HUB: Balancing Big Risks and Big Rewards A maturing cannabis industry has the potential for enormous growth — but only if growers, processors and retailers can minimize threats to their profitability and stability

Balancing Big Risks and Big Rewards A maturing cannabis industry has the potential for enormous growth — but only if growers, processors and retailers can minimize threats to their profitability and stability

 

Author

Wayne Margulies

 

Wayne Margulies

Cannabis & Hemp Insurance Specialty Team

HUB International Limited 5 ​Bryant ​Park New York,​NY​10018

Office: 212-​338-2203

Mobile: 646-​515-2303

Email: wayne.margulies@hubinternational.com

hubinternational.com

The U.S. cannabis industry hit a record $24 billion in sales in 2021, with expected annual sales of $70 billion by 2028.1 Cannabis risks have always outpaced the availability of insurance, in large part because of its status as a federally outlawed substance and the dangers in extraction and production. But it now shares many of the same risks as other industries — catastrophic crop damage, cyber risk and a shortage of skilled workers. Some relief for the industry’s financial issues may be ahead: The SAFE and CLAIM Acts, if passed, carry with them the potential to bring traditional financial resources to cannabis operations. Insurance for cannabis businesses remains expensive. Cyber coverage is expected to rise 30% or more, as cyber risks explode and more businesses seek coverage. Executive liability policies including Employment Practices Liability (EPL) and Directors & Officers (D&O) premiums are expected to increase 10% to 20%. Cannabis Property-Casualty coverage is also expected to rise 10% to 20%, except for businesses in catastrophe-prone areas, which will see increases of 20% and up. These factors of additional risks and higher insurance premiums won’t inhibit industry growth, but those cannabis businesses that invest in risk management will be the ones to benefit the most.

Cannabis – US 2022 Outlook – Balancing Big Risks and Big Rewards

Top 200 Cannabis Lawyers

Cannabis Law Journal – Contributing Authors

Editor – Sean Hocking

Author Bios

Canada
Matt Maurer – Minden Gross
Jeff Hergot – Wildboer Dellelce LLP

Costa Rica
Tim Morales – The Cannabis Industry Association Costa Rica

Nicaragua
Elvin Rodríguez Fabilena

USA

General
Julie Godard
Carl L Rowley -Thompson Coburn LLP

Arizona
Jerry Chesler – Chesler Consulting

California
Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Colorado
Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Florida
Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

Illinois
William Bogot – Fox Rothschild

Massachusetts
Valerio Romano, Attorney – VGR Law Firm, PC

Nevada
Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Oregon
Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Pennsylvania
Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

Washington DC
Teddy Eynon – Partner Fox Rothschild