Insurance Risk in Cannabis Operations: Theory v. Practice

Cannabis industry participants face heightened risks when purchasing and using insurance products.

Generally speaking, disputes between carriers and insureds are not infrequent; however, coverage disputes in the cannabis industry can be of a different caliber altogether. There is ample evidence suggesting that, on a very basic level, cannabis industry participants face heightened risks when purchasing and using insurance products, with the end result being that many operators believe they have adequately insured potential risks when in fact they haven’t.

In this white paper we discuss several key areas for cannabis industry operators to consider when purchasing insurance:

• Make sure all risks are insured
• Be wary of exclusions
• Choice of law provisions
• Choose advisors & business partners carefully