California cannabis regulations are fickle. New regulations are constantly being passed and revised time and again. When it comes to running a cannabis business in California, you never know what tomorrow will bring.

If you’re new to the cannabis industry, there’s a lot to learn about laws and regulations. One slip up can have you battling a lawsuit that may put your business at risk. Investing in adequate coverage is the best way to protect yourself and your business.

With that being said, there are several things you should know before jumping headlong into an insurance policy. Let’s take a look at five essential things you should know about cannabis insurance for California businesses.

1. Know the Risks Associated with your Business

You should have a general idea of the risks associated with running your business. What specific hardships do you face in your city, county, or state? Do you have expensive equipment that needs to be insured? Do you grow your own crop? Will you sell cannabis-infused edibles? Every business faces unique challenges. Before signing up for an insurance policy, educate yourself on the local laws and regulations that govern your area.

2. Work with the Right Insurance Broker

The cannabis industry is rife with nuanced laws and regulations that require expertise to navigate. The insurance broker you partner with should be an expert in the cannabis industry. As such, they should be able to answer the following questions:  

  • What types of insurance policies does their company offer?
  • What is their experience in the cannabis industry?
  • What is their company’s policy on state vs. federal issues?
  • Can they help you identify your biggest exposures?

An experienced insurance broker should do all the heavy lifting for you. They’ll help you create a plan tailor-made for your business, ensuring all of your exposures are adequately covered.  

3. In California, Local Laws Have the Final Say

California can be tricky and perhaps a bit dangerous for cannabis businesses. State lawmakers are constantly changing their mind on laws and regulations, and local laws always have the final say.

California counties are infamous for their tight deadlines, zoning limitations, and astronomically high fees. Furthermore, local regulations may have a direct impact on the type of insurance you must have to operate your business legally. Do your research on counties that are friendly to cannabis businesses before setting up shop.

4. Cannabis is Still Illegal Under Federal Law

No matter what insurance policy you invest in, cannabis is still considered to be very much illegal under federal law. And while there are laws in place that protect state-compliant cannabis operations, if the federal laws change, states will have to comply. 

What does this mean for your business? Laws and regulations can change at any time. That may impact insurance premiums, and the type of policies you need to invest in for your business. It’s important to work with an insurance broker who can keep you apprised of the shifting political climate that may have a direct impact on your business.

5. Protect Your Assets

Cannabis businesses primarily deal in cash due to harsh federal regulations. This makes them a prime candidate for crime and fraud. Because cannabis businesses are at such high risk, it’s more important than ever to invest in an insurance policy that protects your assets.  

If you own equipment, real estate, or any other assets associated with your business, understand that your exposures are more often than not very high. Take the time to find affordable cannabis insurance to keep yourself and your company protected against lawsuits, catastrophe, and crime.

How to Get Started

It can’t be argued that the cannabis industry is making progress in California, but there’s still a long road ahead that requires experience and expertise to navigate successfully. We understand the difficulties cannabis business owners face every day.

Get a Quote

If you’re looking for a team of specialists who can help you craft a comprehensive insurance package for your business, contact Cannabis Connect today for a free quote.