Much has been written about the difficulties and limitations of insuring leaf-touching cannabis businesses. However, any individual or company simply interacting with the cannabis industry may unsuspectingly have a gap in insurance, or worse, be jeopardizing their entire insurance portfolio. Fortunately, this issue is increasingly fixable if addressed proactively.

As the number of cannabis businesses increase, more ancillary companies are providing products and services to those cannabis businesses, including professional advice, software, technical support, leasing property, packaging, among others. Businesses interacting with the cannabis industry have some increased risk, but it is relatively benign. With the advice of counsel, most businesses have accepted these risks; however, they may not be risks that are accepted by their insurers. This is a crucial consideration that should be an integral part of the up-front decision to be associated with cannabis. Even though nothing about the services or products being provided is different for a cannabis customer than for any other customer, insurance carriers may treat it very differently. This is a significant misconception that can have disastrous consequences.

Anyone acting in or interacting with the cannabis industry should be forthright with their insurers about doing business with the cannabis industry. Failure to do so could lead to no coverage whatsoever in the event of a claim so consulting with an attorney or an insurance broker who is familiar with the coverage issues prior to engaging in the cannabis space could make all the difference when it comes to protecting your business.