Insurance for Cannabis Businesses: Oklahoma Small Businesses

Oklahoma business owners and customers alike have taken to the booming cannabis industry like a duck to water. As the thirtieth state to pass medical marijauna, weed sprouted and spread through Oklahoma seemingly overnight. 

Since then, it’s been a gold rush — businesses, property, and equipment being bought up to secure an investment in an industry that made over $945 million in revenue in 2021 alone.

With little licensing restriction for businesses, easy consumer accessibility, and rather relaxed medical evaluations in Oklahoma, it’s a market that promises limitless opportunities for all participants. Well, that is if you already applied to be a licensed MMJ business before a four-year business licensure moratorium took place. 

To make sure your business doesn’t just achieve hypergrowth and then bust, you need long-term insurance coverage at an affordable price. For all your cannabis insurance needs, we recommend consulting an insurance agency that knows the intricacies of insurance in Oklahoma weed businesses. At Hopewell, we're standing by to answer all your burning Oklahoma cannabis insurance questions.

Residents, entrepreneurs, and small business owners all appreciate the economic contributions of the once-villainized marijuana plant, but most insurance carriers haven’t caught up yet.

The State of Oklahoma’s Weed Success

Let’s take a look at some vital statistics that may shed some light on the success of the cannabis crop in Oklahoma:

• A cannabis business license costs as little as $2,500 (compared to the $7,500 license application fee of Arkansas, for instance)
• It costs $100 for a medical marijuana card, not including a physician evaluation
• Legalizing marijuana for medical use generated $110 million in state and local taxes
• More than 10% of the population has a medical marijuana card
• Over 11,514 licensed cannabis businesses

Oklahoma’s market is so different from other states because it has almost no barriers to entry on a commercial level. The licensing is inexpensive compared to other states, and the tolerance of both businesses and consumers has spread cannabis use throughout the state.

Despite its obvious economic appeal, there is still the issue of federal illegality. Consequently, most insurance companies don’t know what to do with cannabis businesses and how to handle cannabis insurance. 

They can react in two different ways: treat CRB (cannabis-related businesses) exactly the same as other businesses, or avoid insuring them entirely. Neither of which is beneficial for your weed business. 

By treating them like other businesses, they place higher premiums on lower coverage because of the risk involved. Insurance costs are based on historical data and the prior claims of comparable businesses. Insurance coverage for cannabis is all new, so it’s in their best interest to be overly cautious.

This high cost of insurance, combined with the razor-thin margins in the cannabis industry right now, means getting enough coverage without breaking the bank is tough. This is why it is important to find insurance coverage that covers what you need, at the amount you need, and ensures you're not wasting a single dollar on extra coverage that won't do any good if you need to file a claim. 

This affects your access to adequate and cost-effective insurance. Not great considering your cannabis business needs insurance coverage like any other business.

Insurance for CRBs is Crucial

 Insurance covers you in unfortunate circumstances like injuries, accidents, or damage. Without it, your business is on the hook for the bill. Medical expenses, legal fees, or replacement costs could knock your business out for good. 

Let’s look at the types of insurance businesses need, weed or no weed.

• Workers’ compensation: Helps cover medical and legal expenses associated with an employee hurt on the job. Required in Oklahoma, so it’s usually reasonably priced and offered with other policies. 
  
  
• General liability: Covers personal injury, bodily injury, and property damage claims from a third party. This is helpful for any third-party medical or legal expenses, plus the cost of repairing or replacing property. 
  
  
• Property insurance: Extremely important in Oklahoma, this coverage helps recover from property damage and losses incurred from things like fire, weather, and even vandalism and theft. Our weather is particularly destructive to expensive climate control equipment. From winter freezes to tornadoes, you want to be sure you can recuperate from these losses.
   
• Product liability insurance: This insurance comes in handy if your CRB is sued because of a deficient or harmful product. Extremely helpful considering people react differently to weed in different forms. This can also cover you if your business gets involved in a suit of a third party under the influence of cannabis products traced back to your business. 
  
  
• Commercial auto insurance: Work vehicles like delivery trucks and equipment aren’t covered by personal policies and claims can be denied if your vehicle, an employee’s vehicle, or property was damaged while on the job. Commercial auto insurance covers everything from your one company car to a whole fleet of delivery trucks. 

Your business needs insurance just like any other. Your needs will vary depending on your business’s cannabis stage (e.g. cultivating, manufacturing, or selling at dispensaries). 

Even the insurance that seems unique to marijuana plants is just an extension of existing insurance solutions. For example, cannabis crop insurance is necessary to protect your investment interests from weather and devastation. 

Though it is a high priority for grows, dispensaries can use the part of crop insurance that covers finished stock like any business would cover their inventory. Dispensaries are just retail stores, but insuring them is more expensive and convoluted than any non-cannabis storefront.

Don’t Let Insurance Stop You 

Your cannabis business has amazing potential, and we know insurance issues won’t stop you. 

That being said, there are insurance companies starting to fill the need that other insurance carriers are too afraid to address. For every industry that pops up, tangential industries rise to service them, and insurance is no different. 

Whether with young cannabis-centric insurance companies or established carriers reacting with agility, insurance is not going to give up on marijuana-related businesses. 

Consider the weed landscape of Oklahoma City, which has over 500 dispensaries (that’s three times the amount of Colorado, a state that has had weed for twice as long). Insurance isn’t going to sleep on those financial gains, just like you won’t. 

To make sure you’re properly protected, be sure to consult a knowledgeable insurance agency like Hopewell that will help design insurance coverage with your needs in mind. Adapting to the cannabis industry's needs is our specialty, and we’ll make sure your coverage needs are met with cost-effective insurance solutions. Requesting your free cannabis insurance estimate is easy, fast and, most importantly, free!