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Cannabis Blog

How COVID-19 is Affecting the Cannabis Industry

With COVID-19 causing economic uncertainty in every sector of the economy, staying on top of industry trends is more important than ever. In our most recent webinar, Emerging Risks and Enhanced Coverages for the Cannabis Industry for the Cannabis Industry, we covered:

  • The impact COVID-19 is having on the marijuana industry.
  • The latest with cannabis vaping lung injuries.
  • General cannabis industry insurance trends.
  • Admiral’s comprehensive insurance program for cannabis businesses

Cannabis Dispensaries and COVID-19

In most states, medical dispensaries have been deemed essential businesses, meaning they remain open. The rules are less clear for dispensaries selling strictly recreational marijuana, but with the exception of Massachusetts, it appears they mostly remain open during the stay at home orders too.

In some cases, states are allowing curbside pickup and delivery only, which may be impacting sales. Other states are requiring or recommending masks for both customers and employees, limiting the number of people that can be in a dispensary at one time, and other precautions.

If you’re interested in more detailed information, Marijuana Business Daily has a complete rundown of where each state stands on the cannabis industry and COVID-19.

The curbside pickups and deliveries are also prompting dispensaries to ask if these services are covered by their policies, and insurers to write them into the coverage. And, preliminary indications are that the marijuana business is continuing to grow despite markets contracting in many sectors. Requests for insurance coverage have also remained steady.

Related: Webinar- Emerging Risks and Enhanced Coverages for the Cannabis Industry

Vaping Lung Injury Update

Lung injuries and fatalities from vaping caused by chemicals or harmful ingredients in vape liquids became a major issue for the marijuana and tobacco industries in 2019, but appear to be on the decline.

The main culprit was likely a thickening agent known as vitamin E acetate, which was found in some black market THC cartridges. No cases have been connected to the legal cannabis market. It does, however, highlight the importance of looking at product ingredients, testing, and purity standards when writing product liability policies.

General Cannabis Industry Trends

 Slowly but surely, recreational cannabis is becoming fully legal in many states. Maine is set to open for recreational sales in the coming months, and this has not changed as far as we know.

In New Jersey, there will be a ballot measure to legalize recreational marijuana in November. Vermont, which has legalized recreational use and cultivation but still does not allow recreational sales, is considering legislation that will create a recreational cannabis industry. Florida will not be voting on a ballot measure in 2020, but is pushing for one in 2022, and Arizona and other states also appear to be moving a similar direction.

Within the industry, mergers and acquisitions are increasing, as larger operations buy up smaller ones, and move into multiple states.

At the federal level, there is still little chance for broader legalization, at least in the next few years. This has made multi-state operations somewhat tricky, and has often required having different insurance policies for each state. To overcome this challenge, and give businesses an easier, more streamlined insurance solution, we are very excited to announce that we are launching a program that will cover multi-state operators under a single policy.

If you are a wholesale broker in need of an insurance partner with deep expertise in the cannabis industry, contact us to become an appointed broker. If you are a retail insurance broker with clients such as marijuana dispensaries, cannabis product manufacturers or marijuana growers, we encourage you to connect with one of our wholesale partners. 


Keith Distel

Written by Keith Distel

Keith Distel is the Casualty Team Leader and Marijuana Liability Subject Matter Expert in Admiral’s Chicago office. Prior to joining Admiral Insurance in 2016, he worked as an underwriter and product developer in the E&S casualty industry. He began his career in the concert business, managing amphitheaters and touring with acclaimed rock artists. Keith holds an MBA in Finance from The Barney School of Business - University of Hartford.

Topics: cannabis, marijuana insurance, marijuana dispensaries, cannabis insurance, marijuana growers, marijuana processors



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