One yardstick that shows how the legal cannabis business is becoming mainstream is the size of recent insurance payouts. They’ve already crossed the million-dollar mark for certain businesses, and are certain to grow.

Which means that many of the big insurers who haven’t yet been considering cannabis businesses may be taking a second look. With larger payouts come higher premiums and greater profits for those majors willing to broaden their industry coverage.

A 2018 incident that set the bar was the massive Thomas Fire that affected California cannabis growers in Ventura and Santa Barbara counties. As reported by the Santa Barbara Independent, one cultivator in Carpinteria received a payment well over $1 million for crop damage; the affected cannabis tested positive for asbestos, magnesium, lead and arsenic

The total insurance payments from this one insurer to all growers in the region were estimated to reach $8 million. The premium charge the grower had paid at the time was $30,000 annually with a $25,000 deductible.

Not as large of a price tag, but far more numerous, are insurance payments for theft. The December 2019 issue of Insurance Business Magazine reports that “approximately 90% of insurance claims in the US cannabis industry so far have involved an element of theft.” It is not unusual for growers and retailers alike to file claims nearing $1 million (a usual policy limit), and incidents can occur from inside jobs, late-night break-ins, and daylight armed robberies.

Cyber Crimes and Data Breaches

Data breaches and other cybercrimes increasingly target cannabis providers. Last year, the  cannabis industry accounted for less than 10% of all cybercrime, but the threat is expected to rise with many companies not protected by the traditional banking system.

Lastly, the big names in cannabis have also been in the news. MedMen was the recent target of a highly-publicized $19.8 million class-action lawsuit that would have served as an industry watershed. The lawsuit, however, was dismissed in court last year.