Arkansas Cannabis Grower Settles with Insurer over 5,000 Dead Plants

An Arkansas marijuana grower has apparently reached a settlement deal with its insurance company following a lawsuit that alleged the insurer wrongly denied a claim to partially cover the loss of 5,000 cannabis plants.

Though terms of the deal have yet to be disclosed, Arkansas-based River Valley Production LLC’s attorney wrote in a court filing that “the parties have reached a settlement in principle and a formal dismissal will be forthcoming,” Law360 reported.

River Valley filed suit in March against Obsidian Insurance Company, alleging that the insurer should have been liable for its policy coverage limit of $300,000, after River Valley lost more than half a million dollars’ worth of cannabis due to the failure of a third-party vendor. That vendor allegedly screwed up the installation of machines meant to keep the plants alive.

Obsidian originally denied coverage after another third-party agent, Avant Specialty Claims, reported to Obsidian that the crops were lost due to an “equipment breakdown,” but River Valley countered there was no breakdown.

Avant also incorrectly asserted at first that the insurance policy in question didn’t cover crop loss, River Valley contended in its lawsuit.