Booming Cannabis Conference Business Isn’t Immune to Coronavirus Fears

Cannabis has been touted as a therapy for just about everything from anxiety to cancer, but even the well-affirmed feel-good effects of the now broadly legalized drug aren’t immune to the caustic impact of an unfolding international pandemic.

Joining the growing ranks of political rallies and sporting events temporarily shutting down – and large insurance conferences being canceled or postponed – the usually booming business of cannabis conferences is seeing one major event cancellation after another over fears of the spread by COVID-19, or the Coronavirus.

The National Cannabis Risk Management Association announced this week it was postponing NCRMA2020, its upcoming conference in Las Vegas at the Bally’s hotel and resort on March 22-24.

“Our responsibilities as a risk manager transcend our passion and desire to bring our membership together,” Rocco Petrilli, chairman of the NCRMA, said in a statement announcing the cancelation. “Though we are disappointed to have to postpone our event, as our leadership continued to monitor the developments, it became abundantly clear that this was the correct course of action. Our hearts go out to families and communities that have been affected by the COVID-19. We hope our decision will help reduce the spread of this virus.”

Organizers of the event, which was expected to draw up to 500 attendees, are looking at dates later this year for NCRMA2020. They plan to announce dates and the venue at a later date.

SXSW set for Austin, Texas, later this month, which includes a massive multiday cannabis track called Cannabusiness, was canceled over COVID-19 fears. The popular trade show Natural Products EXPO West in Anaheim, Calif., which had numerous cannabis sessions scheduled, was also postponed.

One event touted as “Hazy: Friday the 13th” in Los Angeles this week, which features live DJs, a tattoo bar, fresh tacos, and a curated cannabis menu from The Pottery retail dispensary, is going on as planned – with a few precautions.

“We will have silicone joint tips for you at the door – and plenty of hand sanitizer, water, and kombucha throughout the party,” an updated invite to the event states.

Other cannabis events that were recently canceled include The American Herbal Products Association’s Hemp-CBD Supplement Congress, which was scheduled for March 14-15 in Portland, Ore., and Cannabis Cover in Denver, Colo.

While event organizers have been getting the jitters over the Coronavirus, the sponsors who provide monetary and logistical support to make these events happen are also being highly cautious.

Weedmaps, a large tech company that sponsors cannabis events across the country, is feeling the impact, according to Travis Rexroad, director of communications at the Irvine, Calif.-based company.

“As with most every industry, there are obviously both short- and long-term implications that we’re currently navigating as various conventions and events are being postponed or canceled altogether,” Rexroad said. “There are a lot of unknowns at this point, but the safety and health of our organization and the cannabis community at large will always be prioritized.”

Michael Sampson, a partner in the insurance recovery group and co-vice chair of the cannabis law team for in the Pittsburgh, Penn., office of ReedSmith, is spending much of his time lately advising his clients to meticulously document their losses.

The idea is – for those clients who believe they will be able to submit a claim – to have documentation and receipts to show lost revenue, which sponsors or vendors pulled out of an event, a letter from a local government declaring large events can’t go forward, or anything to prove tangible losses.

Even for those clients who are doubtful they’ll be covered, his advice to them is to go over their policies with himself or their brokers.

“Don’t just assume there’s not coverage, because the losses here are likely to be significant enough to take the time to see if coverage is there,” Sampson said.

Despite the optimism of coverage, he believes that while many insureds will look to business interruption coverage for relief, “more likely than not that there won’t be coverage.”

That’s because the language in most BI policies requires direct physical damage, or they may have a communicable disease exclusion, which has become more common over the years.

Paul White, an insurance litigation attorney at Wilson Elser Moskowitz Edelman & Dicker LLP, said he’s been hearing from numerous clients with coverage questions about event cancellations.

“I am aware of clients expressing interest in event cancellation,” he said, adding that the sectors he’s been hearing from are primarily businesses in the hospitality industry.

One of the misconceptions policyholders have is they should covered by the impacts of a cancellation because people have lost interest in attending these events over a fear of catching COVID-19.

Event cancellation coverage usually outlines a specific peril – such as death, accidental illness, travel delays, venue delays, inclement weather, he noted.

“Fear alone is typically not going to justify collecting your insurance for cancellation of an event,” White said. “A lot of these policies exclude coverage due to a communicable disease.”

Sampson, who is also advising his clients that an ordered shutdown by a government entity could trigger “civil authority coverage,” which may be found in some property policies, believes the widespread losses are motivation enough for businesses to take the time to closely examine all possible coverages.

“We’re getting a lot of questions,” Sampson said. “Anybody who has suffered a loss should talk to council or their brokers and look for potential coverage. Any coverage that would provide any relief to the cannabis industry or any industry right now would a good thing.”