Commercial Cannabis Cultivation Insurance

What to expect when looking for insurance coverage for your cultivation facility.
Keith Wilkins
March 9, 2020
Not many options:
It's not surprising there aren't many insurance providers covering the cannabis industry. With Federal laws and State laws conflicting, it's difficult to get a business bank account. This forces many cultivators into large cash transactions.

Let's see, large cash transactions and massive amounts of high-grade marijuana…what could possibly go wrong? Adding in Oklahoma's open carry status and we've got a huge party on our hands!

It's amazing we have any options at all. After spending some (a lot) of time weighing the options, I noticed the following similarities in coverage:
General Liability - $2M aggregate
Property Liability - $2M aggregate
Product Liability - $2M aggregate
There are some variations, of course, but these numbers are pretty standard. All with a $1 million per occurrence limit.
Don't get in a hurry:
I worked with more than one insurance agent and there's no rushing the process. And it's not the agent's fault. After asking a battery of questions, your details are sent off and eventually come back in the form of a custom tailored quote. This process can take 3-4 weeks. I think the fastest response I got was almost 2 weeks. 2-3 weeks seem like an average time to get a quote back.
Coverage is spotty.

Once you've got your quotes together, it's a matter of picking which one aligns with your needs. If I had it to do again, I'd decide which coverage is essential and which I could do without during the waiting period. Because there's not a full package.
**Keep your eye on the exclusions**
One of the agents I worked with pointed them out and the other one didn't. After all my options rolled in, there was only one that didn't exclude wind and hail—(I'm in Oklahoma.).
Additional Requirements:
Security and SOPs
Be prepared for additional security to protect the mountain of cash that everyone thinks we have. The security requirements from the DEA seem to be standard across banking and insurance.

As well as writing out extra steps in a Standard Operating Procedure (SOP) outlining cash handling procedures. And possibly a SOP covering the event of a robbery.

You could use your waiting period to work on those SOPs, too.

I guess the big takeaway here is to know what you're willing to live without because you're not getting full coverage. Now, if you're willing to spend that mountain of cash on insurance, then you could get close to full coverage. But the real world scenario isn't giving you that option.

Figure out what's essential and then wait to see which one offers that essential.
Here's the comparison sheet I used:
(go ahead, no email sign up)