2020 Underscores Cannabis’s Need for Reliable, Industry-Specific Insurance

XInsurance cannabis insurance mg Magazine Shutterstock myartoym
Image: myartoym / Shutterstock.com

This past fall, the cannabis and hemp industries watched while thousands of people’s livelihoods went up in smoke due to the wildfires that swept across millions of acres of California, Oregon, and Washington, affecting the entire seed-to-sale supply chain. For too many, the financial losses were unrecoverable because many cannabis businesses were without adequate insurance—through no fault of their own.

Significant losses for an already underserved industry

In California, early estimates predicted upwards of $1.2 billion in crop losses in the state’s $21 billion cannabis industry, with 3.7 million acres of cropland being completely demolished. October’s aftermath saw a total of 5 million acres of crop loss across California, Washington, and Oregon, with the remaining crops in the states falling behind in their harvest due to the fires’ environmental effects, thus affecting the supply chain to consumers.


Some store owners not only lost their four walls, but also saw their assets entirely liquify, and not in the way they had hoped to witness. Cannabis flower and product inventories were reduced to ash in their melted plastic packaging. What were once artful display cases became unrecognizable liquified remnants of glass smoking accessories. Even safes to store money couldn’t withstand the heat and dissolved along with the cash assets inside.

It’s safe to say that of all years, 2020 has proven the susceptibility of the cannabis industry to unique external and inherent threats and risks.

If this had been any other industry, business owners would have been able to claim their losses from the fires through their insurance, but this isn’t the experience for thousands of businesses within the cannabis industry. It’s no secret that for most major insurance companies, the cannabis industry is a no-go zone due to its federally illegal status, and the perceived inherent risks of possible theft, criminal activity, and obstacles in transport make insurance companies run the other way.

Where there’s smoke, there’s fire

As we have witnessed, the unique threats to cannabis businesses are heightened in times of civil unrest.

Earlier this year, more than forty cannabis businesses across the United States reported significant losses due to vandalism, rioting, and looting. One California cannabis business reported a loss of $2 million in product from theft. In the Midwest, a Chicago shop had to close for several weeks just to restore the damages from vandalism, costing hundreds of thousands of dollars in lost revenue.

When many of these businesses sought insurance payouts, they received significant pushback, as their activities were “technically federally illegal,” demonstrating a need for cannabis businesses to have reliable insurance solutions for property losses and other business casualties.

XINSURANCE cannabis insurance mg Magazine Shutterstock valeriy eydlin
Image: valeriy eydlin / Shutterstock.com

Working in cannabis should no longer bring risk without protection

“The hardworking people of the cannabis and hemp industries deserve true peace of mind when taking on the inherent risks of these unique companies,” said Rick Lindsey, chief executive officer at XINSURANCE, a firm providing insurance services specific to the cannabis industry. “With the industry being so diverse in the operations that make up the seed-to-sale process, cannabis companies need customized insurance solutions with solid risk management to cover the risks within their business.

“Furthermore, cannabis businesses need an insurance provider that they can trust will work with them when significant property and casualties have occurred,” he continued. “No cannabis business should suffer devastating financial losses or pushback from their provider, especially when the causes are completely out of their control.”

XINSURANCE provides customized insurance solutions for cannabis and hemp producers, growers, distributors, transporters, testing labs, and retailers, ensuring the entire cannabis industry is protected from seed to sale. XINSURANCE knows the insurance industry, bringing more than thirty years of experience along with a passion for helping the growing cannabis and hemp industries nationwide.

Risk management for unique and diverse operations

“We ensure new and established cannabis business owners are provided a variety of options that meet their specific operations,” said Lindsey. “By taking a client-based approach, we look at business needs and develop a wraparound program providing full insurance coverage.”

In addition to these features, XINSURANCE members are provided 24/7 support, with in-house services for flexible underwriting, policy services, risk-management services, and claims management.

The cannabis industry has been around for many years, but 2020 will forever be one year painfully remembered by too many industry members. While parts of the nation recover from natural and human-made destruction, let 2020 be a reinforcement of the need for the growing cannabis industry to have solid insurance and risk-management solutions.

For more information about XINSURANCE, powered by Evolution Insurance Brokers LC, call 1.877.585.2853, email [email protected], or visit XINSURANCE.com.

XINSURANCE logo mg Magazine XINSURANCE is powered by Evolution Insurance Brokers LC (“EIB”), an excess and surplus lines insurance brokerage. XINSURANCE is a DBA of EIB, which is domiciled in and has its principal place of business in Sandy, Utah. This insurance product is offered by an unlicensed surplus lines insurer. The NPN for EIB is 5464658 and CA license number is 0H93938.