The 10 Most Common Questions Cannabis Businesses Ask About Insurance

The cannabis industry in Minnesota and beyond is experiencing exponential growth. Whether you’re running a marijuana dispensary, growing hemp or cannabis plants, or manufacturing THC beverages and edibles, you face unique risks that most standard insurance companies don’t want anything to do with. Many cannabis entrepreneurs are quickly discovering that protecting their investment isn’t as straightforward as purchasing a typical business insurance policy or as inexpensive.

Below are some of the most common questions cannabis business owners ask about insurance—along with the answers every cannabis business owner should know.

1. What types of insurance does a cannabis business need?

Most cannabis businesses need a package of policies, not just one. The essential insurance policies usually include:

• General Liability – protects against bodily injury and property damage from third parties. i.e., customer slips, trips, or injuries.
• Product Liability – helps cover lawsuits if someone claims your product caused harm.
• Commercial Property – protects your building, business personal property, grow equipment, and inventory. Inventory is usually a separate limit.
• Crop Insurance – covers plants at different growth stages against fire, theft, or certain disasters.
• Workers’ Compensation Insurance – required if you have employees in Minnesota.
• Commercial Auto – if you have a business vehicle and deliver products or transport inventory.

Every business is different, so policies should be customized to the specific needs of your unique business, whether you’re in retail, cultivation, manufacturing, or distribution.

2. Are THC beverages and infused products covered?

This is one of the biggest surprises for new business owners. Most standard liquor liability or general liability policies do not automatically cover THC beverages or cannabis-infused edibles. In fact, it is excluded. You will need a specialized endorsement—or in many cases, an entirely separate cannabis liability policy—to be protected appropriately.

3. Can I insure my plants and inventory?

Yes, but with limits. Cannabis insurance can cover plants at various growth stages, including seed, vegetative, flowering, and harvested. Coverage usually applies to fire, theft, vandalism, or natural disasters. Some policies may even protect finished inventory while in storage or transit.

Be advised, there are exclusions in every policy. Standard exclusions in a cannabis crop insurance policy are mold, mildew, and rot. Also, pest infestations are not covered unless you add an endorsement.

4. What about theft and cash losses?

Because many cannabis businesses continue to be cash-heavy, crime insurance is absolutely essential. It can cover robbery, employee dishonesty, and even armored car transport of cash. Standard business insurance typically does not include this protection.

5. Does federal illegality affect my coverage?

This is a very common concern. While cannabis remains illegal federally, insurance carriers operating in Minnesota are regulated at the state level. If your business is licensed and compliant with Minnesota law, you can obtain valid insurance policies.

6. How much does cannabis insurance cost?

Costs vary depending on the size of your operation, sales, and coverage needs. In general, expect to pay higher premiums than non-cannabis businesses because insurers see cannabis as an elevated risk. However, working with an independent agency, like us, that shops multiple carriers can save you thousands of dollars. 952-222-8073

7. What are the most common cannabis insurance claims?

Cannabis businesses often experience claims related to:

• The theft of cash or product
• Customer injury inside cannabis dispensaries
• Property damage from fire or vandalism
• Product liability lawsuits from contaminated or mislabeled goods
• Crop loss due to fire, mold, pests, or storms

Understanding these risks will help you prioritize which insurance coverage to buy first.

8. Will insurance cover product recalls?

Some cannabis liability policies can include or offer product recall coverage, which helps cover the costs of notification, shipping, and disposal if you need to recall contaminated or mislabeled products. Since recalls can bankrupt a small business, purchasing this coverage is highly recommended.

9. Do I need insurance for each location?

If you own multiple dispensaries, grow operations, or warehouses, most carriers require you to list each location on the policy. Sometimes, you can package them together for cost savings, which also makes things easier to handle and control.

10. How do I find the right cannabis insurance?

The key is to work with an agency that understands both cannabis insurance and cannabis regulations. Quite frankly, most insurance agents don’t have a clue about cannabis insurance, and online quoting sites don’t have access to cannabis carriers. At Insuring Minnesota, we specialize in cannabis coverage and work with multiple top-rated insurance companies. Let us insure your business the right way.

Protect Your Cannabis Business Today

Running a cannabis business comes with elevated risk—but the right insurance means you don’t have to face those risks alone. From THC beverage liability to crop coverage, we help you build a policy that protects your investment.

📞 Call 952-222-8073 today for a fast, free quote and expert guidance on cannabis insurance in Minnesota. Please note that all our policies come with an experienced agent.