Cannabis Insurance
in Oklahoma
Unlike other states with medical programs, the regulations on medical cannabis offerings are at the discretion of the doctor. Protecting your cannabis business when the distribution has fewer specific rules on the consumer side means ensuring the risks are critical long term.
Understanding the Oklahoma Cannabis Industry
Like many other states in the south, recreational cannabis is illegal in Oklahoma. However, medical cannabis was legalized in 2018. Medical marijuana distribution and consumption are regulated by the Oklahoma medical marijuana authority (OMMA)
There’s no list of diseases or conditions that qualify patients for the purchase and consumption of medical marijuana. Instead, the decision to recommend medical cannabis falls on the patient’s physician.
There are multiple state-licensed dispensaries located in the state, and home cultivation is also allowed. Any person who is eligible for cannabis therapy can get a medical marijuana card from OMMA.
Possession of recreational cannabis is a criminal offense. Possession of any amount of cannabis will result in a misdemeanor charge, with fines of up to $1000 and incarceration of up to 1 year.
Possession with the intent of sale and distribution is considered a felony, with heavy fines and prison time ranging from 2 years to life. It is evident by these heavy fines and sentences that cannabis is strictly regulated and illegal in Oklahoma.
Overview of Oklahoma's Cannabis Market
Since recreational marijuana is illegal, Oklahoma just has a medical marijuana industry. The medical cannabis market is huge, with more than 2300 dispensaries spread across the state. There are more than 400 dispensaries in Oklahoma City alone.
There are 368,023 registered medical cannabis users, and this number is growing day by day. This market generated $945 million in 2022. The state has also earned millions from the 7% excise tax applicable on the purchase of all medical cannabis products.
Since just the medical cannabis market is doing so well, it is evident that a recreational one will perform even better, taking the annual revenue into billions of dollars.
Oklahoma Cannabis Laws and Regulations
The biggest milestone Oklahoma achieved regarding the legalization of cannabis was in 2018. A vote took place which legalized the sale and consumption of medical marijuana under the State Question 788. This law developed a regulatory framework for the cultivation, processing, and distribution of medical cannabis. A regulatory body called Oklahoma Medical Marijuana Authority oversees all of the aforementioned operations.
In 2019, House Bill 2612 was passed, which made multiple changes to the state’s medical marijuana program. Rules regarding licensing, testing, and labeling of products were clarified. Cultivated marijuana’s diversion towards the black market was also stopped using a new framework.
In 2020, voters came close to legalizing recreational marijuana with the approval of State Question 807. This bill was, however, invalidated by the Oklahoma supreme court due to technical errors.
In 2020, House Bill 2272 was passed, which made further amendments and changes to the medical program. In 2023, Oklahoma voters voted against a ballot initiative to legalize recreational cannabis, despite the presence of a fast-growing medical cannabis market.
Risks Faced by Cannabis Businesses in Oklahoma
Oklahoma has a big medical cannabis industry, where it’s more affordable than other states to get started. However, cannabis businesses still face a couple of risks operating in Oklahoma.
Many banks are hesitant to work with cannabis businesses because cannabis is still illegal on a federal level and banks could face legal difficulties because of this. This reduces the potential for maximum growth for the industry and puts Oklahoma’s cannabis business at risk.
Since there is a strict framework cannabis businesses have to follow, they may face supply chain and transportation problems. To allow easy transportation, the state gives transporter agent licenses, which would enable suppliers to navigate legally.
The deduction of federal taxes is another drawback. Cannabis firms face higher tax costs since they are not eligible for tax deductions due to the federal government’s prohibition of cannabis.
Due to the high value of cannabis goods, there is always a risk of theft when operating a cannabis business, regardless of the state in which the firm is located. Robberies and break-ins have reportedly occurred in other states.
Oklahoma also has some of the strictest laws and regulations regarding cannabis. All operational medical cannabis businesses have to comply with strict rules and follow a specific framework. This puts hurdles in the way of the industry from reaching its full potential.
Since recreational marijuana is illegal, Oklahoma just has a medical marijuana industry. The medical cannabis market is huge, with more than 2300 dispensaries spread across the state. There are more than 400 dispensaries in Oklahoma City alone.
There are 368,023 registered medical cannabis users, and this number is growing day by day. This market generated $945 million in 2022. The state has also earned millions from the 7% excise tax applicable on the purchase of all medical cannabis products.
Since just the medical cannabis market is doing so well, it is evident that a recreational one will perform even better, taking the annual revenue into billions of dollars.
The biggest milestone Oklahoma achieved regarding the legalization of cannabis was in 2018. A vote took place which legalized the sale and consumption of medical marijuana under the State Question 788. This law developed a regulatory framework for the cultivation, processing, and distribution of medical cannabis. A regulatory body called Oklahoma Medical Marijuana Authority oversees all of the aforementioned operations.
In 2019, House Bill 2612 was passed, which made multiple changes to the state’s medical marijuana program. Rules regarding licensing, testing, and labeling of products were clarified. Cultivated marijuana’s diversion towards the black market was also stopped using a new framework.
In 2020, voters came close to legalizing recreational marijuana with the approval of State Question 807. This bill was, however, invalidated by the Oklahoma supreme court due to technical errors.
In 2020, House Bill 2272 was passed, which made further amendments and changes to the medical program. In 2023, Oklahoma voters voted against a ballot initiative to legalize recreational cannabis, despite the presence of a fast-growing medical cannabis market.
Oklahoma has a big medical cannabis industry, where it’s more affordable than other states to get started. However, cannabis businesses still face a couple of risks operating in Oklahoma.
Many banks are hesitant to work with cannabis businesses because cannabis is still illegal on a federal level and banks could face legal difficulties because of this. This reduces the potential for maximum growth for the industry and puts Oklahoma’s cannabis business at risk.
Since there is a strict framework cannabis businesses have to follow, they may face supply chain and transportation problems. To allow easy transportation, the state gives transporter agent licenses, which would enable suppliers to navigate legally.
The deduction of federal taxes is another drawback. Cannabis firms face higher tax costs since they are not eligible for tax deductions due to the federal government’s prohibition of cannabis.
Due to the high value of cannabis goods, there is always a risk of theft when operating a cannabis business, regardless of the state in which the firm is located. Robberies and break-ins have reportedly occurred in other states.
Oklahoma also has some of the strictest laws and regulations regarding cannabis. All operational medical cannabis businesses have to comply with strict rules and follow a specific framework. This puts hurdles in the way of the industry from reaching its full potential.
Types of Cannabis Insurance Coverage in Oklahoma
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 Oklahoma
Protecting any business has risks. Partnering with a professional who knows your industry’s different concerns means your company has a secure foundation. Cannabis insurance works to mitigate these risks, enabling companies to stay on the path to profitability.
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 Oklahoma Businesses
AlphaRoot is licensed to provide cannabis insurance coverage throughout Oklahoma , 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.
Like many other states, Oklahoma also requires all businesses to have workers’ compensation and commercial auto insurance for business vehicles. The minimum requirements for auto-liability are $25,000 for bodily injury liability per person, $50,000 for bodily injury liability per accident, and $25,000 for property damage liability per accident.
If you want to open a medical cannabis dispensary in Oklahoma, you will have to pay a non-refundable fee of $2500, which is annually renewable.
Other smaller fees are also included in the application process. The state also requires an initial investment between $80,000 to $140,000. In addition, monthly costs ranging between $30,000 to $40,000 are also required.
- 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 Oklahoma
Cannabis Insurance in Oklahoma
Frequently Asked Questions
Cannabis insurance shields your business from the dangers involved with growing, cultivating, and selling the goods you produce. 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 exact risks that cannabis insurance might protect against, they include any unforeseen events like fires, natural disasters, product liability, property damage, workers’ compensation, and theft. It is possible that your policy might also protect you from dangers like financial or consumer information breaches due to cyberattacks.
The cost of cannabis insurance varies depending on your plan’s extent of coverage, the size of your company, its location, and other hazards associated with activities that may or may not be unique to your region.
Accordingly, 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 risks, it is important to know that cannabis insurance may cost a little more than ordinary business insurance policies.
No, Oklahoma law does not mandate cannabis insurance. However, cannabis businesses are strongly advised to get their own insurance, because the medical cannabis industry in Oklahoma is growing quickly and can be prone to a number of dangers, including liability cases, property damage, and theft.
Having cannabis insurance allows cannabis businesses to focus solely on increasing profits and providing superior products rather than becoming overwhelmed by the risks involved in running a cannabis business.
Since there are no cannabis insurance requirements in Oklahoma, filing a cannabis insurance claim is similar to any other state. If you suffer loss or damage, you need to contact your insurance agent and should be able to understand the terms and conditions of the insurance policy.
Providing proof and relevant documentation is necessary to ensure an unbiased and optimal investigation result. Proof of the incident can be photographic or video evidence.
Once the insurance company has evaluated and examined the claim, a settlement offer will be made. To make sure the offer is sufficient and reasonable, review it and consult with an insurance agent.