Hawaii’s marijuana dispensaries received another set-back this week when a key insurer pulled out of their market. Pacific Business News editor in chief A. Kam Napier, has more.

We’re not talking about health insurance. We’re talking about the workers compensation insurance that employers are required to carry in order to have employees.

This week, Hawaii Employer’s Mutual Insurance Company, or HEMIC, gave a 30-day notice to seven of the eight licensed medical marijuana dispensaries that it would be withdrawing. In a statement, HEMIC explained that quote, “HEMIC and its board of directors have potential exposure for criminal liability based on federal law applicable to marijuana businesses.”

The issue is that while some states have legalized medical and even recreational marijuana, it remains a prohibited Schedule 1 drug under federal law. As a result, the new marijuana industry nationwide has had difficulty obtaining ordinary services such as banking or insurance.

The seven Hawaii dispensaries that had been covered by HEMIC are now scrambling to find a new insurer. Penalties for failing to offer worker’s comp insurance increased last year from $1 per day per employee, to $100 per day per employee, so fines could quickly add up for business that have yet to be able sell any products.

It’s the latest in series of delays that have kept dispensaries from opening for more than a year now. So far, only five dispensaries have been approved by the state Department of Health to begin growing plants and only three have harvested crops.