Cannabis Insurance
in Tennessee
Although cannabis is illegal in Tennessee, the hemp industry is growing. From cultivation to product, hemp is becoming a booming industry. Therefore, ensuring that businesses can navigate these regulations are essential.
- Introduction to Cannabis Insurance in Tennessee
- Risks Faced by Cannabis Businesses in Tennessee
- Comprehensive Coverage: Types of Cannabis Insurance Available
- Benefits of Having the Right Cannabis Insurance
- AlphaRoot Cannabis Insurance: Tailored Solutions for Your Business
- Cannabis Insurance FAQs
- Speak to a Cannabis Insurance Advisor
Introduction to Cannabis Insurance in Tennessee
Tennessee is one of the few states that have made little to no progress toward legalizing cannabis to any extent. Within the state boundaries, all cannabis products are illegal except for low-CBD oils (0.9% THC) that can only be used on medicinal grounds by patients of specified illnesses.
Technically, while medical marijuana is legal, it is inaccessible. There are no legal provisions for cannabis available in the state. Registered patients must outsource products that meet the state criteria from cannabis dispensaries in other states. However, proof of your purchase is necessary, as obtaining CBD products illegally from out-of-state is a crime.
Overview of Tennessee's Cannabis Industry
Tennessee’s cannabis industry is currently in its early stages and unlike many other states, it does not have a legal recreational or comprehensive medical marijuana program.
Legislators are still working on laws to regulate medical cannabis sales, but authorities are rejecting any potential movement that comes to the floor. Multiple bills have been rejected in the previous few years, frustrating local patients.
Tennessee Cannabis Laws and Regulations
Limited Medical Marijuana Program:
- Tennessee has a low-THC cannabis program aimed at patients with specific qualifying conditions like epilepsy and severe chronic pain.
- The program allows for the use of cannabis oil with a THC concentration below 0.9%.
- Compared to other medical marijuana programs, this THC level is very restrictive and may not be effective for all patients seeking relief.
Now, Tennesseans are waiting for the legal sale of medical cannabis to begin within the state. There’s a long way to go before the state authorities take concrete steps. As far as recreational cannabis is concerned, there are little to no expectations of state laws passing anytime soon.
Risks Faced by Cannabis Businesses in Tennessee
The biggest challenge for potential cannabis businesses in Tennessee is that there’s no state-wide regulated dispensary system. As there are no regulations on licensing and taxation, there is no way of legally opening a business.
Cultivation and processing are uncharted territories in Tennessee due to possessing half an ounce or less of cannabis being illegal. However, as the hemp businesses are booming, there’s a possibility to get federal laws and open a hemp-related business.
There are currently 2000+ licensed hemp cultivators in the state, as its hemp program is one of the most successful in the country. As the industry blooms, there are considerably fewer barriers in the hemp category and a considerable amount of support from state authorities.
Start protecting your cannabis business
Comprehensive Coverage: Types of Cannabis Insurance Available
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 commercial property, damage and bodily injury occurring on the business premises.
Learn MoreCannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or other property damage liability. Products liability insurance covers defence fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing of thc and cbd products aren’t regulated at the federal level.
Learn MoreCrop coverage provides the protection from damages or losses of growing cannabis crop, harvested plants and finished stock. Outdoor crops are more exposed to natural threats.
Learn MoreProperty 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 all cannabis operations and inventory.
Learn MoreEmployers of cannabis tenants are typically responsible for their medical payments and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly. Workplace accidents are included to this coverage.
Learn MoreGeneral 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 commercial property, damage and bodily injury occurring on the business premises.
Learn MoreCannabis companies that offer tangible products or services risk third-party lawsuits claiming bodily injury or other property damage liability. Products liability insurance covers defence fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing of thc and cbd products aren’t regulated at the federal level.
Learn MoreCrop coverage provides the protection from damages or losses of growing cannabis crop, harvested plants and finished stock. Outdoor crops are more exposed to natural threats.
Learn MoreProperty 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 all cannabis operations and inventory.
Learn MoreEmployers of cannabis tenants are typically responsible for their medical payments and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly. Workplace accidents are included to this coverage.
Learn MoreChoosing the Right Cannabis Insurance Policy in Tennessee
Being prepared in your business is mitigating all risks that can occur in a company is a great way to have long-term success. Insuring against business interruption and liability from crop to revenue can ensure your business survives when fluctuating trends arise. With the right coverage, small businesses can eliminate risks specific to the cannabis industry.
Factors to Consider When Choosing Cannabis Insurance
An insurance broker is responsible for different tasks. Hiring the wrong insurance broker will waste both your time and money. The right 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 in Insurance Selection
- 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 levels. 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 specific exclusions in cannabis business insurance that are often overlooked.
Benefits of Having the Right Cannabis Insurance
AlphaRoot is licensed to provide cannabis insurance coverage throughout Tennessee, not to mention dispensary insurance, across the entire US.
Protecting Your Investment
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.
Managing Risks and Liability
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.
Meeting Legal Requirements
Currently, there are no state-defined guidelines for opening cannabis businesses in Tennessee. The legal sale of medical cannabis hasn’t begun in the state, and its government is yet to announce any measures they’ve taken for the program.
AlphaRoot Cannabis Insurance: Tailored Solutions for Your Business
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.
Consulting with Cannabis Insurance Specialists
Partnering with experienced cannabis insurance specialists in Tennessee can help you navigate the complexities of insurance coverage and risk management in this highly regulated industry.
Comprehend Unique Risks
Specialists assess your business’s specific risks and exposures, including regulatory compliance, product liability, and crop loss, to tailor insurance solutions to your needs. Cannabis operators should acknowledge that there are many emerging risks from cannabis operations.
Navigate Coverage Options
Experts guide you through the complexities of insurance policies, explaining coverage options, exclusions, and limitations to help you make informed decisions that align with your business goals and risk tolerance.
Mitigate Financial Loss
Insurance specialists help mitigate financial losses by recommending appropriate coverage limits and policy features to protect against potential liabilities, ensuring financial resilience and stability for your cannabis business in Tennessee.
Align with Regulations
Specialists ensure that your insurance policies comply with state regulations and licensing requirements for cannabis businesses in Tennessee, helping you avoid fines, penalties, and regulatory issues that could jeopardize your operation’s success and legality.
Cannabis Insurance FAQs
All types of cannabis related businesses like: Cannabis cultivators, processors, dispensaries, manufacturers, laboratories, and ancillary businesses operating in Tennessee’s cannabis industry may require insurance coverage to protect against various risks and liabilities.
Cannabis liability coverage is crucial for businesses in Tennessee to protect against legal claims arising from bodily injury, property damage, or other liabilities associated with their products or operations. It provides financial protection against lawsuits, settlements, and legal expenses, helping businesses maintain financial stability and reputation in the industry.
The cost of cannabis insurance varies based on the nature of your business, the coverage you need, and the broker you opt for. There is no standard figure to compare the insurance quotes you receive, as insurance isn’t the same for each client. However, it can range between a few hundred dollars to tens of thousands of dollars.
You can collect estimates for different policies you’ll need and compare them. You should select the policy that best suits your business needs and knows your industry.
Tennessee’s government currently provides no guidelines regarding cannabis businesses insurances. It is recommended to have some sort of insurance for your cannabis business or any sort of business to manage your risks carefully.
Speak to a Cannabis Insurance Advisor
Partnering with a trusted insurance provider specializing in cannabis industry coverage is essential for businesses in Tennessee seeking comprehensive insurance solutions tailored to their specific needs and risks. Contact us today to explore your options and secure the right insurance coverage to protect your cannabis business in Tennessee. Pick the best Insurer in the cannabis insurance industry!
