Cannabis Insurance

Cannabis businesses face significant risk regardless of their purpose – plant growth, extraction, retail sales or distribution. Crime, employee theft, product contamination and cyber breaches are common in each discipline and must be accounted for when purchasing business insurance. A broker with industry-specific knowledgeable is a must to securing the right coverage with the right limits.

All cannabis operations will want to consider offloading risk to coverage with the following policies:

• Commercial general liability
• Management liability including D&O, crime and employment practices liability
• Product liability and product recall
• Property and crop insurance
• Equipment breakdown
• Business auto including hired and non-owned
• Care, custody and control coverage for distributors transporting third party goods
• Surety bonds
• Workers’ compensation
• Crime
• Cyber

Safe R&D extraction, employee theft and incorrect product labeling are a few of the risks cannabis businesses face daily. And without adequate organizational development, even explosive growth is a liability. Proper risk management is key to keeping insurance costs low, complying with state laws and reducing the risk of future claims.

HUB Cannabis Risk Services and Claims Management can help your business with:

• Regulatory compliance assistance
• Worker safety and security
• Operational hazard and site security assessments
• Business continuity and emergency response planning
• Transportation and fleet safety management
• US/Canada cross-border business challenges
• Claims management and advocacy services
• HUB Fleet Solutions Marketplace for risk management and technology solutions for commercial fleets.

When configured correctly, employee benefit packages in the cannabis industry can help reduce high turnover and employee theft. The first step? Examine the needs of your team. Let HUB’s experienced employee benefits team help you build the right EB program for your cannabis business.

• Small business benefit packages
• Strategic benefits planning
• Voluntary benefits
• Executive benefits
• Health & Performance
• HR and Employment Law consulting (US only)
• HUB Benefits Captive exclusively for cannabis companies

Yes. Cannabis businesses operating legally under state law can obtain business insurance, even though cannabis remains a Schedule I controlled substance under federal law.

A growing number of specialty insurers operate in the cannabis space and are licensed to underwrite coverage in states where medical or recreational cannabis is legal.

Federal illegality does complicate the insurance market; standard carriers largely avoid the sector, which is why working with a broker who specializes in cannabis is essential to finding reliable, compliant coverage.

Several variables influence what you will pay, including your license type, annual revenue, claims history and the specific coverages you require. Dispensaries, cultivators, processors and distributors each carry different risk profiles, so premiums are not uniform across the industry.

Other factors include the size and security of your facilities, your compliance record with state regulators and whether you operate in a single state or across multiple jurisdictions. A cannabis-specialized broker can help you understand how these variables interact and identify opportunities to reduce your total cost of risk.

Most insurers require an active, valid state-issued cannabis license before they will bind coverage. Beyond licensing, underwriters will typically want to review your security protocols, inventory management practices and regulatory compliance history.

Businesses that can demonstrate strong controls such as robust surveillance systems, documented employee training and clean compliance records are generally more attractive to insurers and may access broader coverage at more competitive rates. If you are in the application or pre-opening phase, some coverage options may still be available, so speak with a HUB advisor early in the process.

Yes, product liability and product recall coverage can protect your business if a product needs to be pulled from shelves due to contamination, mislabeling or failed potency and pesticide testing.

In the cannabis industry, a recall can be costly, involving regulatory notification, product destruction, consumer communication and potential litigation. Standard product recall policies can be structured to cover these expenses, but the specific triggers and limits vary by policy. Given the frequency of state-mandated testing requirements, product recall coverage is one of the most important protections a cannabis business can carry.

Cannabis delivery requires specific coverage that a standard commercial auto policy may not provide. Businesses operating delivery services need to account for the unique exposures of transporting cannabis products directly to consumers, including vehicle liability, cargo loss and employee conduct during delivery.

Hired and non-owned auto coverage, commercial auto insurance and care, custody and control coverage for third-party goods are all relevant for delivery operations. Regulatory requirements for delivery also vary significantly by jurisdiction, so your coverage should be reviewed any time you expand into a new market.