From scorching heatwaves and prolonged droughts to unseasonal frosts and intensifying wildfires, cannabis growers across North America are confronting a growing list of environmental threats.
This trend underscores the need for crop insurance and for growers to take measures to protect their crops against this growing threat. At the same time, insurance coverage remains difficult to access, may be inadequate or prohibitively expensive, leaving many businesses exposed when disaster strikes.
For cannabis cultivators and business owners, navigating climate risk today requires more than just adapting to extreme weather. It means building resilience through operational changes, securing proper insurance coverage and planning for volatility in every season.
Climate change is reshaping cannabis farming
Cannabis thrives in a narrow range of environmental conditions — ideally between 70°F and 85°F, with controlled humidity, predictable light cycles and nutrient-rich soil. But climate disruptions are making those ideal conditions harder to maintain.
Outdoor growers, in particular, face increasing risks.
Growing risks confronting growers
- Heatwaves and droughts are scorching plants, stressing irrigation systems and lowering yields.
- Cold snaps can arrive early or unexpectedly, stunting growth or killing flowering plants.
- Wildfires and smoke events, common in states like California and Oregon, can render entire harvests unmarketable – even if flames don’t directly reach the fields.
- Rainfall extremes, including flooding and erosion, are degrading soil health and increasing plant disease outbreaks like botrytis and powdery mildew.
Insurance gap persists
The increasing frequency of climate-related losses makes insurance a critical safeguard — but cannabis businesses often struggle to find adequate coverage.
One of the biggest challenges for cannabis operators is finding “admitted” insurers, those that are licensed in the policyholder’s state, to cover them.
Many carriers shy away from covering the industry due to conflicting federal and state laws. As a result, cannabis growers often have to go to the non-admitted market, which consists of legitimate insurance companies that are not licensed in the policyholder’s state.
These policies can be more expensive, yet the coverage is also more bespoke and may include exclusions and provisions not usually found in admitted carriers’ policies.
Even so, many growers end up underinsured or unclear about policy exclusions — especially for climate-related losses like smoke taint or mold.
Reassess Product Claims and Compliance Procedures
Key challenges in cannabis insurance include:
- Limited crop insurance availability, especially for high-THC cannabis (as opposed to federally legal hemp).
- High premiums and limited underwriting data, making policies costly and sometimes vague.
- Common exclusions for mold, rot or fertilization errors — even when triggered by extreme weather.
While insurance remains an imperfect solution, it plays a critical role in protecting against total loss — and should be pursued in tandem with climate-resilient growing practices.
Steps cannabis operators can take
- Audit current insurance policies for climate-related gaps. Connect Insurance Services, an Acrisure Partner, can help.
- Adopt regenerative farming techniques to improve soil and water retention.
- Use smart sensors and environmental controls to detect problems early.
- Diversify genetics to include heat- and drought-tolerant strains.