The State of the Cannabis Insurance Market

Grassroots Marketing deep dives into the state of the cannabis insurance market with Tony McIntosh, President of Aura Risk about the launch of Aura’s Indisure Cannabis Program Demand for cannabis is increasing dramatically. Thirty-eight states and the District of Columbia (D.C.) have legalized some form of medical marijuana. Recreational marijuana is legal in 19 states and D.C. The division between state and federal status makes it difficult for businesses to receive inclusive, affordable coverage and often leaves policyholders with restrictive plans. Cannabis-related businesses (CRBs) face many risks and obstacles. CRBs share the same general liability and other risks agricultural and manufacturing businesses face. This includes workplace accidents, damage to property and crop failure. CRBs are especially prone to fires from both wild and internal sources. Some of the biggest risks involve theft, general liability and product liability. Companies functioning within state legality face severe banking restrictions due to federal regulations. It is estimated that approximately 70% of CRBs operate solely as a cash-only business and have no formal relationship with a bank. As a result, CRBs may be forced to handle large sums of cash, subjecting them to a higher risk of theft and increased liability.