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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!

What You Need to Know About Cannabis Cultivation Insurance

cannabis cultivation, cannabis operations, cannabis crop insurance

Cannabis cultivation has many risks. Workplace accidents, crop failures, and damage are common. Theft, fire, and other natural disasters also affect cannabis growers. Cannabis growers face legal risks due to federal restrictions on the product. This is where cannabis insurance comes in handy.

How Do You Know If You Need Cannabis Cultivation Insurance?

Nineteen states have legalized the growth of both medical and recreational cannabis. However, many restrictions still affect the growing, transportation, sale, and use of cannabis-related products across the US. Due to the many federal rules, it is still hard for many cannabis businesses to get insurance for their products. As long as you have a license to grow, it’s easy to find an insurance company that can help you reduce risks. You should consider getting cannabis insurance if you deal with any of the following;

  1. Living plants: You deal with cannabis seeds, immature seedlings, and flowering cannabis plants.
  2. Harvested cannabis: You are in charge of drying or curing the harvested plant matter.
  3. Equipment: You need lights, a grow tent, climate control gear, trimming tables, packaging, a storage system, racking stations, timers, and drying equipment, among others, to grow cannabis indoors.
  4. You have a cannabis farm in California. Studies show that cannabis farms in California are more likely to be destroyed by wildfires than any other crop. Taking insurance cover against such risks can be helpful to growers in California.

In addition, growers who prefer to deal with cash are at a higher risk than banked ones. Unbanked cannabis growers need proper insurance coverage to mitigate risks related to cash handling. Due to banking regulations, 70% of cannabis businesses only accept cash.

Benefits of Having Cannabis Cultivation Insurance

Getting the right cannabis insurance has a lot of benefits for growers. Hemp insurance offers protection in various ways;

Protection Against Crop Failure

Cannabis is a sensitive crop that needs special environmental conditions to thrive and grow. The wrong environment and weather can cause it to fail. Bad weather and lack of enough light, water, and nutrients cause your crop to fail. Extreme temperatures, excess light, fertilizers, water, and salts can also cause crop death in cannabis farms. Failure to take good care of the crop can also affect its quality and yield. Some factors beyond the grower’s control can cause crop failure and the subsequent loss of income, threatening the future of the business. Getting crop insurance can cushion you against such a failure.

Protection Against Exposure to Pests

Pests cause crop degradation and poor yields in cannabis farms. Fungi often cause hemp roots to rot and die. Other pathogens also affect the foliage and crown, making it hard for growers in the cannabis industry to profit from their business. Stem-boring caterpillars that are not visible to the naked eye, snails, slugs, mites, aphids, gnats, and nematodes, among other insects, also affect the development of cannabis crops, affecting production. Cannabis crop insurance can offer protection against exposure to pests and insects.

Protects Your Crop Against Other Losses

Diseases, pests, and contamination are among the leading causes of cannabis crop failures. In addition, compliance and product quality can mess up your cannabis business. The difference between high-grade, mid-grade, and low-grade cannabis is in the stem, color, aroma, seed content, bud structure, trim, and trichome count. High levels of fertilizer, fungal infections, and heavy metals can also affect the quality of your product and lead to losses. Poor storage can also cause contamination and increase the risk of loss to the grower. Getting cultivator coverage can mitigate this risk and protect your cannabis business.

Recently, the cannabis industry has been facing a workforce shortage, with fewer and fewer workers looking for jobs. With this shortage of labor, cannabis businesses are likely to undersupply. Low production means poor profit margins, which can be covered under the cannabis insurance policy until things return to normal.

Buffer Against Employee Payment Delays

A crisis can cause a workers’ shortage when your crop is ready for harvest, drying, or curing. This can cause huge losses and make it hard for your business to meet its obligations toward employees. A product shortage has a similar effect. Cannabis insurance coverage ensures that you pay your workers on time.

Protect Your Cannabis Business From Equipment Failure

Equipment failure in the cannabis industry leads to product damage, crop failure, and financial loss. Hemp insurance covers all these risks and helps your business to get back on its feet.

Protection Against Theft By Dishonest Employees And Other Third Parties

Background checks are essential during the recruitment of workers on your cannabis farm. However, it is impossible to have a 100% guarantee that your workers or other third parties will not steal your product. They still hide premium buds in their gloves. No amount of background checks, security cameras, or security guards can prevent theft on the farm. While it’s easy to secure harvested crops, it is hard to avoid the theft of crops on the farm. An insurance cover can shield you against losses associated with this level of dishonesty.

Protection Against Wildfires And Other Natural Disasters

Natural disasters don’t announce themselves, and no amount of preparation can protect your farm against storms, wildfires, hurricanes, floods, and other disasters. The insurance industry is highly diversified, so you can always discuss with your provider the most suitable insurance options in your area. Think about things like workers getting hurt or other people getting hurt during the growing and harvesting process.

How to Find the Best Insurance for your Cannabis Cultivation Business?

When buying cannabis insurance to protect your cannabis farm, consider the following:

  1. Present and emerging risks in your area. The same risks affecting other agricultural products in your area could affect your cannabis farm, such as worker shortages.
  2. Natural disasters in your area. The disasters in your area are likely to affect your yield.
  3. Business needs. Look at the specific needs your business may have.
  4. Value of the crop. This will be determined by the size of your farm and the number of crops you grow.
  5. Cost. Always compare quotes from different insurance companies.

Looking for Cannabis Insurance Policies in the US? Contact Us Today!

With OG Cannabis Insurance, we are offering coverage against risks at all stages of crop development. We have over 18 years of experience in the insurance industry, covering growers against theft, fire, and ACV loss, with limits of up to $10 million. Contact us at (877) 473-7979 to request a quote.

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