The cannabis industry faces some unique insurance challenges, especially when it comes to theft and fire risks. Beth Ossino, claims manager at Golden Bear Insurance Company, shared some eye-opening stories about big losses suffered by cannabis businesses during the recent Insuring Cannabis Summit.
Ossino described incidents where thieves broke into businesses and made off with large amounts of cannabis products or even safes. In one case, a crop of 600 plants was stolen after a box truck crashed through a roll-up door. “They come in and take whatever they can,” Ossino said, highlighting how such crimes pose a serious threat to growers and dispensaries alike.
Insurance claims in cannabis also get complicated because of strict policy conditions. Some policyholders don’t follow required safety measures, like having wired alarm systems or sprinkler systems, which can affect their coverage. Additionally, poor accounting records at dispensaries sometimes cause problems when business interruption claims arise.
Lighting systems in grow facilities are another focus for insurers. Michael Kirk, an underwriter at Cannasure Insurance Services, pointed out that LED lights are much safer than older non-LED ones. Bulb fires are a top concern for insurers, and LEDs, which run cooler, help reduce fire risk. He mentioned that for growers to get coverage, their facilities generally need to be fully equipped with LED lighting or proper sprinklers.
However, Michael DeNault from World Insurance Associates noted that while LED bulbs stay cool, their power drivers can get very hot, especially after many hours of operation. To deal with this, some lighting companies now offer driverless or remote driver LED setups, moving heat sources out of grow rooms and easing strain on ventilation.
Cannabis businesses also face challenges because they deal mainly in cash. Banking restrictions at the federal level mean many cannabis companies don’t have easy access to accounts. Ossino shared how one company in Oakland regularly rents armored trucks just to transport tax payments safely across the Bay Bridge.
There is hope for change. A bipartisan group of attorneys general recently asked Congress to pass the SAFE Banking Act of 2025. This law would protect financial institutions offering normal services to state-legal cannabis businesses from legal trouble. Former President Trump also expressed support for reclassifying marijuana to allow more research and safer banking.
Risk management efforts can help lower crime risks in cannabis businesses. Installing high-quality vaults, security services, bollards at entrances, and keypad locks can make a difference, said DeNault and Kirk. DeNault’s team also helps clients improve safety measures, which can lead to better insurance rates.
Cannabis lounges are another emerging area. These places, which often serve food and sometimes host live events, come with extra insurance questions. Cannasure asks about business hours, security, and staff training to manage intoxicated customers properly. While still rare, more lounges could open soon, especially with new licenses issued in places like New Jersey and potentially Massachusetts.
As the cannabis market grows, insurers and businesses alike are learning what it takes to protect these unique operations. With better safety, updated laws, and smart risk planning, the industry can keep moving forward while facing fewer setbacks. For those interested, recordings from the Insuring Cannabis Summit are available at insuringcannabissummit.com.