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Marijuana Businesses Are Booming, Creating New Markets for the Insurance Industry

Over the past decade, the cannabis industry has been one of the fastest-growing segments of the US economy. With cannabis legalized in some form in states encompassing two-thirds of the US population, the legal cannabis market in the US surged to $10.4 billion in 2018, nearly doubling in the span of just three years.

That number is only expected to grow. With a greater understanding of its medicinal properties, a shift in cultural attitudes and more pressure on states and the federal government to move toward full legalization, experts project that cannabis will be at least a $25 billion-dollar industry in less than ten years.

A Growing Market for Cannabis is Creating Opportunities

As with any burgeoning market, growth in the cannabis industry is creating opportunities for other industries as well, including the insurance industry.

Like any business venture, cannabis business owners have an interest in protecting against loss.

Being a relatively young industry, it can sometimes be difficult to make an accurate assessment of the risks inherent in the cannabis space. Those entering the industry may not know what kind of liability they have or what they need covered. Many insurers may not know either, which is why it is so important for insurance brokers to work with expert underwriters who can help them understand and properly insure those risks.

Calculating Risk in the Cannabis Industry

Cultivators, processors, distributors, and retail stores all have unique risks that need to be considered.  At each step in the seed-to-sale chain, the calculations become more complex. Does the grower spray chemicals on the plants that may cause allergic reactions or harmful side effects? What about contamination from common bacteria like E. coli and Salmonella? How is the chain of custody tracked?

If a cannabis dispensary sells edibles, are they produced in a facility that follows FDA and other health regulations? What about liability arising from selling vaporizers whose batteries have been known to explode?  

These are just some of the questions that need to be asked when assessing risk and identifying the right insurance coverage. There aren’t always easy answers.

Fortunately, our underwriters at Admiral Insurance Group are experts in assessing liability for all types of businesses in the cannabis industry, helping our broker partners and their clients make sense of their risk, and writing individually tailored policies to meet the needs of each insured.

Learn more about cannabis insurance

Learn more about Admiral's cannabis insurance solutions.

Admiral Insurance Group is a leading underwriter of product liability insurance for businesses in the cannabis industry.

If you are a wholesale broker in need of an insurance partner with deep expertise in the cannabis industry, contact us about becoming 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


Products and services described above are provided through various surplus lines insurance company subsidiaries of W. R. Berkley Corporation and offered through licensed surplus lines brokers.  Not all products and services may be available in all jurisdictions, and the coverage provided by any insurer is subject to the actual terms and conditions of the policies issued.  Surplus lines insurance carriers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.


Erich Bublitz

Written by Erich Bublitz

Erich has over a decade of experience in the insurance industry with a focus on emerging risks including cyber, technology, media and cannabis. He has held positions working in the US and Europe. He is a VP of Underwriting for Admiral Insurance based in the home office of Mount Laurel, NJ. Erich holds a pilot’s license, enjoys hiking, and spending time with his two daughters.

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


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