Do Cannabis Wholesalers Require Insurance?
Wholesalers and distributors of cannabis engage in the sale of goods or merchandise to retailers or other distributors who, in turn, sell to the public. Products are typically stored and shipped out of the warehouse or distribution center to the store.
With medical cannabis legal in 33 states and recreational cannabis also legal in 1/3 of those states, the insurance industry has stood up and taken notice. In fact, insurance agents are reporting that they are fielding more and more questions about cannabis risks. Since this industry is so new and continually growing, there really are no experts in the cannabis insurance field, yet.
How Cannabis Wholesalers and Distributors Can Benefit from Insurance
Here are some important tips to help agents when dealing with this new and fledgling market, particularly for wholesalers.
Partner with an Expert
The next best thing to becoming an expert is to have access to one. With complex regulatory and market regulations, as an insurance agent, it is wise to have access to an expert. Partner with a company, such as CannGen, that specializes in cannabis insurance coverage, apply their experience, and bring them into the relationship with current clients.
Ask, Ask, and Ask
All clients have questions. When faced with an unknown, don’t break the client’s trust with a half-hearted or completely incorrect answer. Instead, give clients the peace of mind knowing that they can trust that the answers are correct and comprehensive by receiving completely truthful answers from an expert partner. Clients would rather pay a heavier premium in such a complex and heavily regulated industry than risk not having the proper coverage.
General and Product Liability
Secure the proper coverage. Many times, those in the cannabis industry do not think about insurance and risk management. Many are focused on general liability insurance in order to comply with government regulations. However, product liability insurance is essential, too.
For example, a grower might not think of product liability when their product leaves the field free of mold or toxins. However, they can be included in a lawsuit even after it leaves their field and goes to the distributor and then the seller. Once it is purchased, if something goes wrong with the product, the entire chain can be open up to a lawsuit. Comprehensive cannabis wholesaler’s insurance coverage is key.
This type of client can also lead to a chain reaction of insurance needs. Cannabis distributor’s insurance is just as important as wholesaler’s insurance and should be offered to the distributor as well.
Build a Network
In order to grow a business, it is important to know all the players. In the cannabis industry, growers, harvesters, distributors, and retailers are just a few links in the chain. All of these chains need coverage. One way to get acquainted with all players is to join a cannabis association such as the California Cannabis Industry Association (CCIA) or the local county growers’ association. Not only will this build a client base, but it will increase your overall knowledge as well.
For clients looking for cannabis distributors and wholesalers coverage, CannGen can help. For complete coverage of your cannabis wholesaler’s or distribution facility, contact CannGen Insurance Services today at (888) 751-3141 or email us at cannapp@CannGenins.com.