Marijuana, Insurance & Legality of Things

Americans now spend as much on marijuana products as they do on Netflix subscriptions. In Oregon alone, legal marijuana is a $1.2 billion industry. 

The irony, however, is that consumption and sale of marijuana remains illegal under federal laws even though more and more states are legalizing it. This creates legal challenges and lack of protection for the business owners such as the lack of ability to patent products, file bankruptcy, and enforceability of contracts. At the same time insurance companies are reluctant to offer insurance products due to the threat of federal prosecution.

Procuring insurance for marijuana related businesses remains challenging both for the business owner and the insurance provider. The risks, regulations, and products are relatively new, and the insurance industry is barely catching up. The good news, however, is that we are one of the unique insurance houses that offers insurance products to this industry. 

Additionally, financial institutions are still unwilling to work with marijuana related concerns, so the industry is primarily cash based. This makes many cannabis-based businesses targets for criminal activity due to the increased risk of robberies and other theft-related crimes. Additionally, cannabis is no longer a flower used for smoking. The industry has expanded into oils, wax, edibles, balms, and beauty products. This has created new product liability and safety recall exposures.

Additionally ancillary cannabis businesses such as cannabis infused products, trade shows, distributors and transporters etc. are also growing. Insurance underwriters are not comfortable with these expanding risks and product liability exposures, and we have to present each application on a case by case basis. 

Tilikum Insurance is Oregon based and Pacific Northwest focused when it comes to marijuana insurance. We understand the landscape of the cannabis enterprise rather well, and we were amongst the first to insure marijuana retail shops in Portland, and the surrounding counties of Clackamas and Washington.