Entire safes being carried out of businesses, vehicles smashing through doors, devastating fires at indoor growing facilities—and toss in the occasional, run-of-the-mill B.I. claim.

Those are some of the tales from panel of insurance professionals at Insurance Journal’s annual Insuring Cannabis Summit, who discussed the market and other pressing claims trends that the legal cannabis insurance industry faces today.

Topics included navigating the industry’s unique exposures, managing risks that come with operating cash-heavy businesses and coverage considerations for cannabis lounges.

What are Cannabis Businesses’ Biggest Insurance Exposures?

From cultivation to cash registers, the world of cannabis-related claims can present unique challenges.

When asked about the biggest exposures she sees in the industry, Beth Ossino, claims manager at Golden Bear Insurance Company, brought up theft and robbery. She recalled a couple of instances of devastating losses for insureds, including thieves carrying a safe out of a business and robbers making off with huge amounts of product.

“We’ve had entire crops where, maybe the insured harvests 600 plants, [and] the next day, there’s a box truck that rams through their roll-up door and steals all of the product,” she said. “They come in, and they’ll take whatever they can get their hands on.”

Sub-limits and specific protective safeguards on policies can make these claims tricky, Ossino said. Sometimes, policyholders are non-compliant with protective safeguard endorsements, such as wired alarm systems or sprinklers. Record-keeping holes in a dispensary’s accounting can also become sticking points in business interruption claims.

Michael Kirk, an underwriter at Cannasure Insurance Services, added his perspective on risk and loss from an underwriting standpoint: LED lights are favorable to non-LED lights in cultivation facilities. Old-school growers may prefer the older lights, but bulb fires rank among the top of Cannasure’s concerns.

“I really haven’t seen any LED fire claims,” Kirk said. “I’m sure there are claims out there as well, but they’re at such a lower temperature that it makes it a lot less risky when they’re using all LED. So, from our standpoint at Cannasure, if we’re insuring a cultivator, they have to either be 100% LED or fully sprinklered.”

While a mix of lighting types exists today, all cultivators will use LED lights soon, Kirk believes.

Michael DeNault, cannabis practice leader at World Insurance Associates, also believes LEDs are becoming more prominent. However, while the temperature of these lights is not a great concern, it’s the temperature of their power sources that can cause issues.

“They do get quite hot,” DeNault said. “If you go into a room that’s been … in the vegetative state, and those lights have been on for 10-12 hours, those drivers are really hot. The lights themselves are not, but the drivers are.”

Over the past year or so, he and his team has seen lighting companies offer driverless systems and remote driver systems that situate the LED light power drivers outside of grow rooms—completely removing the risk of the lights’ heat profiles and placing less strain on ventilation systems.

Kirk also touched on individually ventilated grow rooms, which can minimize plant losses due to fires. Smoke that damages crops between rooms can lead to a huge claim, he said.

“When we’re talking about large cultivation risks, that’s another one of the questions we always ask,” Kirk said. “Are these rooms individually ventilated, along with the fact that we’re always going to prefer LED.”

Legislation That Could Ease Cash-Only Industry Challenges

Legal cannabis businesses can make big targets for criminals because of the large amounts of cash they hold as cash-heavy operations.

Since banking is highly regulated by the federal government, many banks don’t provide any services to the cannabis industry. Ossino discussed a large insured in Oakland, California, that would rent an armored truck quarterly to take their tax payments across the Bay Bridge to the San Francisco Mint.

Changes to this aspect of the cannabis businesses could come soon. In late July, a bipartisan coalition of 32 attorneys general called on Congress to pass the SAFER Banking Act of 2025, designed to shield banks, credit unions, insurers and other financial service providers from liability for providing traditional business services to state-sanctioned cannabis companies.

President Trump indicated in a social media post last year that as president, he would “continue to focus on research to unlock the medical uses of marijuana to a Schedule III drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies,” among other things.

“Hopefully, if they can get that SAFER Banking Act passed, that might be just a steppingstone for further legalization,” Ossino said. “To get cannabis taken off Schedule I and moved to, maybe, Schedule III. That would really be a big help for the industry.”

DeNault said his clients have experienced minimal claims involving crime and theft. He and Kirk did note, however, that they are prevalent in the cannabis business. Kirk said some methods to slow or deter crime include investing in vault quality and placing bollards outside entrances. The latter also prevents property damage.

DeNault touched on the importance of risk management, including armored car and security services and installing different locks and keypads on access points to secure storage of cash and products. His team at World Insurance Associates have a designated risk management division that identifies where businesses can improve their risks and helps them do so.

“That way, not only can we take them on as a client, but we can also get them some better rating and some more coverage with our preferred partners,” DeNault said.

Cannabis Lounges

Cannabis lounges that serve food add another dimension to property underwriting, Kirk explained, because they present restaurant-type exposures. Do they host live music events? What level of security is on hand? Cannasure has a questionnaire it runs through with potential brokers and insureds.

“From a carrier standpoint, we ask more questions,” he said. “What are the hours of the operation? What kind of safeguards do you have in place? For somebody who looks intoxicated, does the budtender or whoever’s serving them, are they trained … to recognize somebody like that?”

DeNault explained that World Insurance Associates hasn’t seen many lounges pop up in its purview. They could be coming, though, as New Jersey recently released four consumption lounge licenses, and Massachusetts could release similar licenses soon. According to numbers from the Marijuana Policy Project, onsite cannabis lounges have been legalized in 12 states.

The full panel also included discussions of distinctive regional challenges that legal cannabis businesses face across the U.S., as well as the growing interest in THC and hemp-derived beverages. Visit insuringcannabissummit.com to watch recordings of all five panels.