Entry-level insurance premiums for cannabis industry directors and officers of public companies has more than doubled as lawsuits by investors claiming fraud and misinformation are on the rise, Reuters reports. The insurance can now run as much as $250,000 for coverage up to $1 million, on top of the $1 million firms must pay before the coverage kicks in.
Those rates are about three to seven times more than traditional industries.
Ian Stewart, partner at law firm Wilson Elser, said the firm expects “a flurry of cases holding directors personally liable,” while Avis Bulbulyan of cannabis consultancy Siva Enterprises estimates a 50 percent increase in litigation in the industry.
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