Cannabis and Crop Insurance

The actual coverage of your cannabis can be covered.  For example if you operate a store with Cannabis cultivation$50,000 of saleable flower and edibles, you may purchase insurance to cover it for theft or fire.

A important distinction is the coverage of saleable cannabis and crop are two different coverages.  They are not covered the same policy.

Saleable cannabis is covered under stock

Historically, most insurance companies have focused on providing coverage for the actual cannabis through a business personal property policy.  The definition of cannabis was considered stock.  However, many cannabis insurance carriers use the definition below:

3. “Stock” means merchandise held in storage or for sale that is either
a. “Finished stock”, or
b. Merchandise that does not contain marijuana and/or its derivatives.
4. “Finished stock” means finished marijuana stock and products containing marijuana and/or its derivatives. “Finished stock” does not include “harvested plant material” that is being dried or product that has not yet been incorporated into a final product ready for sale.

Living plants are covered on a separate crop insurance policy

Crop insurance is offered by a limited number of insurance carriers to cover the “Seeds”, “Seedlings”, “Vegetative Plants”, “Flowering Plants”, or “Harvested Plant Material”.  

Sample definitions below of the meaning of

“Living Plant Material” means marijuana seeds, immature marijuana seedlings, marijuana plants in the the vegetative growth stage and mature flowering marijuana plants rooted in growing medium.

“Harvested Cannabis Material” means mature marijuana plant material no longer in the growing medium, which is in the process of being dried or which includes any raw materials or product that is not yet “Finished Stock”.

Types of claims are covered on a crop insurance policy

The most common question is if insects or mold are covered on a crop insurance policy.  Unfortunately, no.  Below is an example of types of losses offered on a crop insurance policy:

3. Covered Causes Of Loss
a. Fire
b. Lightning
c. Explosion, including the explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages through which the gases of combustion pass. This cause of loss does not include loss or damage by:
(1) Rupture, bursting or operation of pressure-relief devices; or
(2) Rupture or bursting due to expansion or swelling of the contents of any building or structure, caused by or resulting from water.
d. Windstorm or Hail, but not including:
(1) Frost or freezing or extremes of temperature;
(2) Ice (other than hail), snow or sleet, whether driven by wind or not; or
(3) Loss or damage to “Living plant material”, or “Harvested cannabis material”, caused by rain, snow, sand or dust, whether driven by wind or not, unless the building or structure first sustains wind or hail damage to its roof or walls through which the rain, snow, sand or dust enters.
e. Smoke causing sudden and accidental loss or damage. This cause of loss does not include smoke from agricultural smudging or industrial operations.
f. Aircraft or Vehicles, meaning only physical contact of an aircraft, a spacecraft, a self-propelled missile, a vehicle or an object thrown up by a vehicle with the described property or with the building or structure containing the described property. This cause of loss includes loss or damage by objects falling from aircraft.
We will not pay for loss or damage caused by or resulting from vehicles you own or which are operated in the course of your business.
g. Riot or Civil Commotion, including:
(1) Acts of striking employees while occupying the described premises; and
(2) Looting occurring at the time and place of a riot or civil commotion.
h. Vandalism, meaning wilful and malicious damage to, or destruction of, covered property.
i. Sprinkler Leakage, meaning leakage or discharge of any substance from an Automatic Sprinkler System, including collapse of a tank that is part of the system.