by KRM Research Staff
Regardless of where growers stand on the reality of climate change, the devastation our unpredictable climate has wreaked over the past months has been catastrophic. The massive losses experienced by farmers of conventional seed crops has been equally matched by cannabis growers, most prominently in the states of Colorado, Florida, Arkansas, Iowa, Oregon, Washington and California.
Last winter’s sudden hailstorm and freeze in Colorado caused millions of dollars in damage. The state’s largest marijuana grower, Los Sueños Farms in Pueblo, lost half of their crop which had not yet been harvested. And the bad news may continue; just this month much of Colorado was blanketed by an early snow reaching 15 inches in some areas — snapping uncovered plants and felling trees. The effects on yields from this one-day 70-degree temperature dip are yet to be seen.
The raging wildfires in Oregon, California, Arizona and Washington may be hurting cannabis growers more so than other businesses due to the prevalence of uninsured crops. The intense heat and smoke are damaging plants that are out of the direct line of fire, leaving growers in an unenviable position of trying to harvest what’s left without putting themselves in danger. The longer the fires continue, the greater the blow to crop taste, potency and yields.
At the time of this writing, one in every five licensed cannabis businesses in Oregon is now in evacuation mode. While the state is allowing growers to transfer product off premise, it must be to another licensed producer and not to an unlicensed storage facility.
Hurricane season is affecting growers in Florida, while the recent Hurricane Laura caused severe crop losses in Louisiana and Arkansas. In addition, the recent derecho in Iowa destroyed millions of acres throughout the state.
So what can be done going forward when traditional crop insurance is unavailable for outdoor cannabis cultivators? Some growers are turning to parametric insurance, a way to obtain a measure of protection against unexpected weather disasters. While this is not necessarily a complete solution, it can lessen risk by paying out a specified policy limit should certain weather parameters be met.
Cannabis growers can tailor a policy for such parameters as inches of rainfall over a certain period. Wind over a certain speed. Hailstorms measured by intensity. Or early freezing as measured by recorded temperatures. Claims are based on official recorded weather data, so there is no ambiguity over whether or not a claim will be paid.
There is no telling whether or not 2020 will turn out to be an anomaly or a harbinger of things to come. But it is clear that growers need to be increasingly concerned over the unpredictability of climate events.