HEMIC will no longer be providing worker's compensation insurance to seven medical marijuana dispensaries.
The decision, announced Wednesday, was the result of a unanimous vote by HEMIC's board of directors.
The Hawaii Employers’ Mutual Insurance Company has sent 30-day policy cancellation notices to the dispensaries.
HEMIC said it opted to drop the dispensaries after a legal evaluation of state and federal law.
“HEMIC has received two outside legal opinions regarding its role in providing workers’ compensation coverage to Hawaii’s medical marijuana dispensaries," said HEMIC CEO Marty Welch, in a news release.
"These legal opinions clearly acknowledge that HEMIC and its board of directors have potential exposure for criminal liability based on federal law applicable to marijuana businesses. After receiving these legal opinions, the HEMIC board has voted unanimously to discontinue these policies and fully refund all premium payments to any dispensaries currently insured by us."
The decision is a blow to Hawaii's fledgling medical marijuana dispensary industry, which has already faced a series of delays.
It's unclear where the dispensaries will go for worker's compensation insurance.