Insuring your Cannabis Business
Imagine you’re starting the flush on 100 of the finest Girls Scout Cookies plants you’ve ever grown. You finally have the room optimized, nutrient and lighting schedules perfected and are expecting the best yield in months. The buyers are lined up for the best flower and processors are anticipating source material for an incredible run of extracts. As you walk up to your facility you hear a ticking, like a pump didn’t reset properly. The ticking gets louder as you approach and open the door only to be met with 4 inches of standing water and a room full of very sad, over watered, and soon to be dead plants.
That’s it, the entire crop is ruined. Your investment of labor, love, and money is gone. Or is it? Until recently, a small misstep could crush your crop and create a financial hole you may never recover from. However, with the advent of legalization, a new round of ancillary businesses are entering the scene offering services the cannabis industry desperately needs. Like insurance. And not just general insurance like liability or property, they’re offering coverage for your crop, equipment, income loss, even employee dishonesty.
One company, Cannabis Insurance Solutions, is applying their expertise to help meet the unique insurance challenges faced by the cannabis industry. They fill the insurance needs that standard insurance companies either do not offer or do not understand. For example, standard agriculture crop insurance operates annually and doesn’t account for cannabis’ multiple cycles, so CIS created custom plans to protect the industry. Some of the specialized insurance programs include:
- Crop Coverage – Insures the six stages of crop development should your crop die from a covered loss. Many businesses cover the entire crop, but you can also chose to cover various segments i.e. Flowering, Harvested, or Finished Stock.
- Cannabis Product Liability – Covers Cannabis products sold in your dispensary, oil you produced, or any product you manufacture.
- Business Income Coverage – Covers your expenses in the event of a loss. It’s one thing to get paid for your crop loss, it is another to have your business expenses covered while you rebuild and replant until your crop produces revenue again.
Additionally, policies covering theft and product loss are available and gaining traction due to a recent increase in armed robberies. As cannabis acceptance continues the industry can expect access to more and more services, like banking and advertising, to help their business and normalize cannabis.