivers, is to band together and rent warehouse space, which can be insured against liability, theft, even local government raids.

Your house is your home, and should something happen, you’ll want to be reimbursed for any damages – not left holding an empty bag.

By Doug Banfelder|2011-07-11T17:14:25-07:00July 11th, 2011|Stories & Articles|Comments Off

The Value-Added Insurance Agent

What should MMJ entrepreneurs expect from their insurance agent? Besides providing the correct coverages for one’s business, a dedicated insurance professional can deliver other services that support your goal of obtaining an ADHS dispensary license.

For example: to help prospective dispensary owners finalize their applications, agents can provide them with quotes for all pieces of the business: General Liability, Professional Liability, Property (to include Crop Coverage), Business Auto, Directors & Officers coverage for your Board, Med Mal and Workers Compensation for your staff. Doing so will make your application that much more appealing to ADHS.

Another advantage of working with your agent, especially right now, is that fine-tuning your building layout and operational plans will help you to realize all available premium discounts for meeting the safety and security criteria insurance carriers have.

Your agent can also help you win a Special or Conditional Use Permit by writing a letter in support of your zoning request to the city or county you want to locate in; a personal appearance on your behalf is even better.

My experience has been that those in advisory or decision-making positions find it compelling when a risk-management professional testifies that MMJ businesses pose no more threat to the community than pharmacies, jewelry stores or even the local Circle K.

One issue often overlooked is the effect an MMJ business will have on the landlord; many of their current “Lessor’s Risk” policies will be canceled by mainstream (“preferred” or “admitted”) carriers when a medical marijuana use begins operations in their building. Your agent should be on top of this so that you don’t end up paying for a big premium increase to your landlord’s policy.

Correctly insuring your dispensary, grow, delivery service or testing lab demands knowledge of the MMJ industry, because Medical Marijuana surely ain’t tiddly-winks. Find an agent that knows the business, has their ear to the ground and offers value-added service to get the most from your partnership.

Doug Banfelder is a Commercial Insurance Specialist. He can be reached at www.PremierDispensaryInsurance.com or by calling 480-315-9051

By Doug Banfelder|2012-08-18T09:26:34-07:00May 18th, 2011|Dispensary Insurance, Stories & Articles|Comments Off

Insuring Your Medical Director

According to ADHS Director Will Humble, the most important name in your application will be that of the medical director. This is because Mr. Humble sees the long-term success of Prop 203 depending more upon the actions of the medical community than any other factor.

With those thoughts in mind, choosing the right medical director becomes of paramount importance. Unfortunately, however, the ADHS mandate that the director be “available” during dispensary business hours complicates the hiring process by considerably shrinking the available talent pool.

Another issue impacting the hiring process is medical malpractice insurance. Doctors with current practices already have policies, including those working part-time. Those willing to come out of retirement to serve a dispensary or disensaries only need coverage for the limited services they will be providing.

Fortunately there are flexible, cost-effective options. For those with active practices there is no need to completely change policies – instead, separate, MMJ specific policies can be obtained that essentially supplement the coverage they already have. The same goes for the semi-retired.

Retired doctors coming back to work can find medical malpractice policies that cover just the activities they list on the application. In all cases the premium costs are quite modest.

Don’t let concerns about obtaining reasonably-priced medical malpractice insurance keep you from finding the doctor or doctors you need to make your application shine with ADHS.

For further information or to receive a quote, I can be reached at www.PremierDispensaryInsurance.com

By Doug Banfelder|2012-08-18T09:25:16-07:00May 15th, 2011|Dispensary Insurance, Medical Directors|Comments Off

An Insider’s View – Three California Dispensaries

Last Sunday I joined a group of Arizona MMJ industry folks who had the rare privilege of visiting three L.A. area dispensaries. It was an excellent study in contrasts.

Our first stop was The Farmacy, a tidy and tiny (850 sq ft) storefront shop laid out in conventional fashion on the edge of the UCLA campus. Large windows with nice displays, good interior lighting, a long counter and fully stocked glass showcases set the tone.

This shop does a brisk business in a variety of herbal remedies, effectively broadening it’s revenue base. A lack of seating discourages lingering before or after the sale. A lone, contracted security guard keeps a watchful eye. Unarmed except for pepper spray, he said he can most often talk the occasional bad actor out of aggressive or other unlawful behavior. All in all, a nice, everyday retail environment, with the only unusual element, at least to we ‘Zonies, being the many small jars of MMJ bud on display behind the counter.

Our next stop was The Herbal Caregiver, a second-story walkup in a somewhat grittier part of town.

After being buzzed into the stairwell of this converted apartment, patients ascend to the second story and enter a lightly furnished, somewhat funky former living room and do their transactions at the counter, behind which is a video monitor showing the front door and around inside. Literature and business cards of interest to patients could be found on the coffee table. The effect was kind of homey, in a college dorm sort of way.

Our last stop was the Rainforest Collective, located in a comfortable neighborhood of mixed business and residential uses. It features an ambiance all it’s own, with walls covered in a colorful jungle motif and astroturf underfoot. Furnishings inside the large waiting room consist of a small desk for the receptionist and couches, a tv and space enough for members to congregate before heading out to their weekly volunteer community project.

Again, one had to be let into the building. After completing the requisite paperwork the receptionist buzzes patients into a small vestible separating the front room from the dispensary itself. After the first door closes, the budtender opens the second door to allow entry into the dispensary. Both she and the receptionist wore remote panic buttons, and the store’s manager is certified in security techniques.

If you’ve ever been inside a Trails or similar store, this dispensary would look familiar, with a couple of important differences: first, the jarred buds – at Rainforest collective there are many on display. We also saw more infused products here than in the other locations.

Interestingly, on the infused products there was very little labeling – mostly just the manufacturer’s logo and perhaps some contact information. It seems advisable, however, to list all ingredients, nutritional values and doseage information for the patient’s sake, and indeed this is a strict requirement by insurance carriers offering product liability coverage.

Undoubtedly Arizona dispensaries will share some characteristics with those in California, but with the industry rapidly evolving and our program coming online nearly a decade and a half later, Arizona’s MMJ entrpreneurs can benefit from the many lessons learned by the movement’s original pioneers.

Many thanks to our dispensary hosts, with special gratitude to guide Bob Calkin – here’s wishing you all much continued success. For more information about what I learned on this tour, email me at: [email protected]

By Doug Banfelder|2011-05-04T17:17:53-07:00May 4th, 2011|Dispensary Insurance, Stories & Articles|Comments Off

Good Planning Reduces Risk – and Insurance Costs

Your medical marijuana dispensary, grow site or infused product facility’s design, interior layout and security measures all affect your insurance costs. Reducing risk by incorporating certain safety and security elements into your site plan(s) will create a safer environment for customers and staff while earning you discount credits from underwriters.

The same is true for the operational aspects of your business – for example, how employees are hired and trained can minimize the chances of general and professional liability claims, while customer theft and employee dishonesty losses can be significantly reduced with good policies, procedures, and inventory control practices. How you bring infused products to market also requires careful consideration.

Following is a list of advisable security measures; while some are required by ADHS, others represent best practices that will make insuring your business easier and more affordable.

Dispensaries

1. Building envelope security

All windows and doors connected to 24 hour centrally-monitored alarm
Bars security film or roll down steel covers on windows
Metal doors
Lighting of parking lot and building
24 hour video surveillance, with video kept a minimum of 30 calendar days
Battery back up system for cameras
Structural and/or operational means to ensure that medicine off-loading is discreet and safe

2. Interior Security

Video cameras at point of sale, with video kept a minimum of 30 calendar days
Battery back up system for cameras
Man trap or other controlled entry (can be done in an aesthetic way)
Multiple panic buttons, easily accessible by staff
Safes and Vaults:
800-2000+ lb safe w/ 1 hour fire rating (in-ground safe better)
Safes under 2000lbs must be bolted to ground for theft coverage
Refrigerated walk-in coolers can qualify as a safe if 1 hour fire rated with well-secured door
Cargo or shipping containers may be acceptable as safes (get prior approval from your agent)
Occupying entire building preferred
Show cases should be of locking type (dispensing machines also good)
Major percentage of medicine must always be kept in a safe in private, locked room
FlashFog or similar security system

Cultivation Sites

1. Building Envelope Security

Same as for Dispensaries, including discreet medicine loading access

2. Interior Security

Multiple panic buttons, easily accessible by staff
24 hour video surveillance capable of identifying any activity occurring in low light conditions, with video kept a minimum of 30 calendar days
Battery back up system for cameras
Letter by Licensed Electrical Contractor stating system is sufficient for load
Back-up system for electrical supply
Automatic Water Shut Off Valve for timer-operated watering systems
Measures to ensure constant temperature
Measures to ensure constant humidity

3. Operational Security

Money handling – methods minimizing cash transactions preferred
Staff – Drug and Background Screened prior to hiring?
Oaksterdam University Graduates preferred – ask your agent
Security Personnel – Employed & Unarmed preferred
Staff and Security: Professional Liability (Errors & Omissions) coverage
Laboratory Testing on 100% of all products
Directors & Officers insurance for Board Members
Trade Association membership may qualify discount – ask your agent

Infused and Manufactured Products

Underwriters assessing Products Liability risks consider:

All products manufactured, sold or distributed
Labels, website text and other marketing material, to include:
Nutritional Facts, Ingredients, and Measurement of THC
Will any vendor repackage, relabel or modify your product? If so, list all products manufactured by you but sold by another entity.
Who are your top customers?
Is there a written products recall plan?
Any new products to be introduced in the next 12 months?
Can your products be identified from those of your competitors?
Could your products or services be used on or in connection with other products?
Any Hold Harmless Agreements/Warranties/Guarantees with others?
Products tested and labeled to meet government or industry standards?
Do you belong to any industry-product standard organizations?
Do you have a written loss-control program in effect?
Do you have a written quality control procedure?

In short, good risk management lessens the potential for loss to you and your insurer. Consult a MMJ speciality agent now to find out how to obtain discount credits for your business and site plans, increasing everyone’s safety and security while reducing your annual insurance costs.

By Doug Banfelder|2011-04-26T06:25:45-07:00April 25th, 2011|Dispensary Insurance, Stories & Articles|Comments Off

Medical Malpractice Insurance

Although referring physicians and dispensary medical directors will each play distinct roles in Arizona’s MMJ industry, they nonetheless share similar professional risks regarding their activities.

Both must be physicians – that is, a “doctor of medicine who holds a valid and existing license to practice medicine” (which under current rules include similarly credentialed osteopaths, naturopaths and homeopaths).

The range of activities these professionals will engage in includes but is not limited to: patient assessment – or the creation of rating scales for patient self-assessment; recognizing signs and symptoms for substance abuse (for all substances, or just medical marijuana? Current draft rules don’t say); patient caregiver education on potential risks and benefits of the use of medical marijuana for patients under the age of 18; and, the communication of patient usage and symptoms between medical directors and referring physicians.

These activities all require the assumption of some level of responsibility for patient care, either directly (referring physicians) or by way of dispensary personnel (medical directors). Physicians serving the MMJ community would be well-served to have a detailed conversation with their insurance agent about the limits of their medical malpractice policies before beginning to practice in this new arena.

By Doug Banfelder|2011-03-10T07:16:27-07:00March 9th, 2011|Dispensary Insurance, Stories & Articles|Comments Off

Insuring Arizona Medical Marijuana Dispensary Business Buildings for Property and Liability

Developing your business plan in anticipation of filing an application with Arizona Department of Health Services ? If so, you’re likely scrambling to find the perfect location(s) for your new Arizona medical marijuana business. Whether you’re seeking a storefront or a warehouse, there are three things about insuring building(s) for dispensaries, grows or other medical marijuana business uses you should know going in:

“Admitted carriers” such as Progressive or Farmers will not insure medical marijuana businesses – period. They have made a business decision to not serve specialty markets.
A few other carriers might insure your leased or owned buildings, depending upon the specific circumstances. They are willing to take on more risk, but the medical marijuana industry is not their specialty.
Comprehensive coverage for your medical marijuana business, written with A-rated carriers, IS available from agents and insurers who have made a commitment to the medical marijuana industry.

Let’s keep these few facts in mind as we discuss the best way to protect yourself and your future business through the uncertainties of the current pre-DHS application period.

Getting Into the Building

Many landlords require proof of property and liability insurance before giving their new tenants access to the building. This is prudent, and generally required under the terms of the building owner’s “lessor’s risk” policy.

Your future landlord needs to know that claims against that policy resulting from MEDICAL MARIJUANA business activities aren’t likely to pay out, however, as suggested in the first bullet point. While it’s their responsibility to discuss any tenant changes with their agent, I always advise my clients to bring the topic up so that everyone is on the same page, helping all parties to avoid any nasty surprises later.

Insuring Appropriately Now While Planning for Later

While waiting to find out if you’ll receive a dispensary license from DHS, you need only insure yourself against liability, any damage to your newly leased property and loss or damage to property you may have in the building. Simply put, basic coverage is sufficient for this stage.

Many carriers will write a policy for empty office or warehouse space, but offer only a one year term – and given that it will be just a few months before you receive your dispensary license (or not) this doesn’t make a whole lot of sense, especially as they will charge you a short-rate penalty for cancelling before the end of the term.

A better approach is to obtain your basic policy now from a carrier that won’t penalize you later, when you’re ready to begin insuring your new MEDICAL MARIJUANA operation with industry-specific coverage. You can either get a basic six-month policy that can be “flipped” to another carrier (under the same parent company) to one that specifically includes coverage for MEDICAL MARIJUANA businesses, or get a pared down policy from a company specializing in MEDICAL MARIJUANA policies and simply add additional coverage as needed. Either approach will help you to avoid unnecessary penalties or fees while ensuring that your new venture is appropriately covered.

Such flexibility in coverage costs a bit more, but provides several significant benefits – no risk of denied claims due to undeclared MEDICAL MARIJUANA operations, eliminating the danger of coverage gaps or lapses, and simplying the whole insurance process – all far outweigh the small additional costs.

The majority of carriers serve the majority of the market. If your business is out of the ordinary, however, your insurance needs likely are as well. Specialty brokers meet those needs.

Doug Banfelder is a Commercial Insurance Specialist. Reach him to insure your Arizona medical marijuana dispensary at 480-315-9051 or www.PremierDispensaryInsurance.com

By Doug Banfelder|2011-10-02T18:14:18-07:00February 9th, 2011|Dispensary Insurance, Dispensary Leases, Stories & Articles|Comments Off

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