A subsidiary of Nationwide told an Illinois federal court it does not have to cover a proposed class action accusing a cannabis company of misrepresenting the safety and labeling of cannabis-infused products, ClassAction.org reports. The insurer says the company’s liability policies expressly exclude allegations of fraud, misrepresentation, or deceptive practices.

The underlying suits claim certain cannabis products—including vape oils sold as concentrates—were mislabeled to circumvent Illinois’ stricter THC limits, and that consumers were misled about potency and safety. Plaintiffs contend those practices violated state consumer protection laws and exposed buyers to unsafe products.

Nationwide’s filing highlights the growing difficulty cannabis businesses face obtaining dependable insurance as litigation risk increases. If the court sides with the insurer, the cannabis company would have to cover its own defense costs — a potentially significant financial burden in an industry already navigating complex regulations.

This article was adapted from an original report published on tobaccoreporter.com. All rights belong to the original publisher.