CBD vs THC Insurance
CBD vs THC Insurance
Update — October 19, 2026: Federal hemp rules are changing. Starting November 12, 2026, hemp-derived products containing cannabinoids that a cannabis plant cannot naturally produce (synthetic cannabinoids) fall outside the federal definition of hemp. On December 11, 2026, a total-THC standard, a 0.4 mg total-THC-per-container cap, and the exclusion of cannabinoids synthesized outside the plant (such as delta-8 converted from CBD) take effect. Earlier versions of this page said hemp businesses have no insurance requirements. That framing is out of date: even where no statute requires a policy, retailers, distributors, landlords, and lenders routinely require coverage, and the federal change raises new policy-exclusion questions for hemp and CBD products. See Federal Hemp Ban: What Happens to Your Insurance. General information, not legal advice.
Insurance is essential for every business, regardless of whether you are in the legal cannabis (THC) industry or industrial hemp (CBD) market.
The type of insurance you need depends on your business activities, and the risks you are exposed to. All states have specific laws in regards to insurance requirements for different business types. For example, in California, all cannabis businesses are required to have a Commercial General Liability Insurance policy with a minimum of $1,000,000/$2,000,000 in coverage. Hemp and CBD businesses may not face the same state-mandated insurance minimums as licensed cannabis operators, but most retailers, distributors, and landlords require product liability coverage, and the 2026 federal hemp redefinition raises new coverage questions. See our federal hemp ban insurance guide.
Insurance regulations are governed by a state regulatory body and each state can set its own requirements. Each state program has their own name, such as “The California Department of Insurance” or “Office of the Insurance Commissioner” (Washington). You can look to these regulatory bodies for information on what you need for your specific business.
Some insurance is a no brainer – All commercial vehicles need to have Commercial Auto Insurance, all businesses that have employees are required to have General Liability Insurance, etc. These are not business specific. Beyond these, when we look at specifically the THC and CBD market, we need to think about what makes the business unique and what it is exposed to.
Beyond the legal requirements based on your place of business, when making insurance decisions regarding your company it is in best practice to look at what could happen financially within your business, and the loss you would retain. For example, in California Product Liability is not a requirement for Cannabis Businesses, but if someone were to get sick using your product, you could be at risk for hundreds of thousands of dollars in medical bills and damages. Whatever your state requires, a hemp or CBD business owner needs to take a good hard look at what they may need – equipment breakdown, crop coverage, and theft may be a few to consider.
Things also can change year to year, as new insurance regulations are passed. Your business may have grown this year, or new laws passed can affect your business insurance requirements for both THC and CBD based businesses. Each year you will want to review your policy to ensure that you are up to date with your coverage and there are no gaps in your insurance policy.
Overwhelmed? Its okay, we are here to help. We have specialists in our office that only work on Commercial Cannabis and Hemp Insurance, and can assist you! Give us a call at (916) 967-7715 today!
Operating in California? See our guide to cannabis insurance for California licensees.