As the cannabis industry continues to grow and evolve, it is more important than ever to understand the link between risk management and profitability. Watch our on-demand webinar to learn key strategies to keep your workplace safe and avoid costly, catastrophic claims.
The cannabis industry is experiencing increased cyber fraud — this is why cannabis companies should place additional focus on cyber liability coverage. This includes protection against funds transfer fraud, social engineering scams and ransomware attacks.
Also, as more advancements are made in the cannabis industry, the need for intellectual property protection grows.
If the regulatory body overseeing the transaction is Canadian, yes. If the regulatory body overseeing the transaction is American, it can be more difficult and often depends on the size of the transaction. While coverage may not hit one’s desired target, the length of time to provide indemnification is elongated.
All cannabis businesses need internal risk management resources at every phase of the company’s lifecycle as risk exposure always exists. In the early phases of a company’s lifecycle, risk management may fall to the CFO, CEO or general counsel. But when this work becomes too much for that individual to handle in conjunction with other responsibilities, it is time to hire a dedicated resource. This often happens once a business expands to multiple states and requires many insurance policies. The value of dedicated, focused risk management is very evident as companies see a reduction in claims and savings on insurance policies.
Key risk considerations in the manufacturing of cannabis edibles are vendor management, controlling your supply chain and ensuring your supplies are secured from reputable companies that meet your quality standards. Make sure to talk to your insurance broker about food manufacturing insurance.
Additionally, if you are creating and selling edible cannabis products, “mental anguish” is a concern as it can be an exclusion in insurance policies. Mental anguish takes place when a customer purchases and consumes one of your products and claims you are liable for a psychotic episode caused by the edible. So be aware and ensure you have the proper insurance to protect against mental anguish.
