by Julie Weed
The #marijuana industry’s shady past and current illegal status at the federal level have kept most #insurance companies from offering policies to the new industry. “Few and far between,” is the way Paul Warshaw CEO of GreenRush in California describes the options. His technology company works with more than fifty medical marijuana dispensaries and he says many of them do not have all the coverage they need.
Slowly though, things are beginning to change. Insurance carriers are approaching the new marijuana landscape “with caution,” and are beginning to offer coverage according to Gerry Finley, Senior Vice President Casualty Underwriting, at Munich Reinsurance America.
As insurance carriers begin to examine the industry, several “have indicated a willingness to provide a broad array of property and casualty coverages to those in the marijuana #business, albeit with robust pricing,” Finley said. Risk factors associated with the legal #cannabis industry include theft because many businesses deal mainly in cash, he said, as well as potential pollution if the customer is a grower/processor, and neighbor complaints.
Adam Weiss and Spencer Uniss, are founders of the six year old company Bolder Cannabis and Extracts. They employ 60 people to grow marijuana, process it and sell it to stores around Colorado, including two that they own. The company maintains an array of coverage including liability, workers compensation, health insurance for their management team and product coverage. Weiss notes his insurance prices may be higher than those of non-cannabis businesses because, “insurance companies don’t have much competition in this industry and can charge a lot.”
Greg Warme, owner of Bondi Farms in Washington State employs fourteen people and sold his first marijuana crop earlier this year. He also found that while he did not have problems getting coverage, his insurance agent offered only a few options and told him that his rates were “high compared to companies outside this industry.”
Options are increasing though Weiss said. “We’re seeing more of the big name players enter the market now that they’ve seen others dip their toe in successfully,” he said.
Prices may come down for another reason said Uniss. “As insurers see companies like ours operating in a responsible, compliant way, and they can collect real data, they can get a better picture of the actual risks they are taking,” he said.
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