As of 2019, 11 states have legalized recreational cannabis use – Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington.

While each of these states has their own unique framework for cannabis regulation, one thing is certain – they all need to have the right recreational cannabis business insurance coverage.

What policies are available for recreational cannabis business insurance?

Cannabis businesses face significant risk and obstacles. Some we would like to highlight for you are Theft, General Liability, and Product Liability.

Theft has been gaining attention in the cannabis industry, regardless of strict security requirements for recreational cannabis businesses. In California, Sacramento City officials asked commercial businesses to review their security protocols last January, after seeing a surge in cannabis business thefts in distribution centers. With banking solutions not quite in place, businesses hold a lot of cash, which make them prime targets for robberies. Adequate theft insurance coverage can protect from losses from burglary and robberies, helping you get back on your feet after an unfortunate event.

General Liability risks in a recreational cannabis business are similar to those of other manufacturing or agricultural businesses. Crop Failure, workplace accidents, property damage, and more are all common scenarios any of these businesses can face – and need to have a policy in place for. Depending on the type of recreational business you have, you may want to consider additional coverage for risk exposures you may face (A competent cannabis insurance expert can help you identify potential risks, call our office for a free consultation to find out what risks you may want to consider).

Product Liability is important for medical cannabis businesses, and especially important for recreational establishments. Ingestible products are gaining in popularity, as well as the risk of safety recalls. THC, a main compound in marijuana, has a psychoactive effect and if products are misrepresented, mislabeled, or harm an individual it is opening up a business for litigation.

Some states don’t require all these insurance products for your business, but we still highly recommend them. Watch your recreational cannabis business insurance policy closely as well – many insurance companies purposely exclude protection for Schedule 1 substances, which in the event of a claim would nullify your protection.

That being said, there are some companies that are working intimately with the cannabis industry to ensure that the unique hazards in this emerging industry are understood and accounted for in insurance policies. We at Lions and Coventry Insurance Services have taken time to build relationships with these companies to help advise them on what clients need. We take your protection seriously, and invite you to give our office a call for a free review of your policy – We will make sure everything you need is covered, and if not, offer solutions for you. Contact our office with any questions you may have, we would be happy to help!