On March 31, 2021, Gov. Andrew Cuomo signed Senate Bill S854A to enact the Marijuana Regulation and Taxation Act, making New York the 16th state, along with the District of Columbia, to legalize adult-use cannabis. The potential implications of this Act on the economic and social landscape of New York state are staggering. The legal cannabis market in New York state is expected to capture $1.2 billion in sales by 2023 and the state expects to eventually collect $350 million in annual revenue.
As both the number and type of New York businesses in the legalized cannabis industry continue to grow, their need for insurance coverage will only expand. Plus, New York, as a global financial and investment epicenter, faces unique risks in the cannabis space as deals, investments, acquisitions, and mergers become common vehicles to cash-in on the green. These risks include claims by investors, customers, vendors, competitors and others for a variety of claims, including, mismanagement, misrepresentation, breach of fiduciary duty, misappropriation of trade secrets, and fraud. These risks exist in both public and private companies.