A new opinion from the District of Oregon found insurance coverage for a fire arising from the preparation of CBD salve, notwithstanding the policy’s Controlled Substance exclusion.
According to the court filings, the Bogards were legally growing hemp in accordance with a “Hemp Pilot Program,” and they used that hemp to make CBD products, including a CBD salve marketed as “Dr.
The dispute hinged on whether the hemp used to make the CBD salve contained less than 0.3 % delta-9 THC, which is the limit after which cannabis and any derivatives become federally illegal controlled substances under the Controlled Substances Act and 2018 Farm Bill.
For that reason, the Court refused to rely on the total THC level in the testing results, which included delta-9 THC that was created by conversion from THCA.
The most important takeaway is that coverage denials should not be accepted at face value.