Research & Development Risk Finding gold in R&D — but also major risk. Cannabis research and development (R&D) is expanding, helping drive growth and product innovation. The industry has been working with THC and CBD for some time but has recently expanded into cannabigerol (CBG) and other lesser-known cannabinoids. New products and opportunities are always exciting. However, new cannabis products push the legal and risk envelope because of confusing legislation and evolving regulations. For example, beverages infused with hemp-created Cannabis companies with active R&D operations also THC have been sold through a loophole in federal farm need to protection; however, many policies have product 9 exclusions that limit coverage or offer none at all. legislation. But insurers are hesitant to underwrite such operations producing THC-infused beverages, as they The right broker can help businesses review their new leave a cannabis company open to product liability risk, as policies carefully to avoid these traps. An experienced well as possible regulatory risk. broker can also offer alternative risk management Whether it’s consumables or beverages, cannabis practices while still allowing businesses to continue executives will need to evaluate risk exposure with any with R&D. new product launch as it carries risks unique to the industry. Organizations should consider the best ways to protect themselves (i.e., product liability and product recall 9. Commonwealth Beacon, “About those beverages with THC from coverage) — from the manufacturing phase to distribution hemp,” April 6, 2024. to sales. 6