Cannabis Industry Health & Safety

All employers in the cannabis industry, including those who cultivate, manufacture, distribute, sell, and test marijuana products, must take steps to protect their employees from all health and safety hazards associated with their work.

Many states have legalized the use of marijuana, both medicinally and recreationally. Studies have long focused on the public health and safety issues associated with these legislative changes. Still, few have given significant attention to the occupational health and safety of those working in the industry. Like any other industry, there is a strong need to take precautions and implement health and safety programs to protect employees of cannabis production and distribution facilities. As demonstrated by MAC Safety, Inc., with capabilities and knowledge of implementation of safety plans, there is an affordable and effective way to provide employee safety.  

The Scope of Present Dangers

The hazards associated with workplace accidents can range from minimally damaging to severe and life-threatening. Regardless of how extensive an injury may be, there is always the potential for financial hardship, emotional suffering, and lost labor to compound an already complicated situation. Within the cannabis industry, the following dangers are present:

  • Biological hazards such as mold, allergens, or sensitivities
  • Chemical hazards such as carbon dioxide, carbon monoxide, pesticides, disinfectants, nutrient chemicals, corrosive chemicals, and indoor air quality
  • Physical hazards such as compressed gas, combustible or flammable liquids, ergonomics, occupation injuries, electrical, workplace violence, slips and falls, noise, extraction equipment, hand tools or machines, lighting or height hazards, and forklift injury

The Impact of Workers’ Compensation in the Cannabis Industry

Just as protections are afforded in those working in manufacturing, healthcare, or retail, carrying coverage in workers’ compensation for cannabis industry activities reduces the financial liabilities against company’s where an accident report is filed. A workplace accident or incident that causes illness, injury or loss of life for an employee can lead to a lawsuit for medical reimbursement and corresponding damages. Companies that carry workers’ comp coverage can have the costs of litigation or paying out medical benefits taken care of by the insurance provider.  MAC Safety can work directly with your risk team and insurance carrier to help keep these costs in line.

The Necessity of a Health and Safety Program

To limit exposure to accidents involving cannabis industry workers’ compensation claims, it is important to establish robust health and safety programs. Each employee should be involved in a safety program and understand their unique role in preventing accidents. Conduct assessments to identify hazards and train employees in both preventative and response behaviors. Ensure consistency among implementation through a risk management team. Continually evaluate the safety program for deficiencies or weaknesses through feedback or incident reports and adopt corrective measures as quickly as possible.

The Benefits of a Strong Program (and working with MAC Safety, Inc.)

In addition to reducing the occurrences of workplace accidents, a strong safety program can lower the cost of a workers’ compensation plan. All safety procedures should be aligned with the requirements issued by the Occupation Health and Safety Administration, as well as any risk management advice given by the insurance provider.  Occupational health and safety regulations that may apply to employers in the cannabis industry:

Electrical Hazards

Exposures to Airborne Contaminants

Flammable Liquids and Gases

Hazard Communication

Hazardous Energy – Lockout/Tagout

Heat Illness Prevention

Machine Hazards

Personal Protective Equipment

Point of Operation Hazards

Pressure Vessels

Repetitive Motion Injuries

Sanitation and Pest Control

Slips, Trips, Falls and Use of Ladders

Some other areas to focus on for indoor growing facilities – obstructed / or reduced paths of egress, overloaded circuits – wiring, absence or lack of fire suppression systems, and the close proximity of abundant heat sources to flammable material in oxygen-rich environments.

Tax Codes – Insurance – MAC Safety (NIXN)

Section 280E of the federal tax code prohibits businesses from deducting ordinary business expenses associated with “trafficking” Schedule 1 substances.  This tax code provision was intended to penalize illegal activities, but it also prohibits 

cannabis vendors that are operating legally under state law from taking the same federal tax deductions that other small businesses can take.  A cannabis business can deduct the cost of goods sold, but it may not deduct the following: (Employee salaries, Utility costs, Health insurance premiums, Marketing costs,

 repairs / maintenance, rental fees, payment to contractors.) – 26 U.S.C. section 41 – encourages businesses to invest in technology.  MAC Safety provides to all clients our proprietary software, that meets these criteria.   The R&D Tax Credit is a dollar-for-dollar tax savings that directly reduces a company’s tax liability. There is no limitation on the amount of expenses and credit that can be claimed each year. 

General Liability Insurance

Despite the unique nature of the cannabis business, most general liability claims have been the garden variety slip and fall type premises and operation claims.  Depending on the nature of the business, insurers providing commercial general liability (CGL) insurance for cannabis-related business (CRB) are likely to consider the following underwriting factors: Compliance with safety protocols, Management experience (a core NIXN function to identify), and Training and experience of employees (another NIXN function, to identify employee experience), documentation of standard operating procedures (housed and observable in NIXN), management experience in the industry (another core NIXN feature).