Cannabis Insurance
in Montana
Compared to other states, Montana has less strict laws as long as you use the products responsibly in public. Possessing up to one ounce of cannabis products is now legal in Montana. However, there are always unknown risks when venturing into new opportunities. For instance, in today’s ever-evolving landscape at both the federal and state levels, staying on top of the regulations to keep a profitable cannabis business running is our top priority.
Understanding the Montana Cannabis Industry
On November 3, 2020, Montana became the next state to legalize recreational cannabis use with the passing of Initiative 190. This milestone follows the state’s 2004 medical marijuana program, allowing more Montanans to access the benefits of cannabis.
The Montana Department of Revenue estimates that recreational cannabis sales will begin in 2022 once the necessary regulatory processes are completed. This is a major step forward in the state’s efforts to create a safe and accessible cannabis market for Montanans.
Overview of Montana's Cannabis Market
As of 2021, Montana’s legal cannabis industry is still in its infancy – but the potential for growth is undeniable. According to a report by the Marijuana Policy Group, the state’s legal cannabis market has the potential to generate up to $236 million in annual sales by 2026, with an estimated $43 million in tax revenue for the state. With recreational sales expected to begin in 2022, Montana is well-positioned to become a leader in the cannabis industry as it continues to develop.
The Montana Department of Revenue reported that overall Cannabis sales equal $353,040,478, and the tax revenue is 53,866,896.
Montana Cannabis Laws and Regulations
Montana has had a tumultuous relationship with cannabis laws and regulations, particularly when it comes to its medical marijuana program and the recent legalization of recreational use.
Here are some key milestones in the state’s cannabis history:
- 2004: Montana voters passed a ballot initiative to legalize medical marijuana for those with qualifying medical conditions.
- 2011: The Montana legislature attempted to repeal the medical marijuana program, but then-governor Brian Schweitzer vetoed the bill.
- 2019: Recreational cannabis use was legalized in Montana, giving adults 21+ the right to buy, possess, and consume cannabis products.
- 2020: Montana’s medical marijuana program was re-instated, giving registered patients access to cannabis products for medicinal use.
Risks Faced by Cannabis Businesses in Montana
Risks faced by Cannabis Businesses in Montana include:
- Under federal law, cannabis remains illegal despite its legalization at the state level in Montana. This poses a serious risk of federal intervention in the industry, which could result in hefty legal penalties and even the potential shutdown of cannabis businesses.
- Cannabis businesses in Montana must comply with an intricate set of state regulations to remain compliant and legally operate. These regulations include licensing, testing, and packaging and labeling requirements. Not meeting these regulations will result in severe financial repercussions, such as fines or the revocation of a business license.
- As more states legalize cannabis, competition in the market is intensifying. With more companies vying for a share of the market, businesses must stay ahead of the curve to succeed.
As of 2021, Montana’s legal cannabis industry is still in its infancy – but the potential for growth is undeniable. According to a report by the Marijuana Policy Group, the state’s legal cannabis market has the potential to generate up to $236 million in annual sales by 2026, with an estimated $43 million in tax revenue for the state. With recreational sales expected to begin in 2022, Montana is well-positioned to become a leader in the cannabis industry as it continues to develop.
The Montana Department of Revenue reported that overall Cannabis sales equal $353,040,478, and the tax revenue is 53,866,896.
Montana has had a tumultuous relationship with cannabis laws and regulations, particularly when it comes to its medical marijuana program and the recent legalization of recreational use.
Here are some key milestones in the state’s cannabis history:
- 2004: Montana voters passed a ballot initiative to legalize medical marijuana for those with qualifying medical conditions.
- 2011: The Montana legislature attempted to repeal the medical marijuana program, but then-governor Brian Schweitzer vetoed the bill.
- 2019: Recreational cannabis use was legalized in Montana, giving adults 21+ the right to buy, possess, and consume cannabis products.
- 2020: Montana’s medical marijuana program was re-instated, giving registered patients access to cannabis products for medicinal use.
Risks faced by Cannabis Businesses in Montana include:
- Under federal law, cannabis remains illegal despite its legalization at the state level in Montana. This poses a serious risk of federal intervention in the industry, which could result in hefty legal penalties and even the potential shutdown of cannabis businesses.
- Cannabis businesses in Montana must comply with an intricate set of state regulations to remain compliant and legally operate. These regulations include licensing, testing, and packaging and labeling requirements. Not meeting these regulations will result in severe financial repercussions, such as fines or the revocation of a business license.
- As more states legalize cannabis, competition in the market is intensifying. With more companies vying for a share of the market, businesses must stay ahead of the curve to succeed.
Types of Cannabis Insurance Coverage in Arizona
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. This 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. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly
Choosing the Right Cannabis Insurance Policy in Montana
Cannabis insurance is essential for mitigating the operational risks associated with your business, from growing to selling and everything in between. To maximize long-term success, it’s important to work with a partner who understands your business, its specific needs, and can help you achieve your goals for longevity. We specialize in cannabis insurance, offering tailored solutions to help you protect your ROI, tenure, and profit line while still allowing you to focus on growing your business. Let us help you secure a safe, secure future for your cannabis business.
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 Arizona Businesses
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.
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.
As a cannabis business in Montana, you may be required to carry certain types of insurance coverage for protection against liability. These include:
- General Liability Insurance: This coverage provides protection against claims of bodily injury, property damage, and personal injury resulting from your business operations.
- Product Liability Insurance: This coverage provides protection in the event that a product you sell causes injury or damage to a customer.
- Workers’ Compensation Insurance: This coverage provides protection for your employees should they be injured or become ill as a result of their work for your business.
- 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 Montana
Cannabis Insurance in Montana
Frequently Asked Questions
Cannabis insurance is designed to protect businesses operating in the cannabis industry from the unique risks they face.
Coverage may vary depending on the type of policy and insurance provider but typically includes protection from property damage, liability, product liability, crop loss, business interruption, and employee dishonesty.
Cannabis insurance is an essential risk management tool for businesses operating in the cannabis industry, providing financial protection from the potential risks associated with their operations.
With cannabis insurance, you can rest assured that your business is covered for the risks that are specific to the cannabis industry.
The cost of cannabis insurance in Montana can vary greatly depending on several key factors.
These can include the type and amount of coverage needed, the size of the business or operation, the location, and the insurer’s experience.
To ensure you get the best rate and coverage, it’s essential to work with an experienced insurance provider who can help you assess the particular risks associated with your business or operation and find the most competitive cannabis insurance in Montana.
Cannabis businesses in Montana must comply with certain legal requirements and regulations that may require them to carry certain types of insurance coverage. For instance, Montana law mandates that cannabis businesses hold general liability insurance with per occurrence limits of at least $300,000 and an aggregate limit of $500,000.
Similarly, business owners must have product liability insurance with per occurrence limits of at least $1 million and an aggregate limit of $2 million.
Lastly, if a cannabis business has employees, it must have workers’ compensation insurance to protect them in case of work-related injuries or illnesses.
Although cannabis insurance is not legally required in Montana, these mandated insurance policies are essential for businesses to remain compliant and safe.
Filing a cannabis insurance claim in Montana doesn’t have to be complicated. With the right information and guidance, you can get your claim processed quickly and easily. Here are the general steps involved in filing a cannabis insurance claim in Montana:
- Notify Your Insurance Provider
- Provide Information
- Work with Your Insurance Provider
- Submit a Claim
- Receive Payment