2. Paragraph A.1. of this endorsement does not apply to goods or products containing or derived from hemp, including, but not limited to: 

a. Seeds; 

b. Food; 

c. Clothing; 

d. Lotions, oils or extracts; 

e. Building materials; or 

f. Paper. 

However, this Paragraph A.2. does not apply to the extent any such goods or products are prohibited under an applicable state or local statute, regulation or ordinance in the state where such goods or products are located.

Analysis

The form first adds an exclusion for cannabis under Property Not Covered under Coverage E - Scheduled Farm Personal Property and Coverage F - Unscheduled Farm Personal Property under Section I Coverages.

Then, an exception is added to that exclusion for goods or products derived from hemp, including but not limited to seeds, food, clothing, lotions, oils, extracts, building materials, and paper. This exception does not apply to the extent that any such goods are prohibited under state or local statutes or regulations in the state where the goods or products are located. So even though the policy provides an exception, the exception will not apply if the local or state statutes restrict such products.

B. Section III – Additional Coverages is amended as follows: 

1. The following is added to B. Extra Expense: Extra Expense Coverage under this Policy does not apply to that part of extra expense incurred, due to an interruption of farming operations, which is attributable to the design, cultivation, manufacture, storage, processing, packaging, handling, testing, distribution, sale, serving, furnishing, possession or disposal of "cannabis". 

2. Paragraph B.1. of this endorsement does not apply to the extra expense incurred which is attributable to goods or products containing or derived from hemp, including, but not limited to: 

a. Seeds; 

b. Food; 

c. Clothing;

d. Lotions, oils or extracts; 

e. Building materials; or 

f. Paper. 

However, this Paragraph B.2. does not apply to the extent any such goods or products are prohibited under an applicable state or local statute, regulation or ordinance in the state where such goods or products are located.

Analysis

An exclusion is added for extra expense resulting from an interruption of farming operations attributable to the design, cultivation, manufacture, storage, processing, packaging, handling, testing, distribution, sale, serving, furnishing possession, or disposal of “cannabis”. Then an immediate exception is supplied if the extra expenses are attributable to goods or products containing or derived from hemp. Again, this includes but is not limited to seeds, food, clothing, lotions, oils, extracts, building materials, or paper.

The exception does not apply to the extent that any such goods are prohibited by state or local statutes or regulations in the state where the goods are located. Again, while the policy provides an exception, if the state prohibits such products, there is no coverage.

C. For the purpose of this endorsement, the following definition is added:

 "Cannabis": 

1. Means: Any good or product that consists of or contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether any such THC or cannabinoid is natural or synthetic. 

2. Paragraph C.1. above includes, but is not limited to, any of the following containing such THC or cannabinoid: 

a. Any plant of the genus Cannabis L., or any part thereof, such as seeds, stems, flowers, stalks and roots; or 

b. Any compound, by-product, extract, derivative, mixture or combination, such as: 

(1) Resin, oil or wax; 

(2) Hash or hemp; or

(3) Infused liquid or edible "cannabis"; 

whether or not derived from any plant or part of any plant set forth in Paragraph C.2.a.

Analysis

A definition of cannabis is then provided. Cannabis is defined as any good or product that contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, whether the substance is natural or synthetic. This includes but is not limited to any of the following that contain any THC or cannabinoids: Any plant of the genus Cannabis L. or any part thereof including stems, stalks, seeds, flowers, and roots; any compounds, by-products, extracts, derivatives, mixtures, or combinations such as resin, oil, or wax; hash or hemp; infused liquid or edible cannabis whether or not derived from any plant or part of plant of the Cannabis L. genus.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.