The marijuana business is just that—a business. Big business. In 2017, legal sales of marijuana (medical and recreational) reached $8 billion. With more than half of U.S. states having legalized some form of medical or recreational marijuana, and more states expected to do so, legal sales are projected to reach $22 billion by 2022. That’s more than the sale of bottled water. That’s big business.

Every business needs insurance to be successful, and the marijuana industry is no exception. Your challenge is to convince potential clients that insurance is an integral part of the cost of doing business—as important and essential, as grow lights and retail display cases—and that State minimum compulsory coverages are just that . . . minimums.

The cannabis industry can be broken out into several different spaces, each with their own potential liabilities and specific insurance needs. This means you have to be agile in your approach, tailoring your arguments to the segment of the industry you’re talking to.

Growers/Cultivators

Whether growing indoors or out, growers/cultivators are susceptible to crop loss that can be devastating to their business. Fires and inclement weather outdoors, and sprinkler and equipment failure indoors are just the beginning. Depending on the state, the grower may need government mandated monitoring/surveillance equipment to mitigate theft, expensive ventilation systems, burglary prevention—the list goes on. Risk management is just as important in the cannabis industry as any other. For growers, this includes processing, harvesting, packaging and even transportation.

Dispensaries/Retailers

Dispensaries/retailers face all of the challenges, and all of the insurance needs of any other retail establishment. Like any other retail business, dispensaries are vulnerable to theft. This is especially true in this industry, as they are often dealing with large sums of cash, coupled with banking restrictions through federal regulations. These businesses are also selling high target products, similar to that of a jewelry or cell phone store. The bottom line is, running a retail business professionally requires a professional level of insurance.

Edibles/Infused Products

From gummies to chocolates, beauty products to beverages, edible/infused products are a large and growing segment of the cannabis industry. They also bring special added risks due to the fact that they contain the psychoactive compound THC, leaving manufacturers, distributors and retailers open to product liability claims. As we have seen with the most recent ‘vape crisis,’ the potential for damages here makes insurance a mandatory business expense.

Even if they were in the widget rather than the marijuana industry, there are still questions of liability that your potential clients should consider. All the coverage that other businesses carry to protect themselves and their premises from lawsuits and disasters apply here. It can’t be stressed enough that they should treat their business like any other business, and that includes insurance.

Interested in working with Cannasure and growing your marijuana insurance practice? Get appointed.

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