Starting a marijuana business right now is a smart idea. The marijuana industry was worth 9.3 billion in 2016 and is projected to grow to $146.4 billion by 2025 according to market research. However, it can also be a tricky business. Marijuana insurance for cannabis businesses is essential if you don’t want to lose out on massive profits.
Canna-businesses are prone to all the same risks normal businesses are. You may face burglary or theft. General liability can be a problem in any physical dispensary. You also have to consider things such as workers comp and property insurance. Plus, if your building goes up in smoke, you’ll lose tons of valuable stock.
So how can you protect your cannabis business and your profits? It’s vital to get an insurance policy geared specifically towards canna-businesses. That way, you can ensure you cover all the general risks as well as industry-specific ones. Here’s a marijuana insurance guide for canna-businesses.
Why Canna-Businesses Need Insurance
Every business needs some kind of insurance. Whether that entails covering your property to protect yourself against damages or covering general liability, it’s important to ensure your financial stability.
In addition to insuring your business for the usual reasons, there are some unique risks cannabis businesses face. For instance, cannabis may become tainted by pesticides causing customers to become sick. There are many conflicting laws in different states or areas which can make it a legal minefield. A minor problem can end up in a lawsuit, but insurance will make sure you don’t lose too much money dealing with it.
It’s also vital to insure your stock. Keep in mind that all sorts of things can go wrong from seed-to-sale. If you end up with any damaged or missing crop, you can miss out on a lot of profit. Crop insurance can keep you financially protected in this sense.
Canna-businesses are particularly vulnerable to theft and fires. Especially if customers smoke near or on your premises (such as a cannabis lounge), a fire can result in you losing valuable stock. Dispensaries can often be an easy target for burglars and petty thieves.
General Liability Insurance For Canna-Businesses
General Liability insurance is crucial for any kind of retail business. It’s especially helpful for cannabis dispensaries and head shops.
This covers a range of problems which can result in legal costs. Statistics show that 90% of US businesses will deal with some form of litigation at some point, so it’s best to cover yourself for potential problems.
For instance, if a customer files a lawsuit due to harm sustained in your store, General Liability can help cover the costs. It also covers you from things like customers raising a case for harm or damages caused by your services. With marijuana only recently legalized, difficult customers may attribute many problems to your business, so make sure you cover yourself for General Liability.
Product Liability Insurance For Canna-Businesses
Product Liability coverage is also vital for cannabis businesses. You’re dealing with a relatively volatile product which can be affected in multiple parts of the growing and retailing process.
For instance, a batch of raw cannabis may be poisoned by pesticides or heavy metals. Not only will you lose out on profits from the whole batch, but you’ll also lose customers, and maybe even have to deal with legal claims.
The same applies to accessories such as vape pens and dab rigs. A small malfunction or a customer misusing them can result in damages to your company. You’ll want Product Liability Insurance in these kinds of cases.
Most of all, many customers might not be used to marijuana. As much as you give warnings and instructions for how to use your products, you may get the blame when they’re overused or misused. You may have to cover medical costs, settlement costs or even legal defense costs. It’s important to have insurance for such situations.
Business Property Insurance For Canna-Businesses
Marijuana businesses will also want Business Property insurance. This can help protect your company building financially, as well as the contents within. It covers things such as buildings, important documents, computers, and loss of income or business interruptions.
If you’re targeted by burglary or even arson, you will lose a lot of valuable crops. The property you’re paying for will also be affected. Business Property insurance also protects against vandalism, so you can feel safe that you don’t suffer too much financial harm by damage to your property.
The contents of your business will also be protected. Dispensaries often keep a lot of sensitive customer data, making them prone to cyber attacks. Protecting your physical and intellectual property is a smart choice. What’s more, a problem like this can cause a huge business interruption, leading to loss of potential profits.
Crop Insurance For Canna-Businesses
While usually associated with farms, Crop Insurance is a must for any cannabis growing operation. It can cover your valuable crops in addition to things like vehicles, equipment, machinery, and property.
A lot can go wrong during the whole cultivation and transportation process. Whether you’re affected by severe weather conditions, vehicle breakdowns or problems with equipment, it’s helpful to have coverage.
Crop insurance agents will also visit your premises so they will know exactly what you need. They can explain your coverage to you in detail and educate you on anything you need to know. This coverage is especially important for any business which deals with the cultivation side of the industry.
How To Insure Your Cannabis Business
If you’re looking for insurance for your cannabis business, it’s important to use a company that understands the unique risks you face. It also helps to deal with an agent with experience in dealing with your industry specifically. You can now find marijuana and cannabis insurance tailored to your needs.
Services like this can provide you with a Dispensary Insurance package that covers everything you require. You can also get insurance quotes for everything from Workers Compensation to General Liability. You’ll be dealing with an insurance firm with tons of experience in the industry, so you can feel safe that your business is protected.
The marijuana industry is growing fast, but it’s far from risk-free. Getting comprehensive cannabis business insurance will give you the peace of mind and protection to ensure your business remains afloat. You can protect yourself from all the general and specific problems you may face as a cannabis retailer, cultivator or manufacturer.