Cannabis Insurance
in Louisiana
There is only one discrepancy in each of the nine regions of Louisiana. There is no growing allowance as well for residents. Navigating the medical cannabis industry in this state can have complications, but we have helped explain the nature of the business and the successes of insuring your business from risks.
Understanding the Louisiana Cannabis Industry
In 1978, medicinal cannabis usage was legalized for patients with glaucoma and cancer. However, there was little follow through and no actual cannabis facilities were provided to patients.
In 2015, an initiative was passed to set up the framework for cannabis provision in the state but it wasn’t until 2019 that the state finally started its sale of marijuana to qualified patients.
Overview of Louisiana's Cannabis Market
Due to the high demand and growth in the cannabis industry, the US cannabis market is projected to grow from $28 Billion in 2021 to $197.7 Billion in 2028. In Louisiana, cannabis sales are projected to reach $330 million to $400 million by 2025.
New legislation introduced in 2019, has allowed the state to overcome challenges in its cannabis industry such as low patient counts and limited retail locations. With the availability of cannabis flowers for patients as of 2021, sales are expected to skyrocket and the cannabis market in Louisiana will grow further.
Louisiana has nine official licensed retailers in the state, with districts allotted to each retailer. Under the 2019 legislation, the retailers will be able to open additional dispensaries after meeting specific patient counts.
Louisiana Cannabis Laws and Regulations
Louisiana has legalized the use of cannabis for medical reasons, however, the use of marijuana for recreational purposes is still illegal and is punishable by law.
Under Louisiana law, contractors are permitted to cultivate, extract process, produce, and transport therapeutic marijuana in compliance with state regulations.
Patients that want to use cannabis must receive a recommendation from a qualified cannabis physician, and the use of marijuana without a recommendation is illegal. Consumption of the weed is illegal in public places, and can only take place on private property.
The possession of marijuana without a license or for recreational purposes is illegal. First offenders possessing more than 14 grams of marijuana can receive a fine of $500 and/or a prison sentence of up to six months. However, all second convictions for a large amount of cannabis have more strict sentences.
The possession of fewer than 14 grams of cannabis was decriminalized in 2015, and first-time offenses would receive a maximum fine of $100.
Risks Faced by Cannabis Businesses in Louisiana
Cannabis businesses in Louisiana face several risks due to the nature of the cannabis industry. Marijuana Dispensaries face security risks and product liability risks that can severely affect the business.
With the strict laws and regulations concerning the possession of sale of marijuana in Louisiana, businesses may face legal risks such as sale to unauthorized customers, and legal action if the cannabis content sold does not match state regulations.
Moreover, since the cannabis laws in Louisiana can change depending on the county or city, with many cities banning or decriminalizing marijuana, cannabis businesses can risk non-compliance with state and city laws if they are unaware of any changes.
Due to the high demand and growth in the cannabis industry, the US cannabis market is projected to grow from $28 Billion in 2021 to $197.7 Billion in 2028. In Louisiana, cannabis sales are projected to reach $330 million to $400 million by 2025.
New legislation introduced in 2019, has allowed the state to overcome challenges in its cannabis industry such as low patient counts and limited retail locations. With the availability of cannabis flowers for patients as of 2021, sales are expected to skyrocket and the cannabis market in Louisiana will grow further.
Louisiana has nine official licensed retailers in the state, with districts allotted to each retailer. Under the 2019 legislation, the retailers will be able to open additional dispensaries after meeting specific patient counts.
Louisiana has legalized the use of cannabis for medical reasons, however, the use of marijuana for recreational purposes is still illegal and is punishable by law.
Under Louisiana law, contractors are permitted to cultivate, extract process, produce, and transport therapeutic marijuana in compliance with state regulations.
Patients that want to use cannabis must receive a recommendation from a qualified cannabis physician, and the use of marijuana without a recommendation is illegal. Consumption of the weed is illegal in public places, and can only take place on private property.
The possession of marijuana without a license or for recreational purposes is illegal. First offenders possessing more than 14 grams of marijuana can receive a fine of $500 and/or a prison sentence of up to six months. However, all second convictions for a large amount of cannabis have more strict sentences.
The possession of fewer than 14 grams of cannabis was decriminalized in 2015, and first-time offenses would receive a maximum fine of $100.
Cannabis businesses in Louisiana face several risks due to the nature of the cannabis industry. Marijuana Dispensaries face security risks and product liability risks that can severely affect the business.
With the strict laws and regulations concerning the possession of sale of marijuana in Louisiana, businesses may face legal risks such as sale to unauthorized customers, and legal action if the cannabis content sold does not match state regulations.
Moreover, since the cannabis laws in Louisiana can change depending on the county or city, with many cities banning or decriminalizing marijuana, cannabis businesses can risk non-compliance with state and city laws if they are unaware of any changes.
Types of Cannabis Insurance Coverage in Louisiana
There is a wide variety of plans to choose from when it comes to you and your business. Some of these include:
Dispensary Insurance
Several risks specific to cannabis dispensaries can significantly affect the operations, due to which the state may require you to get comprehensive insurance coverage before issuing you a valid cannabis dispensary license.
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.
D&O Insurance
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.
Workers’ Compensation Insurance
Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. Workers compensation policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.
Several risks specific to cannabis dispensaries can significantly affect the operations, due to which the state may require you to get comprehensive insurance coverage before issuing you a valid cannabis dispensary license.
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.
Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. Workers compensation policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.
Choosing the Right Cannabis Insurance Policy in Louisiana
Cannabis has helped your state’s residents through their medical ailments using a medicine that is not federally recognized. Cannabis insurance works to reduce these risks. We know your particular needs from general liability, employee, or even cultivators insurance.
Working with an Experienced Cannabis Insurance Broker
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.
Factors to Consider When Choosing Cannabis Insurance
An insurance broker is responsible for different tasks. Hiring the wrong cannabis insurance broker will waste both your time and money. The right cannabis insurance broker will understand your values and bring the right solution to you. When looking for a reliable broker, there are some essential things to consider.
- familiarity with this fluctuating cannabis industry.
- Do they offer risk management resources?
- Know their broker expertise.
- How many insurance carriers do they carry
- Can the broker analyze your contracts and advise you?
- You can add or ask for other things depending on your business’s status.
Common Mistakes to Avoid When Buying Cannabis Insurance
They don't purchase insurance at all
One of the biggest mistakes cannabis business owners are making is not having a policy at all. While the wrong policy is problematic, not having any coverage can be devastating to a new or even an established business. Investing in insurance covers the unforeseen and mitigates risk.
They don’t purchase cannabis specific insurance
Cannabis insurance is a very specialized niche in the insurance industry. Not all insurance agents/brokers have specific knowledge about the risks in the cannabis industry. Insuring cannabis is not like insuring your house or automobile strictly because of the nature of what you’re trying to insure and how it’s viewed by the government. If you don’t have a policy that is specific to cannabis, there may be certain exclusions based on the Schedule I status of cannabis or illegal substances.
They don’t work closely enough with a cannabis insurance specialist
Working closely with someone that knows the cannabis insurance industry is critical when choosing a policy. Cannabis business owners have to ask their agents/brokers questions, lots of questions and the broker/agent needs to be able to answer those questions.
Cultivators fail to buy crop insurance
If you are a cultivator or a grower, you rely on your cannabis crop for your income. Cannabis is agriculture, just like corn, wheat, or soy. Cultivators have to protect their income; therefore, they must have cannabis insurance and, specifically, crop insurance. Every year, wildfires ravage thousands of acres of land and crops, resulting in millions of dollars of losses for cultivators.
They don’t know what's included in their policy
As a cannabis business owner, knowledge is power. You have to be aware of the changing laws at the federal, state, and local level. You also need to know your business inside and out. Part of knowing your business is understanding what is and is not in your insurance policy. You have to know what is covered and what is excluded. There are many cannabis specific exclusions that are often overlooked. https://www.s2sinsure.com/post/cannabis-insurance-top-5-mistakes-to-avoid
Benefits of Cannabis Insurance for Louisiana Businesses
AlphaRoot is licensed to provide cannabis insurance coverage throughout Louisiana, not to mention across the entire US.
AlphaRoot is not in the insurance business. We’re in the business of guiding cannabis companies through the unique risks of our industry. It’s why we don’t merely broker insurance, we curate powerful cannabis risk management solutions.
Insurers looking to provide commercial cannabis insurance to this budding market should understand its rapidly shifting landscape. They must contend with legal uncertainty, evolving regulations, lack of data, and developing business practices. Insurers will also need to understand how the cannabis industry’s first and third‐party coverage needs are unique from other industries.
Louisiana has no legal insurance requirements for cannabis businesses. However, due to the nature of the industry and the added risks associated with running a cannabis business, it’s recommended to find a cannabis specific insurance policy to mitigate your risks.
- MSO’s
- Dispensaries
- Lab Testing
- Cultivation
- Investment Funds
- Manufacturing
- Distribution
- Technology
- Psychedelics
- Brands Service
- Providers
Cannabis Businesses
That May Need Insurance
Getting a Quote for Cannabis Insurance in Louisiana
Cannabis Insurance in Louisiana
Frequently Asked Questions
Cannabis insurance coverage can depend on what your business requirements are as well as the insurance requirements of each state. In general, cannabis insurance will cover general liability, product liability, property liability, and compensation for employees. If there’s any risk related to cannabis, you’ll find coverage offered by a cannabis-specific insurance company.
There isn’t a fixed cost for cannabis insurance, as the amount varies depending on the policy you choose and the amount of coverage you opt for.
Your expenses can range anywhere from a few hundred dollars to tens of thousands of dollars depending on the size and scale of your operations and your insurance plan. Cannabis insurance can also be priced higher than other businesses due to the inherent risks associated with the cannabis industry.
Cannabis insurance is not required by law in Louisiana. However, it is recommended that you get a cannabis-specific insurance policy to help mitigate the risks of running your business. These can include general liability, theft, or property damage.
You can file a cannabis claim like any other insurance claim. You need to contact your cannabis insurance provider to report a claim. Your claim will then be filed and validated depending on the proof you have regarding the incident.
It’s always necessary to check out your insurance coverage policy to see if the claim is covered by your insurance company.