Here Are Three Critical Mistakes Multi-State Operator Cannabis Companies Need to Avoid

Multi-state operators (MSO) are well-positioned to thrive in the legal adult-use cannabis market. As a new wave of multistate cannabis operators rapidly expand their geographic footprints, many are taking advantage of acquisition and licensing opportunities as well as the ability to raise financing.

With all this new growth comes increased risk, however, and it’s important to stay informed on key liability coverages to protect your business. If you’re a cannabis MSO stretching across state lines, be sure you’re not making the following three mistakes.

Mistake #1 – Not staying updated on state regulations Every municipality has its own regulations and laws regarding the selling, growing and distribution of cannabis. If found in noncompliance, your company could face costly infraction fines, as well as insurance-related claims.

The National Cannabis Industry Association has an interactive map on their website, offering information about each state’s cannabis policies.

Mistake #2 – Not establishing a program for vetting and training drivers What is your company’s protocol for hiring drivers? Are you running new MVRs every six-months? What about driver safety training programs?

Commercial auto has always been a claim-heavy space, but is even more so when traveling across state lines. It doesn’t take much for a single incident to have a huge financial impact on your business—including the possibility of being put on notice or facing a nonrenewal by your commercial auto and workers’ compensation carrier.

Mistake #3 – Not staying focused on your company’s vision Being on the ground floor of such an emerging industry is exciting, however, chasing after the next-best market trend or every new opportunity that comes your way can become an unwanted distraction—not to mention undermine the long-term vision you have for your company.

Expansion requires balance. If you spread out too fast, your company can suffer from both a lack of focus and the risk of excessive dilution. Move too cautiously, and you risk falling behind the competition in other state markets.

As a cannabis industry specialist, I can help you stay updated on key liability coverages to protect your operations, including comprehensive coverage for product liability.

Please contact me, Corey Tobin, at or 626-703-1556. You can also follow me on Instagram and LinkedIn for more information.


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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