Marijuana Business Insurance is now more important than ever!
We’ve all seen it in the news, and around our local towns – it goes without saying that the legal cannabis insurance industry in many states across the US is experiencing tremendous growth with states like Oregon, California, Washington, and Colorado leading the charge.
The Arc view market research group did a study showing how legal cannabis spending has grown from a 5-billion-dollar industry from 2015 now to a 7-billion-dollar industry this last year. Projections show a 300% growth over the next 5 years with a conservative estimated market of $21 billion by 2021 according to the 5th Edition of “The State of Legal Marijuana Markets” published this month.
Colorado alone had an average of over $2.5 million annual sales per dispensary for both adult and medical marijuana customers over their reported 490 dispensaries. With this comes a huge need for marijuana insurance to protect both liquid, individual and company assets.
There are laws continually being passed and changed as the states try to determine what stance they will take on the legalization of medical and recreational marijuana use. Good Marijuana Insurers are constantly evaluating which coverages makes sense to have for dispensaries and growers.
Although a social stigma still exists, the laws and the people of our country are quickly changing their views, from the ‘70s through the early ‘00s, US support for Legalizing Marijuana hovered around the 25% – 35% area. Now, within 10 short years we are approaching a 60% support rate (Gallup Poll) and so agents and brokers don’t need to worry about the public opinion as much as finding out what makes good business sense, understanding the segment, and taking advantage of the growing marijuana business segment.
Whether a cultivator, dispensary owner, supplier, landlord or any other marijuana business selling now to the public, these are now businesses that need to have marijuana insurance now more than ever, especially as the breadth of suppliers increase. As the customer base increases, so do the opportunities for lawsuits. A few days ago, a high-profile firm released a state of the union on emerging legal trends, showing the threat of product liability exposure for marijuana manufacturers and distributors. In this article, they described several claims being tested including Failure to Warn, Negligence, Breach of Contract, Youth Marketing and other areas as well.
Steps should be taken both to understand these risks, and get the proper marijuana insurance to protect against the increasing lawsuit and claims attention that this market segment is getting.
Use the following checklist to make sure all the applicable areas of your marijuana business is both educated and covered in the following areas:
- Business Income
- General Liability
- Commercial Auto
- Directors & Officers Liability
- Employment Practices Liability
- Fiduciary Liability
- Workers Compensation
- Data Breach/Network Security
- Professional Liability
- Pollution Liability
- Stock Throughput
Subscribe to our feed to stay up on the latest news – our goal is to deliver you the most value so you understand the marijuana insurance market, and can make informed decisions when evaluating where to take your business next. Stay tuned for our next article we will focus on the nuances of Marijuana Crop Insurance, or feel free to take a look at our article about Dispensaries!
CBZ Insurance, LLC