If you are suing your cannabis insurer, read this first. The venue in which you plan to file is of the utmost importance.
The status of marijuana as a schedule I narcotic has made cannabis insurance litigation a bit of a chess match. Many cannabis businesses enjoy the benefits of state legalization and the ability to freely insure their operations. However, this does not impact the strictures of federal law.
One underappreciated challenge arising from this conflict in laws is choosing where to sue an insurer that will not honor its obligations under a cannabis insurance policy. The wrong choice could doom a lawsuit from the start.
Choosing your battleground
Typically, a litigant has a choice between suing in state or federal court. The first key jurisdictional elements is where each party is located. The second is where each party does business.
Federal court litigation, if available, can have many advantages. These include the ability to sue your insurer outside of their “home court” (where they are located), or in a jurisdiction that is more canna-friendly. At the very least, a non-cannabis litigant can choose: state or federal? Canna litigants, though, would be wise to add an additional layer to