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Pot Growers Said To Be Clueless Re Insurance

Cannabis leaves in front of Ben Frnaklin's face on a $100 bill.

November 24, 2021

The typical cannabis policyholder too often views insurance coverage “as a box to check off for compliance purposes,” according to the managing partner of one law firm that handles risk management and insurance coverage needs for cannabis companies. This is a main reason, according to Jason Horst, managing partner for Horst Legal Counsel PC, why carriers haven’t broadened the range of available coverage.

Cannabis is an industry that’s “going through growing pains,” said another attorney who has been with the industry from very near its beginning, speaking at a recent “Insuring Cannabis Summit” convened by Insurance Journal. That attitude is not surprising, she says, considering the industry’s rapid evolution from an underground where conventional insurance wasn’t an option.

One big potential issue now beginning to surface: product liability lawsuits. She is surprised there haven’t been more of them, says one attorney, and she likens the situation to a dam that’s starting to crack up. Other major risk/insurance issues in the cannabis world – also perhaps a function of its relatively recent emergence from the shadows – include physical security and such matters as perimeter fencing, lighting and cash-on-hand. In the wings are some more generic business risk issues, including errors and omissions exposures and Prop 65 issues.

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