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OG Cannabis Insurance Blog

The insurance game is an ever-changing environment, especially in the Cannabis Dispensary Insurance sector. There are a variety of different factors (e.g. cannabis laws and policies) that can affect the way your insurance works and how you and your business are covered.

The OG Cannabis Insurance blog keeps you up to date on cannabis insurance, laws and policies, and dispensary insurance news so you can be proactive on protecting yourself when the unexpected happens. We update our cannabis insurance blog regularly so check back soon for more posts!

Cyber Insurance for the Cannabis Industry

As more states legalize cannabis for recreational and medical use, more people are venturing into cannabis-related businesses, which offer a broad scope of opportunities that individuals can capitalize on. One such opportunity is running a marijuana dispensary to buy marijuana for recreational or medical use. But with it comes the cyber risks that can hurt your business and damage your reputation.

What are the Cyber Risks In The Cannabis Industry?

Because of regulations, the marijuana dispensaries and cannabis-related businesses collect a ton of sensitive data and information from clients who visit their stores. Having this information makes them vulnerable to hacking, which has been on the rise recently. The increase of cyber attacks targeting marijuana businesses is multifactorial. The rise in hacking is due to how firms in other industries can use the data collected in marijuana dispensaries. For instance, a marketing company would use the information for targeted advertising to unsuspecting clients.

Some of the cyber risks that hackers are most likely to initiate that target dispensaries include;

Cyber Extortion

Some states insist that all dispensaries must-have camera coverage on all dispensaries and areas where marijuana is grown. They also add that cameras must be placed at the point of sale to capture the activities during transactions. When hackers gain access to the camera feed, they can collect personally identifiable information, faces, credit card details, and PINs, then use this information to extort money or favors from the victim, especially if the victim is prominent or would prefer to keep his marijuana consumption private to protect their reputation. Most hackers can perpetrate such crimes because most dispensaries don’t invest or pay attention to cyber security measures.

Ransom Attacks

When hackers share or sell any proprietary information from compromised systems, it can lead to business interruption and give an undue competitive advantage to competitors and other businesses in the same industry. Most marijuana dispensaries and cannabis-related businesses have weak cyber security protocols, and this increases the risk of hackers infiltrating their systems, installing ransomware, and demanding ransom from the victims. Also, ransom attacks can disorganize your data and force you to incur further costs for data restoration once the hackers provide a decryption key.

Data Breach and Theft

The difference between ransomware and an outright data breach is the motive. While in a ransomware attack, the hackers intend to hold your data and systems hostage for a ransom payment, data breaches aim to access and steal sensitive data. Hackers infiltrate and target marijuana dispensaries and other cannabis businesses where business data like intellectual property and proprietary information or personal details like passwords, personally identifiable information, phone numbers, and credit card details, among other data, are collected and stored. The hackers can then sell the information to your competitors.

When unintended persons use information gathered through this cyber risk to harm your customers or expose them to unwanted services, it puts you at the risk of third-party claims from the customers. In this case, cyber liability insurance would work best to provide coverage for you and your business against such threats.

Intelligence Gathering

When hackers gain access to your client management systems and those operated by other targeted cannabis retailers, they can track and gather data about your customer’s medical history, store visit frequency and spending habits, and other data points. They can then analyze the data and create targeted marketing and extortion campaigns from the identified patterns and influence the consequential decisions that your customers may make.

How to Protect your Company from Cyber Threats

Protecting your company from cyber threats is a team effort rather than a solo act. You and your team need to practice safe cyber practices and invest in high-tech systems and software that protect you from any data breach and ensure customers’ data doesn’t end up in the wrong hands. Using Strong passwords, multi-factor authentication, database firewalls, backing up data, and training your employees on online safety can help you and your company steers away from any cyber attack.

The cost of installing such measures might be high, but they will help you track and trace system access and data breaches and thus enable you to take further security measures to curb future cyber attacks. Having these measures is vital to your company even when you have not experienced any prior security incidents leading to data loss.

What can you do to ensure that your Marijuana Dispensary’s Data is Secure and Protected?

The level of scrutiny in the marijuana industry necessitates that customers’ data is collected, stored, and handled according to strict privacy laws. These laws safeguard customers’ data against breaches and misuse and protect both the customer and your business. The privacy law allows clients to opt-out of marketing campaigns, demand to have their personal information deleted from your database, and sue for non-compliance with privacy laws.

Here are two significant ways to ensure that the data you collect at your marijuana dispensary is safe;

Paying Attention to the Physical Security and Safety of Your Dispensary

Having CCTV cameras and security personnel guard your premises all round the clock may not be entirely related to cyber-attacks. Still, excellent physical security can go a long way in helping your dispensary stay safe from cyber attacks. For instance, security personnel will ensure that unauthorized persons don’t access your premises. This way, it won’t be possible for anyone to insert a key logger into your server or systems to initiate a more extensive cyberattack. It also works as a backup in case your CCTV camera feed falls into the hands of hackers.

Invest in Cyber Security

Your cyber security arsenal should not stop at passwords. You should invest in relevant systems that deter hackers from accessing your systems. It would be best if you considered setting up Firewalls, data backup systems, penetration testing, and system monitoring are other aspects of cyber security to protect your automation systems and client-specific data.

The Importance of Protecting Customer Information and Financial Data

You have so much at stake as a business while handling client information and financial data. You bear the responsibility of protecting the data and your brand. Protecting customer information and financial data through sound risk management practices protects you from risks that can lead to regulatory actions against you and your business. Regarding your brand, handling first-party data can go a long way in influencing your client relations. Customers will be keen to associate with a brand that they feel respects their privacy and go the extra mile to protect their data.

Want to Secure your Cannabis Business from Cyber Risk? Contact OG Cannabis Insurance to learn more!

With medical marijuana transitioning into substantial commercial enterprises, cyber attacks in the marijuana industry will increase. OG Cannabis Insurance offers coverage that will protect your business from cyber risks, among other operational risks against cyber liability. For reliable Marijuana Insurance coverage, call (877) 473-7979 to get a quote or use our online quote form to get a breakdown of your premium payment.

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