Cannabis Insurance

Recreational
No Cannabis Program
Medical Only

Why You Need Cannabis Insurance

Cannabis insurance protects plant and non plant touching business operations against several types of risks that are often unavoidable. Enabling your business to manage risk that may interfere with your operations is critical. Risks such as Product Liability, Property Damage and Theft, and Employee Injuries are some common risks that companies face. Our insurance experts can help you do that.

Types of Cannabis Insurance

There is a wide variety of plans to choose from when it comes to you and your business. Some of these include:

General Liability

General liability offers broad protection against some of the most fundamental risks cannabis companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.

Product Liability Insurance

Cannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.

Property Insurance

Property Insurance is a first-party insurance policy, reimbursing cannabis companies for direct property loss (i.e., vandalism, fire, or natural disaster). This policy covers real property, business personal property, and cannabis inventory.

Directors & Officers

Shareholders, competitors, investors, etc., can sue a cannabis company’s executives, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.

Professional Liability Insurance

Cannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.

Workers’ Compensation Insurance

Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.

Crop Insurance

Crop coverage provides the protection from damages or losses of growing cannabis crop, harvested plants and finished stock.

Cyber Liability

Our Cannabis Cyber Insurance protects companies from third-party lawsuits relating to electronic activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.

General liability offers broad protection against some of the most fundamental risks cannabis companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.

Cannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.

Property Insurance is a first-party insurance policy, reimbursing cannabis companies for direct property loss (i.e., vandalism, fire, or natural disaster). This policy covers real property, business personal property, and cannabis inventory.

Shareholders, competitors, investors, etc., can sue a cannabis company’s executives, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.

Cannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.

Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.

Crop coverage provides the protection from damages or losses of growing cannabis crop, harvested plants and finished stock.

Our Cannabis Cyber Insurance protects companies from third-party lawsuits relating to electronic activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.

Cannabis Businesses That May Need Insurance

There is a wide variety of plans to choose from when it comes to you and your business. Some of these include:

may-need-insurance-img cannabis businesses that may need Insurance

Cannabis Verticals that Need Insurance

MSO’s

Multi-state operators (MSO) represent a single brand while evolving across state lines and into other verticals.Whether through investment or M&A activity, MSOs are multiplying, despite the slow pace of federal legislation.

Dispensaries

Dispensaries have similar exposures to any retail location; however, property coverage is the main differentiator. Since regulators legalized recreational use, the storefront has been the traditional means of reaching consumers.

Cultivation

Cultivators are a critical part of the cannabis industry, providing products for themselves and other enterprises. Even with their hands working the ground, cultivators must obtain and maintain a license issued by a state where cannabis, CBD, or hemp is legal to grow.

Laboratory

Like other testing facilities, cannabis labs are held to a high standard, primarily because of the many new products rolling out. Laws and regulations are ever-changing, making it challenging for cannabis labs to maintain compliance. 

Manufacturing

Both cannabis manufacturing and cannabis extraction are tasked with transforming the pure crop into a consumable alternative. Manufacturers face unique exposures that other cannabusiness don’t, increasing their risk profile and importance to the industry.

Distribution

Cannabis distribution companies play a unique role delivering products from growers to business consumers, such as brands or retailers.  Companies must navigate transportation challenges while safeguarding those involved and their hard-earned capital.

Delivery Service Providers

Delivery services in the cannabis industry connect consumers with products directly, navigating complex regulations to ensure compliance and safety in transportation and delivery.

Extraction

Cannabis extraction companies specialize in producing concentrates and oils, facing stringent safety and quality regulations to isolate compounds like THC and CBD.

Event

Cannabis events, such as expos and conferences, provide networking and educational opportunities, requiring adherence to local laws on cannabis use and sales.

CBD

The CBD sector, focusing on therapeutic products from cannabis and hemp, operates under diverse regulations affecting product labeling, marketing, and THC content.

Hemp

Hemp cultivation focuses on industrial and therapeutic products with low THC levels, subject to agricultural and product standards distinct from those for cannabis.

Multi-state operators (MSO) represent a single brand while evolving across state lines and into other verticals.Whether through investment or M&A activity, MSOs are multiplying, despite the slow pace of federal legislation.

Dispensaries have similar exposures to any retail location; however, property coverage is the main differentiator. Since regulators legalized recreational use, the storefront has been the traditional means of reaching consumers.

Cultivators are a critical part of the cannabis industry, providing products for themselves and other enterprises. Even with their hands working the ground, cultivators must obtain and maintain a license issued by a state where cannabis, CBD, or hemp is legal to grow.

Like other testing facilities, cannabis labs are held to a high standard, primarily because of the many new products rolling out. Laws and regulations are ever-changing, making it challenging for cannabis labs to maintain compliance. 

Both cannabis manufacturing and cannabis extraction are tasked with transforming the pure crop into a consumable alternative. Manufacturers face unique exposures that other cannabusiness don’t, increasing their risk profile and importance to the industry.

Cannabis distribution companies play a unique role delivering products from growers to business consumers, such as brands or retailers.  Companies must navigate transportation challenges while safeguarding those involved and their hard-earned capital.

Delivery services in the cannabis industry connect consumers with products directly, navigating complex regulations to ensure compliance and safety in transportation and delivery.

Cannabis extraction companies specialize in producing concentrates and oils, facing stringent safety and quality regulations to isolate compounds like THC and CBD.

Cannabis events, such as expos and conferences, provide networking and educational opportunities, requiring adherence to local laws on cannabis use and sales.

The CBD sector, focusing on therapeutic products from cannabis and hemp, operates under diverse regulations affecting product labeling, marketing, and THC content.

Hemp cultivation focuses on industrial and therapeutic products with low THC levels, subject to agricultural and product standards distinct from those for cannabis.

Learn about Cannabis Insurance in each State

State Laws

Cannabis Insurance by State

Each individual State governs whether cannabis is legal or illegal. States can issue operational licenses, make certain types of insurance a requirement, and choose the amount of cannabis businesses to operate in their state. Even in states where they are legal, cities and counties can prohibit cannabis businesses. They may also have their own laws and insurance requirements for the industry. It is important to note that each state has its own insurance and licensing requirements for businesses, and penalties for breaches. Check your state’s laws and requirements or view our recommended policies for cannabis businesses.

Impact of State Laws on Cannabis Insurance

Cannabis today remains illegal at the federal level. However, throughout many states in the US progress is moving forward at a state level to change laws and with that insurance practices. Most states allow medical use of cannabis, and an increasing number of states allow recreational use.

Cannabis Insurance Brokers

Cannabis Insurance Brokers

Who is AlphaRoot

AlphaRoot is a full service insurance brokerage that focuses exclusively in the cannabis, hemp, CBD, holistic medicine and psychedelic industries. We work with companies across the entire supply chain, from seed to sale, as well as, ancillary and capital providers. Our team is heavily invested in these industries and our goal is to help companies scale to propel them forward by providing the best service and insurance products possible.


Benefits of Working with a Cannabis Insurance Broker

The expertise provided by AlphaRoot is more than just about insurance policies. The team’s experience focuses on specific types of cannabis insurance, but also risk management for small, medium and large companies.

AlphaRoot helps companies to get the right insurance for their businesses. AlphaRoot helps save you time and gives the best insurance advice at every step to help you get the best premium possible through accurate policy comparisons with access to a wide range of insurance options and claim assistance to help your business manage its risk.

Costs of Cannabis Insurance

Factors Affecting Premiums

Insuring cannabis companies involves a complex application process no matter where you are in the US. Even as states go legal it can be challenging to find insurance coverage. This is usually due to the varying multitude levels of risk companies must adhere to on a state by state basis.


Ways to Reduce Insurance Costs

Cannabis insurance costs are higher than in other industries because of the risks associated with the product and its status as a schedule one controlled substance. There are multiple types to consider and each one of these has its own coverage and cost which are dependent on your unique situation and business model.


Cannabis Insurance News

Kentucky Senate Passes Medical Marijuana Legalization Bill

Cannabis insurance costs are higher than in other industries because of the risks associated with the product and its status as a schedule one controlled substance. There are multiple types to consider and each one of these has its own coverage and cost which are dependent on your unique situation and business model.

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NY’s cannabis regulators sued again, this time by the big players

A coalition that includes some of New York’s medical cannabis companies is asking a judge to compel state regulators to open up licensing for all retail dispensary applicants immediately.

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California Operators experiencing increased price compression

California bureaucrats began constructing a vision to expand the state’s legal cannabis market and redress the harms of prohibition on the heels of Proposition 64’s passage in 2016, it was music to John Casali’s ears. He’d been waiting for this moment for a long time.

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New Hampshire House approves bill that legalizes cannabis with few regulations

The New Hampshire House of Representatives approved legislation Thursday that legalizes marijuana with hardly any regulations or restrictions.

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Cannabis FAQ Insurance

Cannabis insurance refers to specialized insurance policies designed to cover the unique risks faced by businesses in the cannabis industry. These policies provide coverage for property damage, theft, liability, product recalls, and other risks specific to cannabis cultivation, processing, distribution, and retail operations. With the legalization of cannabis in many states and countries, more businesses are entering the industry, and cannabis insurance has become increasingly important for mitigating risks and protecting investments. However, due to the complexity of the cannabis industry and the legal landscape, finding and obtaining appropriate coverage can be challenging, requiring specialized knowledge and expertise from insurance providers.

Cannabis is legal in some form in 38 states and D.C. Cannabis operations like dispensaries and cultivators face several risks that are industry specific. Examples of these are thefts, fires and lawsuits. Another example might be a customer claiming your product made them sick and as a result sue your dispensary. D&O, Health & Benefits are two of the several insurance products offered by AlphaRoot.

Each individual state has its own laws and regulations for how cannabis businesses can operate and the coverage that is needed as a result. Every state decides if cannabis is legal and issues licenses, sets minimum requirements for insurance and even sets the number for how many cannabis businesses can operate.