Cannabis Insurance
in Nebraska
Nebraska is not ready to have cannabis legalized. Instead, they find the risk too much for them. So we understand the influxes in the changes in the industry. There are many factors dictating the illegal status of cannabis in Nebraska.
Understanding the Nebraska Cannabis Industry
Despite multiple efforts from the public, Marijuana is illegal in Nebraska as of 2023. The state has some of the strictest laws regarding cannabis in the country. Possession of any cannabis is considered a crime in Nebraska, whether it’s medical or recreational. The amount a person is carrying dictates what punishment, fines, or charges they will face.
Some counties and cities within the state of Nebraska have decriminalized possession of small amounts of cannabis in certain situations.
Possession of one ounce or less is considered a civil offense rather than a misdemeanor, with fines up to $300. But this applies only in the case of a first offense. Any other further offenses will result in a misdemeanor charge which means incarceration and fines of up to $500.
Possession of more than one pound (lb) is considered a felony in Nebraska with fines of up to $10,000 and 5 years in prison. Intent to sell is considered a felony with incarceration ranging from 1 to 50 years in prison, depending on the specific case.
Despite all this, due to the public’s and opposition’s efforts, there is hope that cannabis will soon be legalized in Nebraska, if not recreational than medical.
Overview of Nebraska's Cannabis Market
Since cannabis is illegal in Nebraska, there is no cannabis market. But as of 2019, cultivation and distribution of hemp-derived cannabidiol (CBD) were legalized under the Nebraska Hemp Farming Act. This was only legalized as hemp has low levels of THC, and cannot produce psychoactive sensations that produce a high.
Hemp growers must be licensed by the Nebraska Department of Agriculture and must follow strict rules and regulations regarding the cultivation, harvesting, processing, and distribution of CBD oils.
Nebraska Cannabis Laws and Regulations
There have been a lot of efforts in Nebraska to legalize cannabis. In 2019, there were efforts to legalize medical cannabis.
A bill regarding legalization was proposed and debated by the legislature of Nebraska, but it ultimately failed to pass. Similarly, in 2020, a ballot initiative to legalize marijuana was put forward but was dismissed due to a technicality.
In 2019, hemp farming was legalized under the Nebraska Hemp Farming Act. This act also allowed the sale of CBD oil within the state of Nebraska. The sale of CBD oil with no more than 0.3% is still permitted in licensed stores.
In 2023, Senator Anna Wishart (Democrat) has yet again kickstarted the cannabis movement by putting forward a new bill that proposes the legalization of medical marijuana for patients with certain diseases. This bill also proposes the presence of multiple licensed medical dispensaries within the state for easy access and convenience for patients who have been prescribed medical cannabis by their doctors.
Risks Faced by Cannabis Businesses in Nebraska
As there is no cannabis market in Nebraska, there are no risks as of now. But if cannabis is legalized in the future, Nebraska’s cannabis market will have to face a lot of risks and problems.
The first one is public perception. Due to Nebraska’s conservative nature, people are mostly against the use of cannabis. This is further cemented by the fact that Nebraska’s government is constantly trying to shut down any movements and bills related to cannabis legalization.
The deduction of federal taxes is another drawback. Cannabis firms have significant tax costs since they are not eligible for tax deductions due to the federal government’s illegality of the industry.
Due to the high value of cannabis goods, there’s always a risk of theft when operating a cannabis business, regardless of the state in which the firm is located.
Cannabis banking is also an important issue. Federal law oversees the regulation of banking systems which is why many banks are hesitant to work with cannabis businesses because cannabis is still illegal on a federal level and they could face legal consequences.
Lastly, if cannabis is legalized in Nebraska eventually, the industry will have to follow strict rules and regulatory frameworks developed by the state. This automatically puts cannabis businesses at a disadvantage relative to other industries.
Since cannabis is illegal in Nebraska, there is no cannabis market. But as of 2019, cultivation and distribution of hemp-derived cannabidiol (CBD) were legalized under the Nebraska Hemp Farming Act. This was only legalized as hemp has low levels of THC, and cannot produce psychoactive sensations that produce a high.
Hemp growers must be licensed by the Nebraska Department of Agriculture and must follow strict rules and regulations regarding the cultivation, harvesting, processing, and distribution of CBD oils.
There have been a lot of efforts in Nebraska to legalize cannabis. In 2019, there were efforts to legalize medical cannabis.
A bill regarding legalization was proposed and debated by the legislature of Nebraska, but it ultimately failed to pass. Similarly, in 2020, a ballot initiative to legalize marijuana was put forward but was dismissed due to a technicality.
In 2019, hemp farming was legalized under the Nebraska Hemp Farming Act. This act also allowed the sale of CBD oil within the state of Nebraska. The sale of CBD oil with no more than 0.3% is still permitted in licensed stores.
In 2023, Senator Anna Wishart (Democrat) has yet again kickstarted the cannabis movement by putting forward a new bill that proposes the legalization of medical marijuana for patients with certain diseases. This bill also proposes the presence of multiple licensed medical dispensaries within the state for easy access and convenience for patients who have been prescribed medical cannabis by their doctors.
As there is no cannabis market in Nebraska, there are no risks as of now. But if cannabis is legalized in the future, Nebraska’s cannabis market will have to face a lot of risks and problems.
The first one is public perception. Due to Nebraska’s conservative nature, people are mostly against the use of cannabis. This is further cemented by the fact that Nebraska’s government is constantly trying to shut down any movements and bills related to cannabis legalization.
The deduction of federal taxes is another drawback. Cannabis firms have significant tax costs since they are not eligible for tax deductions due to the federal government’s illegality of the industry.
Due to the high value of cannabis goods, there’s always a risk of theft when operating a cannabis business, regardless of the state in which the firm is located.
Cannabis banking is also an important issue. Federal law oversees the regulation of banking systems which is why many banks are hesitant to work with cannabis businesses because cannabis is still illegal on a federal level and they could face legal consequences.
Lastly, if cannabis is legalized in Nebraska eventually, the industry will have to follow strict rules and regulatory frameworks developed by the state. This automatically puts cannabis businesses at a disadvantage relative to other industries.
Types of Cannabis Insurance Coverage in Nebraska
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 Nebraska
Since cannabis businesses depend on the cultivation of cannabis and harvests, operating one involves a number of tasks that may be of an environmental, consumer, or general nature. This is why it is essential to select the best cannabis insurance.
Nebraska will run against many new policies and procedures when it becomes a cannabis-regulated state. It will need attention so that the businesses are interested in mitigating risks and concerns before jumping into this state’s requirements long term.
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 Nebraska Businesses
AlphaRoot is licensed to provide cannabis insurance coverage throughout Nebraska , 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.
Due to cannabis being illegal in Nebraska, you can’t open a dispensary in the state. However, if you’re running a business, the state requires you to get workers’ compensation insurance and commercial auto insurance.
Nebraska’s minimum auto liability insurance is $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, and $25,000 property damage liability per accident.
- 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 Nebraska
Cannabis Insurance in Nebraska
Frequently Asked Questions
Cannabis insurance safeguards your company from potential hazards involved with growing, cultivating, and selling your products. Similar to other types of insurance, the coverage and plans are based on the size of the cannabis business you want to cover as well as the state’s legal requirements.
When it comes to the specific risks that cannabis insurance might protect against, they include any unanticipated occurrences like fires, natural disasters, product liability, property damage, workers’ compensation, and theft.
Your coverage may also protect you from hazards like financial or consumer information breaches due to cyberattacks. This hazard is an often overlooked advantage of cannabis insurance.
The cost of cannabis insurance varies depending on your plan’s level of coverage, the size of your company, where it’s located, and other risks associated with operations that may or may not be specific to your region.
Consequently, cannabis insurance policies can cost anything from a few hundred to tens of thousands of dollars. As cannabis businesses are exposed to a wide range of dangers, cannabis insurance may cost a little more than other business insurance policies.
Since cannabis is illegal in Nebraska, there is no cannabis industry in Nebraska. Other businesses are required to insure themselves, which is why it is likely that the future cannabis market of Nebraska will be required to do the same.
You must get in touch with your insurance agent right away if you experience a loss or damage that is covered by your cannabis insurance policy. Be prepared to offer all pertinent information, including the incident’s date, time, place, necessary paperwork, and supporting documentation.
You must also gather the necessary documentation, as well as any photographic or video evidence, as specified in your insurance policy. A thorough and impartial investigation of the incident will be accomplished by your cooperation with the insurance agent.
Once the insurance company has evaluated and examined the claim, a settlement offer will be made. To make sure the offer is adequate and reasonable, review it and consult with an insurance agent.