The Importance of Product Liability Insurance for CBD Companies
New Opportunities for CBD
It seems it was only yesterday that cannabis or any derivative product was a total non-starter for any kind of legitimate business. Things have changed. Not only have several states legalized cannabis in all forms, including recreational marijuana, the federal government has permitted certain cannabinoid extracts such as CBD to be produced and sold. This has resulted in a CBD boom across the country.
As more and more people have realized that this product is now legal and heard positive testimonies from friends, legal dispensaries have become as common as frozen yogurt stands. Although billions of dollars are being attracted to this industry, it remains very unstable for its entrepreneurs. There are plenty of opportunities to make money – but without the appropriate coverage, it becomes just as likely a business owner might lose money.
Unique Challenges for the CBD Industry
CBD faces challenges as an industry for a number of reasons. The most important one is the stigma that still sticks to hemp and other cannabis products. The United States federal government still has a total ban on marijuana, despite what several states have permitted. Because of this, the future of CBD remains uncertain for investors.
All CBD products are required to have less than 0.3% THC, the psychoactive ingredient in marijuana, and the challenge seems greater than the payoff to many. Even aside from the cultural issues, because CBD is being marketed and sold as a medical product, it has all the same difficulties that come with operating in that field.
Several unscrupulous proprietors have tried to pass their products off as cure-alls for everything from Alzheimer’s disease to COVID-19. Because of this, there is extra scrutiny on the CBD industry. With the California wildfires and floods and hailstorms everywhere else, cannabis entrepreneurs cannot afford to be exposed in such a climate.
CBD Product Liability Insurance
CBD companies must view product liability insurance as essential for their business. It still remains rare for such companies to take out a policy, as is common for new, booming industries, but it increases the risk associated with CBD.
Product liability insurance would cover the company in the event the product caused harm to a user. This could range from adverse allergic reactions to claims the oil caused intoxication when it was not supposed to. Not only would product liability insurance cover the costs of such a complaint, but it would require the company to put in place safeguards that would prevent such a complaint in the first place. A CBD business that had the appropriate product liability insurance in place would be ahead of the curve in the industry, sending a message of safety and responsibility to investors and buyers in a market with a reputation for irresponsibility.
For more information about our comprehensive insurance solutions for the cannabis, CBD, and hemp industries, please visit our website at www.canngenins.com or email firstname.lastname@example.org.