If you are a marijuana cultivator in California, you might be reluctant to buy insurance on your business. But our experienced cannabis business attorneys know there are many good reasons to invest in insurance.
A recent article from Santa Barbara Independent reveals a big payout one cannabis farmer in Carpinteria received due to losses caused by the Thomas Fire in December, the largest wildfire in the state in recent history. The farm got more than $1 million dollars from their insurance company after thousands of marijuana plants on property were destroyed. This equated to about market value for the plants. While the farm’s crops did not burn in the fire, white ash blew into the greenhouses and tainted the plants. The plants tested positive for lead, arsenic, asbestos, and magnesium. This type of damage was covered under the policy’s clause covering changes in atmospheric conditions.
Meanwhile, most of the other cannabis farms in Northern California were not so fortunate. Many opted out of insurance policies to keep costs low. This money-saving tactic is typical among farmers of all kinds, who often skip this expense to keep profit margins higher. But this is a big gamble, particularly in an area so prone to fires. Continue reading