Can Cannabis Businesses Be Insured?

There are many factors to consider when thinking about insuring a cannabis business. The risks and rewards of this type of insurance vary widely, so it is important to understand the options before making a decision.

Cannabis businesses are not insured by any government programs. However, hemp insurance companies have been created to help these businesses get the coverage they need.

Cannabis is a big topic right now. As the battle for legalization continues throughout the country, an increasing number of businesses are vying for a piece of the booming market. According to current data from the Anthenum Collective, more than 67 percent of Americans think cannabis should be legal, and legal cannabis sales are projected to reach $73.6 billion by 2027. The cannabis business in the United States is expected to be worth $61 billion by 2021, according to Flow Hub.

If you want to go into one of the various aspects of the legal cannabis industry, such as cultivating, testing, commercial retail space, or processing, your insurance choices are now restricted. While these companies, like all other businesses in America, would benefit from appropriate insurance, they must contend with existing federal laws that classify cannabis as a Schedule I prohibited drug with no medicinal use and a high incidence of addiction.

Currently available insurance options are both expensive and limited.

Despite mounting evidence that cannabinoid treatments have potential for treating a variety of ailments, existing federal prohibitions and the stigma that surrounds them continue to make it difficult for cannabis companies to get cheap insurance. “There is an enormous demand for the appropriate types of insurance,” said Rocco Petrelli, head of the National Cannabis Risk Management Association, according to media reports.

Cannabis, without a doubt, generates hundreds of millions of dollars in tax revenue. The businesses that are driving this economic growth should be able to get insurance like everyone else, and many indications point to federal legalization as a possibility. One of those indications is insurers discreetly preparing for a possible increase in cannabis sales of $17.5 billion or more per year if Congress repeals federal prohibition in some form by 2022, as predicted by the BDSA.


Insurance companies are coming out with new kinds of insurance coverage to keep up with the changing times and political tides. States with medicinal and recreational cannabis laws often negotiate with state-regulated insurers to acquire limited property and liability coverage. If the federal government repeals the marijuana ban, insurance firms will be allowed to cover shipping, crops, theft, and other risks.

Gavin Kogan is the CEO of Grupo Flor, a California-based cannabis producer, distributor, and grower with five dispensaries. According to Kogan, he spends $85,000 to $100,000 each year for $1 million in Directors and Officers (D&O) insurance, despite the fact that the coverage is quite restricted. When businesses do not have enough insurance, it may lead to an increase in operating expenses as well as a slew of other issues.

The Future of Cannabis Insurance Will Be Examined at an Upcoming Cannabis Insurance Conference.

Insurers that are set up to provide the required coverage for cannabis companies at affordable prices may expect a significant rise in earnings. The third annual Insuring Cannabis Summit, hosted by the Insurance Journal on Oct. 14, will concentrate on what’s next for individuals working in the legal cannabis sector and those providing insurance for it.

It’s a wonderful moment for federal cannabis legalization since creative cannabis companies are springing up all across the nation. The Mashantucket Pequot Tribe of Connecticut is proposing a 25,000-square-foot mega dispensary, which is one of the most anticipated at the present. Consider the types of insurance that a company of that size would need.

Allowing cannabis businesses to get appropriate insurance in the same way that alcohol, cigarette, and pharmaceutical businesses do would transform the sector as we know it. Operational expenses would fall, giving companies more financial stability and customers more discounts. It would also make it possible for medical insurance to cover cannabis in the same manner that prescription medicines are covered. We can see the cannabis sector achieve its full potential with the proper support—and, ideally, the elimination of cannabis prohibition.


Ashley Priest is a patient, mother, entrepreneur, and activist who is working to abolish prohibition across the world for a brighter future for everyone. Ashley is passionate about spreading knowledge about the goddess plant known as cannabis. She thinks that a single seed can tilt the scales, and that by working together to remove the stigma around cannabis, we can help it reach its full potential worldwide.

The epli for cannabis is a business insurance company that specializes in the cannabis industry.

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