The cannabis business insurance space has seen a lot of activity in the past few months.
As we look ahead toward the second half of 2019, here are some of the top insurance trends and developments that cannabis businesses should be aware of.
Normalization and Adoption of Cannabis Insurance
The biggest trend is likely the most obvious—the insurance industry is evolving its approach toward insuring cannabis businesses.
As the use and sale of cannabis gains increasing mainstream acceptance in more and more legalized states, the insurance industry will become more familiarized with the unique risks and challenges that businesses in this space face.
This will result in more tailored and sophisticated insurance products for cannabis businesses. Until then, business owners will need to rely on insurance brokers that have a thorough understanding of cannabis-specific risks—and currently offer the necessary products and policy language to address them.
Securing Coverage Still Takes Time
Whether it’s a cannabis operator, cultivator, manufacturer, distributor or shop owner, securing coverage quickly can be a challenge.
Cannabis businesses eager to become operational are often surprised by the amount of time it takes to get the insurance they need. Securing this coverage is not an overnight proposition, and often there is a lot of nuance to consider in this process.
As the insurance industry becomes more accustomed to these type of risks, it would follow that the time required to develop and place the necessary policy language will decrease over time.
To help avoid this issue for now, it’s up to establishing businesses to start the insurance conversation with brokers early in the process.
A Young Industry Will Face Growing Pains
As the cannabis industry continues to grow, the next few years will see a lot of evolution that will pose new insurance challenges.
Startups will see new management emerge, successful companies will see leadership changes and the potential for cannabis business insurance oversight and misunderstanding will likely increase. This will be further complicated as new technology drives product innovations that will pose entirely new and specific risks that will need to be addressed by the insurance industry.
As the industry continues to evolve its approach toward insuring cannabis businesses, it will be up to professionals in this space to stay ahead of the insurance conversation and understand that the risks they face are going to require a bit more attention than a traditional operation. Again, a proactive approach is the best one.
If you have any questions or concerns as it pertains to your own insurance policy for your cannabis business—or if you’re looking to get coverage in place—please contact me via email or give me a call at (626) 535-1480.