Market Spotlight: Marijuana / Cannabis Industry

Cannabis, and by extension cannabis insurance, has proven pandemic-proof. When shutdowns started in 2020, numerous state legislatures declared cannabis an essential business, and sales nationwide blossomed. Thanks to these declarations, and the novelty of the emerging business, cannabis has literally flowered into a legitimate industry. Directors and officers, and some other lines, continued to be difficult for cannabis operators in terms of premiums and availability, but that pressure eased a bit recently. Several new carriers have entered the space, bringing much-needed capacity to cannabis insurance. However, these new operators, along with other latecomers to the specialty, face the grim prospect of competing with established cannabis insurance businesses in what appears to be a souring economy, a looming recession, as well as a cannabis product glut in long-legal states with developed markets. These headwinds maybe bothersome or worse for newbs, but operators that have been in the business for a longer time appear poised to hold on to their business and weather any downturns that may come to pass. "The economy looks tough, and while cannabis and insurance have often been viewed as being recession proof to some degree, we expect that operators who aren't already in this line of business to experience some tough sailing," said Charles Pyfrom, chief marketing officer at CannGen Insurance Services, a national provider of insurance coverage for the cannabis, CBD, and hemp industry. "Some of these new businesses may go by the wayside if they don't have an established client base. We will continue to focus on our core specialties, and feel confident cannabis and cannabis insurance will weather any downturn."