Businesses working within the legal marijuana industry now have options for covering potential losses.
The medical marijuana industry in California has struggled with a significant stigma and, until recently, cannabis business insurance opportunities have been few and far between. That said, coverage is now opening up for these companies who want to protect themselves against losses relating to their facilities, products, or other business related perils.
This week, the California Insurance Commissioner, Dave Jones, released a statement to this extent.
Jones explained that the California has approved the first cannabis business insurance provider for the creation and sale of policies in that industry. This comes as a relief not only to companies in the medical marijuana industry, but also those that intend to participate in the recreational market. As California intends to make it legal to sell recreational marijuana in the state as soon as January 1, 2018. The state is preparing for the release of its final guidelines to companies planning to take part in that market.
The lack of cannabis business insurance availability led to millions of dollars in last month’s wildfires.
The Northern California wildfires torched their way through millions of dollars worth of cannabis product and processing centers. Almost all the losses were uninsured because the opportunity for purchasing coverage was either too limited or was completely unavailable.
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The first company to receive California’s approval to sell this type of business policy is called Golden Bear Insurance. That insurer revealed that it plans to start selling the business insurance policies right away.
“This is the first of what I hope will be many commercial carriers filing insurance products to fill insurance coverage gaps for the cannabis industry,” said Jones.
He added that there are many people and companies that will be able to benefit from the existence of this coverage. This includes shoppers who visit cannabis businesses, the employees working in those companies and the businesses either selling to or renting property to these companies, investors as well as the owners and operators themselves. Having cannabis business insurance will help to better equip them for recovery in the case that something should go awry.