Stronger Strains? Ensure Your Cannabis Business has the Right Liability Insurance

As strains of marijuana grow more and more potent with consumer demand, it’s important to understand the potential liabilities your business may face if one of your patrons isn’t prepared for a stronger dose.

Let’s start with some insurance basics—what could happen?

Your customer buys your strongest strain and has a bad experience after they leave your store. They may get sick or become too impaired and damage something (or face some similar situation) and blame it on your product.

They could potentially file a first-party or third-party claim for bodily injury, property damage or other damages related to your product. You might wonder, how do you define first or third-party? Here’s a quick breakdown:

  • First-party—occurring from an accident, injury or loss caused by manufacturing defects, improper labeling or failing to warn your customers about potential hazards (inaccurate THC measurements, the presence of mold or  carcinogens, etc.)
  • Third-party—any claim that could hold a business liable for damages that result from the use of a product (damaged property, wage loss, legal or medical expenses, etc.)

From a cannabis business standpoint, it’s important to stay informed on the potential liabilities your establishment could face. Ensure your products are regularly reviewed and appropriately labeled.

A study by Marijuana Business Daily reported that many consumers self-reported using cannabis products containing THC levels greater than 30 percent—though some claims refute this potency. Currently, most “top-shelf” cannabis strains average 20 percent THC.

Companies that produce and sell medical marijuana to patients suffering from chronic pain issues are advertising these stronger strains to better differentiate themselves from competitors—and recreational users are taking note.

Educating customers about the strength of various products can reduce the risk of any surprise complaints—and having the necessary insurance in place will safeguard your business in the event of a liability claim.

There’s a myriad of insurance considerations as it pertains to the products you offer, the risks they present and the necessary policy language needed to appropriately protect your business.

In today’s highly litigious environment, it’s crucial to asses these exposures and safeguard against future claims.

Do you have concerns or considerations related to your business and the products you offer? If you have any questions related to your coverage, please contact me at or 626-703-1556.

As a cannabis industry specialist, I can help you stay informed on key liability coverages to protect your business.

About Corey Tobin

With close to a decade of industry experience, Corey has worked with a number of small and medium-sized businesses and is knowledgeable about property and casualty, life and health insurance. Corey specializes in working with elevator contractors, manufacturing, distributing, healthcare and construction. Additionally, he is focused on the unique needs and challenges facing cannabis related business, including dispensaries, cultivators, extractors, developers and much more.

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